Effective use of preferential credit capital in local socio-economic development

Hong Linh town is located in the North of Ha Tinh province, with 6 administrative units, including: Bac Hong ward, Nam Hong ward, Dau Lieu ward, Duc Thuan ward, Trung Luong ward and Thuan Loc commune, with a total area of ​​5,897.3 hectares, an average population in 2023 of 40,412 people; the average population density is 685 people/km2.

Nearly 10 years of implementing Directive No. 40-CT/TW, dated November 22, 2014 of the 11th Party Central Committee Secretariat on strengthening the Party's leadership over social policy credit (referred to as Directive No. 40) and Conclusion No. 06-KL/TW, dated June 10, 2021 of the Secretariat on continuing to implement Directive No. 40 (referred to as Conclusion No. 06), the Transaction Office of the Bank for Social Policies (VBSP) in Hong Linh town has actively and effectively deployed social policy credit activities in the area.

“Leverage” of capital

Identifying preferential credit policy capital as a "lever" to support the poor, enterprises, production and business cooperatives, the Transaction Office of the Bank for Social Policies of Hong Linh town has closely followed the directives and instructions of the Central Government and the province. The Office has deployed policies on hunger eradication and poverty reduction programs throughout the town to the wards and communes and annually organized many dissemination, propaganda and training sessions for the Management Board of Savings and Loan Groups (TK&VV), entrusted organizations, unions, village heads, heads of residential groups, officers of the Poverty Reduction Boards of wards and communes... to quickly provide policy capital for lending to poor households and other policy beneficiaries.

By September 30, 2024, the town's budget capital transferred to the VBSP for lending to poor households and other policy beneficiaries was VND 5,757 billion, accounting for 2.7% of the total capital, an increase of VND 5,457 million (+18.2 times) compared to before implementing the Directive; The Department of Labor, War Invalids and Social Affairs regularly guides the process of reviewing poor and near-poor households and identifying agricultural, forestry and fishery households with average living standards in a timely and correct manner, creating conditions for eligible households to access loans at the VBSP to invest in production, livestock and business, gradually improving their lives and sustainably eliminating poverty.

As of September 30, 2024, the total source of policy credit capital reached VND 215,635 million, an increase of VND 126,398 million (+142%) compared to before the Directive; the total outstanding balance of policy credit programs reached VND 211,017 million, an increase of VND 125,213 million (+146%) compared to December 31, 2014, with 14 credit programs that have been and are being implemented; disbursement reached VND 461,221 million for 9,427 poor households and other policy beneficiaries in the area to borrow capital. Credit quality has been continuously consolidated and improved. As of September 30, 2024, the total bad debt was VND 124 million, accounting for 0.058% of the total outstanding debt, a decrease of VND 89 million compared to before the Directive.

The town's social policy credit activities over the past 10 years have helped 457 households overcome the poverty line; attracted and created new jobs for 3,733 workers, including 7 workers working abroad; 457 households borrowed new loans to cover their study expenses; 1,394 clean water and environmental sanitation works in rural areas were built, contributing to improving the quality of life as well as living conditions of the community in rural areas; 2 new houses for poor households without houses or temporary houses were built; 105 newly built houses for living and 4 newly purchased houses were borrowed under Decree 100/2015/ND-CP and Decree 100/2024/ND-CP; 3 non-public preschools and 237 students supported to buy computers and equipment for online learning have access to the support package according to Resolution 11/NQ-CP, dated January 30, 2022 of the Government on the socio-economic recovery and development program; 1,825 poor households, near-poor households, and newly escaped poverty households have been able to borrow capital to invest in purchasing machinery and equipment and buying breeding animals, 2,404 households have been able to borrow capital to develop production, business, transportation, services, livestock farming, etc.

Preferential credit capital from the Vietnam Bank for Social Policies not only contributes to the goal of sustainable poverty reduction, implementing social security policies, narrowing the gap between rich and poor, but also contributes to restoring, preserving and developing traditional occupations, typically the blacksmith village in Trung Luong ward, building new rural areas in Thuan Loc commune, and building civilized urban areas in the area. The poverty rate has gradually decreased over the years from 3.83% in 2014 to 2% in 2024.

