Creating sustainable livelihoods for newly escaped poverty households in Nghe An

Leverage to help prevent "re-poverty"

In Moi Lap hamlet, Nghia Yen commune (Nghia Dan), there is a family of Mr. Nguyen Van Nhat, who used to be a poor household; in 2014, his family received a loan of 30 million VND from the Nghia Dan District Social Policy Bank to invest in raising cows. Thanks to his diligence and willingness to learn from experience, his family raised cattle effectively and in 2016, Mr. Nhat's family escaped poverty. When he received a loan for newly escaped poverty households, he continued to invest in raising cattle, developing the household economy, and building houses; currently, he has an outstanding debt of over 50 million VND.
Mr. Le Ngoc Quy - Head of the Loan Group, Veterans Association here said that the group currently has 59 members, with outstanding debt of over 2 billion VND. In general, the members all use the capital for the right purpose and effectively. In Moi Lap hamlet, Nghia Yen commune, in addition to Mr. Nhat's household, there is also Ms. Nguyen Thi Trinh's household who borrowed 50 million VND from the loan capital for newly escaped poverty households to plant 3.5 hectares of acacia. Currently, Ms. Trinh has paid off the loan and received another loan of 50 million VND from the district's Social Policy Bank to plant more than 1 hectare of acacia. Thanks to the bank loan, her family's economy is increasingly stable, she has the conditions to raise her children to study, build a spacious house...

Staff of the Social Policy Bank and the loan group visited the loan model of Ms. Nguyen Thi Trinh's household in Moi Lap hamlet, Nghia Yen commune, Nghia Dan. Photo by Thu Huyen

Or in Tien Long hamlet, Quang Thanh commune (Yen Thanh), the family of Mr. Dang Xuan Tinh and Ms. Bien Thi Hoa borrowed 50 million VND to escape poverty in 2019. Currently, their family has 1 buffalo, 1 calf, 2 fish ponds, 1 scrap collection kiosk, 2 sawmills. From the loan from the Social Policy Bank, the couple has become a good business household in the commune.

Therefore, the couple decided to borrow an additional 20 million VND to buy breeding buffaloes, and another 8 million VND from the Social Policy Bank to expand the barn and invest in a domestic water system. Thanks to effective livestock farming, in 2013, Ms. Dao's family escaped poverty and completed paying off the debt to the Social Policy Bank. Granted an additional 14 hectares of forest land by the State for 50 years of cultivation, in May 2015, Ms. Dao's family continued to borrow 30 million VND to plant acacia and grass to raise buffaloes and cows.

Thanks to a loan from the Bank for Social Policies, Ms. Ha Thi Dao invested in livestock farming, production and escaped poverty. Photo: Thu Huyen

Thanks to the loan from the Social Policy Bank and the support and guidance on applying techniques in livestock farming from the local government and the association, through 3 loan periods, Ms. Dao's family has stabilized their lives, had additional income from livestock farming and production and business; up to now, they have escaped poverty and become a well-off household in the whole commune, and have been voted as one of the typical production and business households in the whole district.

Ms. Ha shared: To be able to achieve what I have today, the Social Policy Bank of Quy Chau district, the staff of the Farmers' Association of Chau Hoi commune and the Savings and Loan Group of the village have helped me a lot... In the coming time, I will continue to use the capital effectively, comply with the repayment of principal and interest in full and on schedule, and at the same time be responsible for sharing experiences, helping and mobilizing villagers, members of the savings and loan group to use capital for the right purpose, comply with the operating regulations of the savings and loan group, and strive to become rich legitimately.

Promoting lending to newly escaped poverty households

Decision 28 has expanded the subjects eligible for preferential credit loans, which are households that have recently escaped poverty. These are families that used to be poor or near-poor households, through annual investigation and review, have an average income per capita higher than the near-poor standard according to current law, are confirmed by the People's Committee at the commune level, and the maximum time since being removed from the list of poor or near-poor households is 3 years. The loan amount is agreed upon by the Bank for Social Policies and the households that have recently escaped poverty, but does not exceed the same type of loan for production and business for poor households as prescribed in each period. The loan interest rate applied to households that have recently escaped poverty is 125% of the loan interest rate for poor households as prescribed in each period.
The loan term is agreed upon by the Bank for Social Policies and the newly escaped poor households based on the production and business cycle, the Bank's capital capacity and the customer's ability to repay the debt, but not exceeding 5 years. The debt extension and transfer of overdue debt for the debts of newly escaped poor households are implemented as for poor households according to the provisions of Decree No. 78/2002/ND-CP dated October 4, 2002 of the Government on credit for the poor and other policy beneficiaries.

Mr. Luong Van Phuong's household in Muong village, Ngoc Lam commune (Thanh Chuong) borrowed capital from the Social Policy Bank to grow more than 1 hectare of tea for high income. Photo: Thu Huyen

In Nghe An, as of March 31, 2020, the Provincial Bank for Social Policies Branch directed district-level transaction offices to actively disburse credit programs, raising the total outstanding debt to VND 8,530 billion, an increase of VND 95 billion compared to the beginning of the month, VND 168 billion compared to the beginning of the year, reaching 99.3% of the plan; in which, disbursement of loans for the program for newly escaped poverty households under Decision No. 28/2015 increased by VND 34 billion compared to the beginning of the month, VND 51 billion compared to the beginning of the year, outstanding debt reached VND 1,434 billion, reaching 101% of the plan, including 33,000 customers with outstanding debt, an average of VND 43.4 million per customer.

Some district-level transaction offices of the Bank for Social Policies had high disbursement turnover in the first quarter of 2020 for the program of newly escaped poverty households such as: Dien Chau 22 billion VND; Do Luong 19 billion VND; Yen Thanh 16 billion VND; Nghi Loc 13.3 billion VND.

Mr. Phan Huu Trang - Director of the Transaction Office of the Bank for Social Policies in Yen Thanh District said: The lending program for newly escaped poor households in the area is showing good results, with no overdue debts and outstanding interest, and the capital is showing high efficiency. The loan turnover from the beginning of the year to date has reached 16 billion VND, with 330 customers receiving loans. The debt collection turnover has reached 10 billion VND, the total outstanding debt of the lending program for newly escaped poor households is more than 111 billion VND. Some communes have large outstanding debts and good quality such as: Quang Thanh 5.6 billion VND, Phuc Thanh 5.2 billion VND, Khanh Thanh 4 billion VND, Ma Thanh 4.4 billion VND...

The credit program for newly escaped poor households aims to help newly escaped poor households have capital to continue investing in production and business, ensuring sustainable poverty reduction and preventing re-poverty. Immediately after its promulgation (in 2015), the program has been put into practice, receiving support from authorities at all levels and the people. It is expected that from now until the end of 2020, the provincial branch of the Bank for Social Policies will continue to increase outstanding loans by at least 5%, nearly 72 billion VND for the newly escaped poor households program.

Mr. Tran Khac Hung - Director of the Bank for Social Policies, Nghe An branch

Nghe An Social Policy Bank: Positive signals from raising loan limit

(Baonghean) - After 1 year of implementing the program to increase loan levels and loan terms, policy capital in Nghe An has been effective, many poor households and policy households have more conditions to develop the economy and stabilize their lives.