Directive 40: Empowering Vietnam’s Socio-Economic Growth Through Policy Banking

Directive 40/CT-TTg, issued by the Prime Minister, focuses on strengthening policy credit to foster socio-economic development and ensure social security in Vietnam. This crucial document provides a favorable legal framework for the Vietnam Bank for Social Policies (VBSP), guiding its operations in supporting policy beneficiaries, contributing to poverty reduction, job creation, and promoting socio-economic progress.

The Role of Directive 40 in VBSP Operations

Directive 40 aims to improve the legal framework for policy credit and enhance the operational efficiency of VBSP, thereby contributing to socio-economic development and ensuring social security.

Specifically, Directive 40:

• Affirms VBSP’s crucial role in implementing social security policies, poverty reduction, job creation, and socio-economic development.
• Proposes concrete solutions to enhance the effectiveness of VBSP’s lending activities, such as expanding borrower eligibility, diversifying credit products, and simplifying loan procedures.
• Requires ministries, sectors, and localities to closely coordinate with VBSP in implementing policy credit programs.

Key Contents of Directive 40 Regarding VBSP

Directive 40 focuses on the following key areas:

Enhancing VBSP’s Operational Efficiency

• Streamlining administrative procedures, shortening the time for loan application review and approval.
• Applying information technology in credit operations, debt management, and debt recovery.
• Enhancing the capacity of VBSP’s staff and officials.

Expanding Borrower Eligibility and Loan Scope

• Adding new policy beneficiaries in line with the current situation.
• Expanding lending to priority sectors such as agriculture, rural development, and labor export.
• Increasing lending to disadvantaged areas and ethnic minority communities.

Diversifying Credit Products and Services

• Developing credit products tailored to the borrowing needs of each target group.
• Developing modern and convenient banking services for customers.

Strengthening Credit Management and Supervision

• Enhancing the responsibility of all levels of government in managing and supervising policy credit activities.
• Strengthening inspection, examination, and strictly handling violations in policy credit activities.

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Achievements After Implementing Directive 40

After more than 10 years of implementation, Directive 40 has yielded positive results, significantly contributing to achieving the country’s socio-economic development goals. Specifically:

• Average annual growth of policy credit has reached over 15%.
• The total outstanding policy credit balance has reached over 2 trillion VND, providing loans to over 70 million poor households and other policy beneficiaries.
• The poverty rate has decreased by an average of 1.5 – 2% per year.
• More than 10 million jobs have been created from preferential loans.
• Rural infrastructure has been significantly improved.

However, despite these achievements, policy credit activities still face limitations such as high non-performing loans, inefficient use of loans, and ineffective communication.

Future Development Direction of VBSP

To further promote VBSP’s role in the new period, it is necessary to focus on the following key solutions:

• Continuing to improve institutions and policies on policy credit.
• Enhancing VBSP’s financial capacity and governance.
• Innovating and improving the quality of policy credit.
• Strengthening coordination between VBSP and ministries, sectors, and localities.

With the efforts of the Government, the State Bank of Vietnam, and the involvement of the entire political system, policy credit activities will continue to develop strongly, contributing significantly to successfully achieving socio-economic development goals, ensuring social security, building new rural areas, and achieving sustainable poverty reduction in Vietnam.

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FAQ

1. What is the significance of Directive 40 for VBSP’s operations?

2. Who benefits from Directive 40?

3. How to access preferential loans from VBSP?

4. What is the role of local authorities in implementing Directive 40?

5. What are the challenges and difficulties facing VBSP in the coming time?

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Common Scenarios

1. I want to borrow capital to develop my family’s economy, where can I borrow?

2. What documents are required for a loan application?

3. What is the loan term?

4. What is the loan interest rate?

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