Hong Linh Town Social Policy Bank gives gifts to poor and disadvantaged households with loans in Dau Lieu ward, October 4, 2024

Models of effective use of credit capital in production, business and study

The town's Social Policy Bank and socio-political organizations have accompanied and responsibly brought preferential capital to poor households, near-poor households, newly escaped poverty households and other policy beneficiaries in the town, helping hundreds of disadvantaged households to have the conditions to escape poverty, improve and enhance the quality of life... In recent times, the Savings and Credit Groups in the town have promoted the role of "bridge" to bring policy credit capital to the poor and other beneficiaries at the grassroots level. Thereby, helping people have the conditions to invest in production development, increase income, gradually escape poverty sustainably, in which Dau Lieu ward is one of the localities with many models of effective use of credit capital.

That is the household of Ms. Do Thi Chien, residing in residential group 7, Dau Lieu ward. Ms. Chien and her husband are both freelancers with unstable incomes, and raising 3 children of school age, so the family's situation is difficult. In March 2021, with the attention and consideration of the Savings and Credit Group, Ms. Chien's family was able to borrow capital from the job creation, job maintenance and expansion support program with an amount of 48 million VND to renovate the electronics kiosk. In the same year, her family boldly continued to borrow 80 million VND from the Vietnam Bank for Social Policies under the production, livestock and business development program... using the local budget to raise breeding cows.

After 3 years of investing in livestock farming and trading, Ms. Chien's family has achieved positive results. Currently, 03 kiosks selling household electrical appliances have been put into regular operation, with stable income and jobs for family members. The economy has improved, and her children have been fully invested in their education. Every time she meets the Ward Savings and Credit Group to pay loan interest, Ms. Chien often expresses her gratitude to the Party, the State, and the Town and Ward Social Policy Bank for creating conditions for her family to borrow capital to invest in production, so that her family can have a prosperous, prosperous and sustainable life like today.

Also in residential group 7, Dau Lieu ward, Ms. Nguyen Thi Lan's family has had access to social policy credit sources. Ms. Lan was considered by the Savings and Credit Group to borrow 97.5 million VND to cover the tuition fees for her son Thai Quoc Sy to study at Dong A University. In June 2024, Sy graduated and is currently working at the Hong Linh town police department. It can be said that this policy has helped Ms. Lan's family as well as many other families in similar circumstances to solve difficulties, helping children to study properly, have stable jobs, a better future and the family gradually overcome difficulties in life.

Or the household of Mrs. Bui Thi Thao, residing in residential group 3, Dau Lieu ward, is also one of the models that have risen out of poverty thanks to the use of social policy credit capital. Mr. Biem - Mrs. Thao's husband, is old and often sick, so life is very difficult. From 2022, the family has access to loans to solve employment with a loan of 50 million VND. Mrs. Thao boldly learned and invested in raising cows. She used the loan capital to buy 7 cows. After more than 2 years, the herd has 15 cows, Mrs. Thao's cow raising model has brought economic efficiency, contributing to increasing income and stabilizing life.

It can be affirmed that the preferential credit policy capital is deployed to the right subjects and used for the right purposes, and has been effective, becoming a "savior" for many poor and near-poor households in economic development, job creation, and life stabilization. Thanks to that, the poverty rate of Dau Lieu ward in particular and Hong Linh town in general has decreased year by year, and people's lives have been increasingly improved. Along with other policies of the Party and the State, the preferential credit policy of the Hong Linh town Social Policy Bank has been making an important contribution to the national target program on new rural construction, promoting sustainable socio-economic development.

Source: https://thoibaonganhang.vn/su-dung-hieu-qua-von-tin-dung-uu-dai-trong-phat-trien-kinh-te-xa-hoi-dia-phuong-159034.html