Launching credit support policies: VBSP needs to cooperate with the Ministry of Finance

This information was provided by Deputy Minister of Finance Nguyen Duc Chi, member of the Board of Directors of the Bank for Social Policies (VBSP) at the Conference on launching credit policies to implement Resolution 11/NQ-CP dated January 30, 2022 of the Government on the Socio-Economic Development and Recovery Program held by VBSP in collaboration with the Government Office on May 18 in Hanoi.

Deputy Minister of Finance spoke at the conference. Photo: H.Diu

According to Deputy Minister Nguyen Duc Chi, regarding credit issues as stated in Resolution 11, the Ministry of Finance was assigned to chair and coordinate to perform four tasks, so far three tasks have been completed.

Accordingly, the Ministry of Finance has completed and reported to the Government to issue a decision on the public debt management program in the 2022-2024 period and the plan to repay public debt in 2022, in which granting Government guarantee for VBSP to issue bonds in 2022 is VND20,400 billion. Up to now, VBSP has successfully organized the issuance of bonds with a total amount of VND2,600 billion.

Along with that, the Ministry of Finance also coordinated with ministries and sectors to submit to the Prime Minister for promulgation Decision 05/2022/QG-TTg amending and supplementing Decision 157/2007/QD-TTg on credit for students, with the amendment of many contents to facilitate the operation of VBSP as well as the borrowing and debt repayment of students.

The Ministry of Finance has also coordinated to submit to the Government for promulgating a Decree on interest rate support for loans at VBSP, capital sources for loan, interest rate compensation and management fees for VBSP to borrow according to Resolution 43/2022/QH15.

Currently, according to Deputy Minister of Finance Nguyen Duc Chi, with the task of promulgating a policy of granting 2% loan interest rate compensation in the two years from 2022-2023, the Ministry of Finance has coordinated with the State Bank of Vietnam (SBV) to draft and consult, so this task is entering the final stage, waiting for the evaluation opinion of the Ministry of Justice to submit to the Government for promulgation at the earliest, trying to complete in May 2022.

"Basically, the tasks which are assigned to the Ministry of Finance to chair or coordinate with relevant ministries and sectors to perform the tasks in Resolution 11, have been basically completed," the Deputy Minister of Finance said.

However, the representative of the Ministry of Finance also acknowledged the fact that the implementation of tasks under Resolution 11 of VBSP still had many difficulties and challenges, so it is necessary to have the right and effective solutions.

According to Deputy Minister Nguyen Duc Chi, regarding the mobilization of resources and capital, according to the decision issued by the Government, VBSP is allowed to mobilize VND20,400 billion, but so far, despite many efforts, it only achieved VND2,600 billion in nearly five months, equal to 13% of the target.

Therefore, the task of issuance and disbursement from now to the end of the year is very large in the context of financial and capital market fluctuations, especially since the interest rate tends to increase. The Deputy Minister of Finance said that VBSP needed to coordinate with the Ministry of Finance to find flexible solutions.

The second difficulty, according to Deputy Minister Nguyen Duc Chi, is about human resources and administration. The reason is that there are 26 programs implemented under Resolution 11, 15 programs will be disbursed in the near future, 11 programs have expired but still have to continue to monitor.

These programs all have high credit balances, so they need to focus on disbursement for loans. This poses a challenge to the management capacity of VBSP, which must arrange human resources to ensure efficiency in the context of the general policy of not increasing staff numbers.

The biggest difficulty, according to the Deputy Minister of Finance, is risk management and credit quality control. Although the bad debt ratio at VBSP is at a level where it can be "assured", it still tends to move up. Thus, VBSP needs to pay great attention to ensure that credit is provided in a timely manner but it must meet standards and ensure quality with high recovery ability and the lowest bad debt balance.

"The ministries, sectors and localities need to support VBSP in implementing political tasks, including tasks stated in Resolution 11 to achieve the success and quality," Deputy Minister Nguyen Duc Chi said.