Hanoi (VNA) – Credit policy plays the key role in the country’s povertyreduction efforts with its main target being poor households and ethnicminority groups.

Overthe past years, credit packages have been designed for poor households andthose from ethnic minority groups, helping them to improve production andincome themselves.

Gettingsupport credit through the Vietnam Bank for Social Policies (BVSP), borrowers arerequired to take responsibility for ensuring the effectiveness of the capital.

BVSPDeputy General Secretary Bui Quang Vinh said that as of the first quarter ofthis year, total activated capital of the bank was 173.8 trillion VND, up 7percent over the end of 2016, while total outstanding balance of creditprogrammes reached over 163 trillion VND distributed to more than 6.8 millionpoor people and policy beneficiaries.

Thecredit helped reduced the ratio of poverty by 2 percent each year to 4.25percent in 2015 from 14.2 percent in 2010.

Thepercentage of poor households in poor districts also fell to 28 percent in 2015from 58.33 percent in 2010, or an average 6 percent annually.

From2016, Vietnam started applying new multi-dimensional poverty standards for2016-2020, for which a poor household in rural areas is defined to have the lowestincome of 700,000 VND per person per month, and 900,000 VND per person a monthfor those in urban areas.

Withthe new standards, the ratio of poverty in the country increased 10 percent,noted Vinh who said that many difficulties and challenges have faced povertyreduction efforts, requiring suitable adjustments in the credit policy.

In2017, the BVSP was assigned to post an 8 percent credit growth compared to2016, equivalent to about 11.3 trillion VND.

Accordingto deputy head of the National Assembly’s Committee for Social Affairs Bui SyLoi, the increase of credit resources for the implementation of sustainabledevelopment goals is necessary.

Heheld that along with support in credit, it is crucial to strengthencoordination between credit policies and support in technology transfer, thus helpingthe poor to access capital and promote production.

Loansshould also go along with production guidance, support and supervision, hestressed.

NguyenManh Thien, Vice Director of the BVSP’s Department for Credit for the Poor,said that the poor and policy beneficiaries often lack business and financialmanagement skills, which make them more vulnerable to impacts of naturalresources and other incidents.

Thebank has also exerted efforts to complete its policies and mechanisms, thushelping minimize the poverty relapse rate.

Manyexperts said that the bank must design specific credit policies for eachlocalities and regions with different interest rates, while strengtheningcommunications to change the poor’s mindset and inspire them to overcome theirdifficulties to get rid of poverty.-VNA