06 solutions to enhance the effectiveness of social policy credit in the new phase in Vietnam

06 solutions to enhance the effectiveness of social policy credit in the new phase in Vietnam​ (Image from the Internet)

On October 30, 2024, the Central Executive Committee of Vietnam issued Directive 39-CT/TW, aiming to enhance the effectiveness of social policy credit in the new phase.

06 solutions to enhance the effectiveness of social policy credit in the new phase in Vietnam

In the context of the new situation, especially the complex and unpredictable impacts of traditional and non-traditional security issues, along with the determination to achieve the goal of becoming a socialist country with high middle income by 2030 and high income by 2045, there is a requirement to enhance the effectiveness of social policy credit.

The Secretariat requires the party committees, party organizations, authorities, Vietnam Fatherland Front, and socio-political organizations to thoroughly grasp and effectively implement the following main tasks and solutions:

(1) Strengthen leadership, direction to disseminate, grasp, and organize the good implementation of the Communist Party’s guidelines, State policies, and laws on social policy credit, ensuring high consensus in understanding the position and role of social policy credit. Thereby, affirming that social policy credit is a creative solution with deep humanitarian values, significantly contributing to ensuring socialist orientation in implementing national target programs and social welfare policies, and economic-social development of the country.

It reflects the Communist Party’s perspective on sustainable, creative, inclusive development, linking economic development with social development, economic growth with social progress, and fairness; placing humans at the center, leaving no one behind; serves as an economic tool for the State to play a regulatory role in a socialist-oriented market economy; acts as a motivation and resource for social policy beneficiaries to actively participate in production, business, and improve their lives.

(2) Enhance the role of party committees, party organizations, authorities, Vietnam Fatherland Front, and socio-political organizations concerning social policy credit.

Identify social policy credit work as one of the key tasks in implementing the economic-social development plans of units and localities and the 10-year economic-social development strategy 2021 - 2030.

Ministries and central authorities, local governments, and socio-political organizations strengthen cooperation in building and implementing social policy credit programs; provide training, technical support, technology transfer, and product consumption; build and replicate good production and business models, effectively utilizing loan capital.

The Vietnam Fatherland Front and socio-political organizations continue to effectively fulfill their functions of propaganda, supervision, and social critique regarding the Party’s guidelines, State policies, and laws on social policy credit. Socio-political organizations continue to efficiently carry out entrusted activities from the Social Policy Bank.

Strengthen inspection, supervision, and auditing activities regarding the mobilization, management, and use of funds of the Social Policy Bank, preventing corruption, waste, and negativity; control and prevent risks that may affect the payment ability and operational efficiency of the Social Policy Bank.

(3) Complete the system of mechanisms and policies for social policy credit towards inclusivity, sustainability; place within the overall implementation of the 10-year economic-social development strategy 2021 - 2030, 5-year economic-social development plan 2026 - 2030, national financial inclusion strategy until 2025 with orientation to 2030, Social Policy Bank development strategy until 2030, and national target programs.

Expand the scope, scale, beneficiaries, increase loan amounts, and loan duration in line with the goals of national target programs, economic-social development goals, state budget balancing capacity, development conditions, characteristics of each region or area, production and business cycles; focus on providing social policy credit to those affected by natural disasters, epidemics, poor students, and other emergency cases...

Implement the highest incentives for poor households, ethnic minority households, difficult areas, ethnic minority and mountainous areas; followed by near-poor households and newly out of poverty households; and other policy beneficiaries. The incentive levels are adjusted in accordance with actual conditions.

Review and evaluate the effectiveness of current social policy credit programs. Research and build mechanisms to integrate social policy credit with national target programs, economic-social development programs, and projects, social welfare policies; enhance credit support for production activities according to chains, linkage cooperation to change production methods, increase capital use efficiency for the poor. Research criteria for classification and procedures to define beneficiaries, impoverished areas, areas with medium income, and issue multi-dimensional poverty standards for the period 2026 - 2030.

(4) Prioritize resource concentration, diversify capital mobilization channels to implement social policy credit programs, ensure that operating capital is allocated within the medium-term and annual public investment plans for the Social Policy Bank, with the state budget and budget-like sources as the mainstay, entrusted sources from localities being important, alongside strengthening the mobilization of contributions from organizations, enterprises, individuals domestically and internationally, and international organizations.

- Research and focus capital sourced from the state budget and budget-like sources into the Social Policy Bank. Strive by 2030 to have the state budget capital allocated to the Social Policy Bank account for 30% of the total capital. Raise the bond issuance limit guaranteed by the Government of Vietnam for the Social Policy Bank, aiming for this source to account for 30% of the total capital by 2030. Create mechanisms and policies for the Social Policy Bank to receive ODA and preferential loans from the Government of Vietnam. Localities should continue to promptly allocate entrusted local budgets to the Social Policy Bank, striving annually to account for about 15 - 20% credit growth of the Social Policy Bank and by 2030 account for 15% of the total capital.

- Continue to maintain the cash deposit balance by 2% of the source mobilization balance in Vietnam Dong of state credit institutions at the Social Policy Bank. Create flexible mechanisms to mobilize other resources outside the state budget. Enhance capital mobilization from deposits, loans, funding from organizations, individuals domestically and internationally; strengthen mobilization contributions to the "For the Poor" Fund to supplement capital for social policy credit.

(5) Develop the Social Policy Bank as a public financial institution with self-control ability, operating not for profit objectives, implementing the State’s economic-social policies, focusing on areas that market principle-based financial institutions cannot respond to or can only partially meet.

- Continue to maintain the specific organizational model and method of social policy credit management of the Social Policy Bank. Research and improve the governance mechanism, capital formation mechanism, financial mechanism of the Social Policy Bank towards stability, sustainability.

Improve and enhance the quality, effectiveness of the inspection and supervision system, the forecasting, analytical capacity; improve early warning capability against potential risks in the Social Policy Bank system. Perfect the debt classification regulation, risk provisioning, and risk-handling mechanisms to ensure safe debts, suitable with the characteristics and nature of the Social Policy Bank’s operations. Develop mechanisms to cooperate with relevant agencies in monitoring, supervising, urging, recovering, and handling debts in credit activities.

Build a team of Social Policy Bank staff with professional capacity, professional ethics, reputation, professional, modern working style, dedicated to serving the people. Continue to perfect the salary, income mechanism to attract and stabilize the human resource of the Social Policy Bank.

Simplify the processes and procedures for loan applications, diversify products, develop appropriate service types, modernize management operations. Promote digital transformation, build a digital banking platform, digitize policy management and implementation processes, ensure security, safety, confidentiality, pay attention to connecting national and sector databases to update and manage social policy credit beneficiaries.

(6) Research specific mechanisms and policies to strongly encourage social policy credit models, especially community involvement, social enterprises, non-profit-driven enterprises; encourage the development of digital platforms for social policy credit, effectively control black credit.

For more details, refer to Directive 39-CT/TW dated October 30, 2024.

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