Northwest Seeking Capital Flow

The Northwest Steering Committee and the Vietnam Bank for Social Policies (VBSP) co-organised a review meeting on five years (2011-2015) of credit policy implementation in the Northwest and two years of enforcement of Directive 40-CT/TW dated November 22, 2014 of the Secretariat of the Party Central Committee on strengthening the leadership of the Party in social policy credit in Lao Cai City, Lao Cai Province on September 21, 2016.

 

The Northwest has a specially strategically important position in socioeconomic development, national defence and security and foreign policy. This is a region with great potential and advantages in agriculture, forestry, mining, tourism, border gate economy, and particularly huge potential for hydroelectric development.

 

The government always places a top priority on comprehensive development of the Northwest. In the 2011 - 2015 period, its overall economic growth and per capita income gradually narrowed the gap with the national averages. In 2015, its per capita income was VND27.8 million, 1.8 times higher than in 2011. Social development investment capital accelerated, with the State-funded capital rising 11.5 per cent a year.

 

But, the Northwest is still the poorest region in the country. It features a complex terrain dissected by rugged mountains, difficult traffic movement, harsh climate and low literacy level. Its farming practices are backward and a lot of resources and advantages remain untapped. Up to 45 out of 64 poorest districts classified by Resolution 30A of the Government are in the Northwest. According to statistics, the region's poverty rate was 29.14 per cent and the near-poverty rate was 9.8 per cent in early 2016.

 

The capital funded by the Vietnam Bank for Social Policies plays an important role in the fight against poverty in the Northwest. Policy credit programmes have helped the poor, ethnic minorities and other policy beneficiaries with soft loans to improve their livelihoods. Currently, there are nearly 20 policy credit programmes and some entrustment programmes and projects, including credits for the poor, the near-poor and the just-poor; credits for students; credits for production by poor household in disadvantaged areas; credits for employment; clean water and rural sanitation programme, and housing support programme for the poor.

 

Over 2.2 million poor households, near-poor households and policy-beneficiary households have had access to preferential credit loans valued nearly VND45 trillion (US$2 billion) since 2011. Currently, more than 1.2 million poor households and policy beneficiaries are indebted to the Vietnam Bank for Social Policies. The delinquency rate of the Northwest is only 0.25 per cent on total outstanding loans, much lower than the average of the entire banking system. Policy credit has helped over 318,000 households to escape from poverty, created jobs for nearly 114,000 people, including nearly 6,000 people working overseas for a definite time, assisted over 121,000 poor students to continue education, built 681,000 water supply and sanitary works, and constructed nearly 61,000 houses for the poor and policy beneficiaries in the Northwest.

 

Mr Nguyen Van Binh said, outstanding loans of social policy credit programmes valued VND29,826 billion in the Northwest as of December 31, 2015, up 62.8 per cent compared with 2010 and the value was VND32,194 billion as of August 31, 2016. The average annual credit growth in the 2010-2015 was 10.3 per cent, higher than the county’s average of 9.8 per cent. Nevertheless, the delinquency rate was very low, accounting for only 0.25 per cent on total loans as of August 31, 2016.

 

For the time being, the Northwest is still a ‘poor core’ of the country since its poverty rate is 29.14 per cent, 2.95 times higher than the rate of the nation, Binh said. Many provinces have poverty rates of 40 - 50 per cent. Hence, it is necessary to expand and improve the effect of policy credit performances in the Northwest in the coming period.