In a field visit to learn about VBSP's activities in Vinh Ngoc commune in Hanoi’s suburban district of Dong Anh, the APRACA delegation explored a VBSP commune transaction point, the entrustment of loans through mass organisations, activities of local savings and credit groups as well as methods of transferring and managing loans.

The delegation learns about policy credit programmes of VBSP transaction point in Vinh Ngoc commune, Dong Anh district in Hanoi

Gouri Krishna, general director of Basix consulting organisation (India), said that making transactions at commune transaction points through local authorities, mass organisations, and savings and loan groups was a unique feature of VBSP, which is worthwhile for APRACA members and countries with a high rate of poor households to learn from.

In addition, the publicity of credit programmes, outstanding loans of each household, and interest rates of various programmes shows the transparency and democracy of Vietnam’s credit policy.

Krishna appreciated the management model of the VBSP system. “This is a unique management model of the VBSP system, matching the current context, creating favourable conditions for beneficiaries in borrowing, repaying and getting policy credit information timely, helping to reduce costs and travel time when transacting with VBSP units, and creating trust for the people,” he said.

The delegation of APRACA visited a model of using loans to develop orchards and raise chickens

Visiting households with typical poverty reduction models, Prasun Kumar Das - secretary general of APRACA said that VBSP lending to poor households and other policy beneficiaries was very effective. Such loans and economic development models are worth learning and expanding, and VBSP’s experience in loan distribution and management is a lesson for many countries in the world to learn.

Dr. Das also affirmed that the credit policy programmes VBSP is implementing are the credit channels that help the poor and other policy beneficiaries improve their lives, escape poverty and improve their qualifications. Thanks to loans from VBSP, the status of the poor in Vietnam has improved.

At the workshop “Pro-Poor Rural and Agricultural Finance Best Practices: Experiences of Vietnam,” which was co-hosted by VBSP, APRACA, and the International Fund for Agricultural Development (IFAD), Dr. Das said that with 6.7 million regular savings depositors, VBSP is currently capable of mobilising savings most effectively among key providers of microfinance services with 70 per cent market share.

This is due to the bank's unique customer approach. VBSP has created an effective credit and debt collection system that reduces transaction costs for customers and the bank while achieving impressive coverage at the commune level.

“It must be stated that it is not only the role of VBSP in poverty alleviation that is significant but the efforts for poverty reduction made by the Vietnamese government, which has consistently pursued the programme. This is the main reason for one of the region's fastest poverty alleviation achievements,” said APRACA's secretary general.