Policy credit requires local entrusted capital source to balance

Beside the preferential loan capital source from the Vietnam Bank for Social Policies (VBSP), the entrusted capital source from the local budget plays an important role in sustainable development of policy credit. However, in recent years, the capital source from the provincial budget entrusted through VBSP has not met the demand sufficiently.

Policy credit disbursement carried out for beneficiaries in Lai Hung commune, Bau Bang district.

Supportive force of economic development

One of the four important contents in Directive No. 40-CT/TW dated November 22, 2014 of the Central Committee of the Party on enhancing the Party's leadership over social policy credit is to concentrate resources and improve mechanisms and policies to effectively implement social policy credit. Specifically, it is necessary to prioritize balancing state budget capital to implement programs, projects, ensure stable and sustainable operations of the Social Policy Bank. The People's Councils and People's Committees at all levels continue to allocate a portion of funds from the local budget to supplement funding for social policy beneficiaries in the area.

In accordance, over the past nearly 10 years, Binh Duong has concentrated resources to effectively implement social policy credit in the area. Every year, the Provincial People's Committee, districts, towns, and cities all allocate a portion of the budget to transfer to the Social Policy Bank for lending, meeting the needs of beneficiaries in the area, especially those with specific needs related to local economic and social development programs, plans, and objectives.

In districts such as Dau Tieng, Phu Giao, Bac Tan Uyen..., capital entrusted from the provincial and district budgets is mainly invested in developing local key products, such as oranges, bananas, pomelos, livestock. This capital contributes to helping people have additional financial resources, investing in developing the cultivation area, improving product quality as well as boldly transforming crops, livestock to bring high economic efficiency.

Mrs. Huynh Kim Loan, hamlet 4, Tru Van Tho commune, Bau Bang district is one of the households borrowing capital from the Social Policy Bank Transaction Office (PGD) of Bau Bang district to develop a bamboo planting model. Thanks to the initial capital of 50 million dong from the bank along with her own capital, she buys tree seeds, invests in developing a bamboo garden with an area of 1 hectare. Determine the appropriate direction, understand the growth characteristics of bamboo, take good care, produce products preferred by the market has brought stable income, the family's life gradually improves, and rise out of poverty.

The growth of entrusted capital sources at the local level in the past period has demonstrated the attention of the local Party committees and authorities. The capital has been timely deployed, correctly targeted beneficiaries have effectively promoted the implementation of the province's programs and objectives on rapid and sustainable poverty reduction, job creation, and new rural construction. The results have been recognized and highly appreciated by the authorities at all levels, serving as a basis for further allocation of additional funds to the Provincial Social Policy Bank.

High demands

Since the implementation of Directive No. 40, provinces and districts, towns, and cities have paid attention to increasing the policy credit source for the following year higher than the previous year. However, for the past 3 years, the proportion of local entrusted capital compared to the total policy credit source of the province is still lower than the national average. Along with that, the corresponding capital for implementing policy credit programs is very scarce.

Leaders of the Social Policy Banks in the province said that the demand for capital to solve social credit programs is very large, but only partially met. The government regulates the policy on job creation support, the National Employment Fund has increased the maximum loan amount from 50 million dong to 100 million dong for workers; up to 2 billion dong per project for production and business establishments, and not more than 100 million dong per worker created, maintained, and expanded employment. However, very few households can borrow the maximum amount and almost no businesses have access to this program due to the funding allocated for employment solutions in particular, the funding entrusted from local sources to serve employment solutions is not significant.

Specifically, in the first quarter of 2024, the total amount of policy credit capital in Binh Duong reached over 4,693 billion VND. Of which, central capital accounted for 59% of the total capital, and local capital accounted for 41%. Currently, only 3 out of 9 districts, towns, and cities have transferred entrusted capital to the Social Policy Bank, including Dau Tieng district with 3 billion VND, Bau Bang district with 3 billion VND, and Tan Uyen city with 7 billion VND.

The lack of additional funding for lending is seen as a major barrier to promoting the development of social policy credit. According to Mr. Vo Van Duc, Director of the provincial Social Policy Bank, the reality is that the transfer of local capital to the Social Policy Bank for lending is still facing many difficulties. Many programs, projects, and plans, although approved, have not yet been allocated funding. In the past, the corresponding budget sources from provinces and localities averaged around 200 billion VND per year, but in the last three consecutive years, funding has been very limited. The Social Policy Bank finds it difficult to fulfill its role as a policy supporter.

According to Mr. Vo Van Duc, in 2024, the demand for loans to serve 3 basic programs such as solving employment, social housing, and ex-convicts throughout the province is about 100 billion VND. However, the capital source from local budgets entrusted to implement the above-mentioned policy credit programs is still in a waiting state!

Reported by Thanh Hong – Translated by Vi Bao