Adjusting Loan Policies Reasonable To Encourage And Facilitate Meeting Students' Learning Needs

157/QD-TTg has higher income so it should bear higher interest rate to ensure fairness in policy.

3.2.1.3. Adjust lending policies appropriately to encourage and facilitate meeting students' learning needs.

About the loan amount

Determining the loan level for students needs to be appropriate to the current economic situation. The current loan level of 1,100,000 VND/month is unreasonable.

According to calculations, with a loan amount of 1,100,000 VND, students cannot cover their monthly consumption, living and studying expenses. Especially in the current inflationary situation, the price of household goods increases, electricity and gasoline prices increase, leading to a series of other prices also increasing such as: water prices, room rental prices... making the lives of students encounter many difficulties, especially poor students from the provinces who come to the city to study.

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Based on tuition fee increases, price fluctuations and consumer price index, the loan amount has increased from 800,000 VND/student/month (2007) to 860,000 VND (2009) to 900,000 VND/student/month (2010) to 1,000,000 VND/student/month (2011). From August 2013 to present, the loan amount has been 1,100,000 VND/student/month.

According to the tuition fee increase roadmap approved by the Government for each school year under Decree No. 49/2010/ND-CP dated May 15, 2010 on Regulations on tuition fee exemption and reduction, support for learning costs and the mechanism for collecting and using tuition fees for educational institutions in the national education system from the 2010-2011 school year to the 2014-2015 school year, the average tuition fee for the following school year compared to the previous school year will increase from 15% to 20%/month/student.

At the time of issuance of Decision No. 157/2007/QD-TTg dated September 27, 2007, the loan amount was 800,000 VND/month/student. According to a survey at that time, the cost of studying for students was about 1,200,000 VND/month, so this loan amount only met about 60% of the cost of studying for students.

According to the actual survey results in some provinces and cities in the 2014-2015 school year, the cost of studying for a student ranges from 3,500,000 VND/month to 4,000,000 VND/month (The cost for a rural student to study in the city is about 4,000,000 VND/month), the current loan level of 1,100,000 VND/month only meets about 27.5% to 31.4% of the cost of studying for students.

Therefore, adjusting the loan amount to increase (about 2,000,000 VND/student/month to 2,500,000 VND/student/month) can help students have enough money to pay tuition and cover other expenses related to studying, while minimizing the situation of using loan capital for the wrong purpose, affecting credit quality and loan capital efficiency.

Adjusting loan interest rate policy for students in difficult circumstances

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For the People's Credit Fund, financial autonomy is always an unattainable goal.

easy. The most important factor to ensure financial sustainability is the ability to cover operating costs. The activities of the VBSP are not charitable activities but are essentially a bank. In order for the VBSP to operate stably and develop, gradually reducing its dependence on the State budget, the VBSP needs to develop a roadmap to gradually reduce and eventually completely eliminate preferential lending interest rates. The preferential interest rates here only need to be preferential in terms of loan procedures, loan conditions, and loan terms. In the early stages, the extent to which policy beneficiaries need to borrow capital at preferential interest rates must be calculated reasonably, and in the future, they need to be guided towards market interest rates.

Currently, the lending interest rate of the Social Policy Bank is only equivalent to 55% of the market interest rate. This interest rate is lower than the average deposit interest rate of commercial banks. If comparing the lending interest rate of the Social Policy Bank with the deposit interest rate of the same term of commercial banks, the lending interest rate of the Social Policy Bank is much lower than the capital mobilization interest rate of

commercial banks. Therefore, maintaining the current interest rate means that the real interest rate of the People's Credit Fund is negative.

In fact, it has been proven that students can completely accept bank loans with interest rates higher than the current lending rates of the Bank because they are more concerned about the amount of capital borrowed, not just the interest rate. In fact, the lending programs for students currently being implemented by international organizations all apply market interest rates, even higher than the interest rates of commercial banks, but the loan repayment rate is very high. Thus, building an interest rate policy that ensures the development and financial autonomy of the bank is a prerequisite for the Social Policy Bank to operate sustainably. However, this cannot be done immediately but requires a suitable roadmap. Specifically:

+ Phase 1: Implement the lending interest rate policy for policy subjects in the direction of preferential interest rates lower than the lending interest rates on the market but must be higher than the capital mobilization interest rates on the market. Specifically: "Interest rates on capital mobilization on the market < preferential lending interest rates < lending interest rates on the market". The lower rate of the interest rate of the Social Policy Bank compared to the market interest rate is calculated based on the preferential level of taxes payable to the budget and the required reserve ratio at the State Bank... This is to ensure that the Social Policy Bank fully covers its costs and has reasonable profits.

+ Phase 2: Implement lending interest rate policy according to market interest rate. Market interest rate must include 4 components: capital cost, operating cost, risk compensation and profit.

3.2.2. Group of solutions to complete the organization of implementation

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3.2.2.1. Standardize business processes

Continue to research and improve business processes in a simple direction.

but still ensure legal factors to create conditions for students to have complete

facilitate difficult situations when doing loan procedures and reduce workload for loan officers.

With the characteristics of policy lending, the loan subjects are often poor people with low educational level, so the simpler and easier to understand the credit procedures (loan application procedures, disbursement procedures, loan repayment procedures, etc.) are, the more conditions people have to access bank capital more easily.

To do this, the Social Policy Bank, based on the regulations and rules issued by the Government, consulted the People's Committee and the Board of Directors of the Social Policy Bank of provinces and cities to issue guiding documents for districts, communes and wards to develop a management mechanism for lending activities in the direction of reducing administrative procedures in accordance with the actual situation of the locality, creating openness in implementation, eliminating obstacles and inconveniences in lending activities.

On the bank side, the Business Departments continue to review and complete lending processes and procedures in the direction of simplifying procedures, making them easy to implement in practice while still ensuring compliance with the credit principles issued by the State Bank. It is necessary to unify the forms of Confirmation Letters and Debt Repayment Commitments to create consistency in the implementation process at localities, training facilities and beneficiaries. In the debt collection process, more specific instructions are needed for special cases such as joining the army after graduation, labor export, households moving and clearing out of their old residence.

It is necessary to build a system to closely inspect, control and supervise credit activities. Improve the efficiency of internal inspection and control activities associated with specific responsibilities. This must be considered an effective tool in the management of credit quality activities of the VBSP.

Strengthen inspection and control work by topic, according to the point inspection plan or suddenly to promptly detect and correct shortcomings.

shortcomings in the lending process and procedures. Coordinate and urge associations to actively participate in checking loans, remind borrowers to pay debts and interest on time and in full; detect and notify banks of cases of improper use of capital and risks. Enhance the role and responsibility of associations in checking loans, ensuring that the checking is timely and of high quality.

- At the provincial branches of the Vietnam Bank for Social Policies and the district transaction offices of the Vietnam Bank for Social Policies where loans are made, it is necessary to closely coordinate with the local authorities and socio-political organizations entrusted to strengthen the inspection and supervision of loans and urge the collection of overdue debts. At the same time, review the loans, classify and evaluate the loan status, debt recovery ability... thereby proposing appropriate handling measures.

- It is necessary to develop a specific credit process, establish and divide tasks, powers and responsibilities in each lending stage, attach responsibilities and obligations to political and social organizations receiving the trust, heads of savings and credit groups, local authorities and be responsible for material compensation when exceeding authority and allowing capital embezzlement and misappropriation.

3.2.2.2. Improve the quality of the team implementing credit policies for students

In the banking sector in general and the VBSP in particular, human resources are the most important issue, determining the success of every task. Therefore, training staff is a regular and long-term task. In the coming time, the number of staff of the VBSP will increase significantly to meet the demand for expanding lending to poor households and policy beneficiaries. Therefore, the bank also needs to pay attention to the unevenness in staff qualifications to have appropriate training directions.

Human resource development training needs to be conducted in a focused and specialized manner for each type of service, in the direction of determining specific titles for each professional position and work experience.

for each specific position. To do so, it is necessary to develop a standardization orientation for the staff of the Social Policy Bank.

It is necessary to review the existing staff, have a plan for training and retraining, and supplement the shortcomings and weaknesses to improve professional qualifications and skills, and overcome shortcomings.

The staff of the Social Policy Bank need to be trained in the basic skills of bank staff, these are general professional skills that all staff need to grasp. These are:

- Marketing communication skills help staff attract customers, serve more with better quality.

- Information gathering skills help staff know how to collect and exploit useful information for the bank from customers and other sources, to serve their professional activities.

- Analytical skills help staff know how to assess and evaluate the situation on a scientific basis, thereby drawing conclusions and effective measures to continuously improve service quality.

- Negotiation skills help staff negotiate with customers to solve related problems with the most optimal solution.

In addition to professional knowledge and skills, cadres must also be regularly equipped with knowledge and understanding of law, market, economic and financial fields, information technology and foreign languages. At the same time, focus on political and ideological education for cadres, making them see their role, position and responsibility in the unit's activities, so that they can make more and more efforts in their work.

The salary and motivation mechanisms in human resource development must also be built in the direction of: paying wages according to the quantity and quality of work completed instead of paying wages according to the current salary scale. For mountainous areas, remote areas, it is necessary to apply on-site training to exploit and use local human resources. Build

Establish a process for recruiting staff, a process for evaluating and classifying workers according to work quality, thereby linking it to training and arranging suitable staff. Expanding the network needs to be linked to standardizing the organization as well as arranging the bank's payroll. For example, it is necessary to determine the criteria for limiting the number of loans, daily transaction volume, and the number of books and documents that each credit officer, accountant, and cashier must perform to avoid the current overload situation.

In addition to internal training, the VBSP also needs to have a specific strategy for training and capacity building for local partners in implementing loan management. The bank needs to have a training program for its collaborators, which are socio-political organizations in communes, districts, and provinces, on bookkeeping, loan recovery, and full and timely recovery. Because in the long run, this is the main source of support for the bank's operations.

The Social Policy Bank needs to have a long-term staff planning, review and rearrange the staff, and focus on improving the quality of staff through professional training plans, legal knowledge and management skills. In the next 5 years, continue to attach importance to training and retraining staff, considering this a regular and important task, both central and local levels are responsible for implementing.

3.2.2.3. Strengthen close coordination between ministries, branches, socio-political organizations, and local authorities at all levels.

Coordination with the Ministry of Education and Training, the Ministry of Labor, War Invalids and Social Affairs and local authorities in monitoring students during their studies and after graduation to recover student loans in the following direction: Before graduation, the school requires students who have borrowed money and still owe the Social Policy Bank to make a commitment to repay the debt, and are responsible for notifying the school and their families of the address of their work unit when they have a job, have a source of income and are responsible for repaying the debt with their families.

After a period of implementation, there needs to be a summary report to draw lessons from the lending methods, lending procedures, and sense of responsibility of the parties involved to do a good job of lending to students in the future. It is necessary to sign memorandums of understanding between the Social Policy Bank and the school to specify the specific responsibilities of the parties and levels.

The Board of Directors of the Social Policy Bank needs to proactively advise the Party Committee and the People's Committee at the commune and town levels on their operations, assigning qualified permanent staff to lend to students to help the People's Committee at the commune level direct mass organizations to implement preferential lending policies of the Social Policy Bank.

The VBSP needs to regularly inform and promptly exchange with the commune authorities and political organizations at all levels about the operational situation in each place, and take timely corrective measures for places that are not active or do not comply with the regulations of the VBSP. Coordinate with mass organizations at all levels to urge the collection of overdue debts received for handover and newly arising debts, provide monthly outstanding debt data for each organization and lending organizations in a timely manner to create favorable conditions for the organizations and associations entrusted with capital management. This is very important because:

- To help unions and organizations, team officials understand the lending process, create favorable conditions for unions and organizations in receiving and managing capital from the Social Policy Bank, it is necessary to coordinate well with unions and organizations to organize professional training courses to disseminate training content on lending programs for students in difficult circumstances through households.

- At the same time, gradually research and perfect the credit disbursement mechanism, more binding the responsibility of the Head of the Commune and Ward Poverty Reduction Committee in providing preferential loans to reduce credit risks of the VBSP. Because risks in the operation of the VBSP have their own characteristics, not only directly affecting economic efficiency but also having a great impact and influence on society.