Current Status of Development of Loan Activities for Employment at the Social Policy Bank, Hanoi Branch

That is to propose appropriate target programs aimed at policy subjects in need of capital with diversification in terms and loan interest rates.

Qualities and capacities of bank officers and employees.

The qualities and abilities of bank staff greatly affect the quality of credit operations. Quality human resources are reflected in many aspects such as experience, professional qualifications, health, enthusiasm and ethics of the staff. In other words, the ethics of credit staff is a key factor in the success of credit management.

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Regarding the Social Policy Bank, the main service objects are the poor and policy beneficiaries. In general, these are often disadvantaged groups in society, with a very inferiority complex, so creating closeness and friendliness between bank staff and customers is very important. This will help them eliminate their inferiority complex, create a bond between customers and the bank and make them keep their trust with the bank. Particularly for lending activities for policy beneficiaries, bank staff must also be people who understand the hardships and difficulties of the poor and policy beneficiaries, from which they will have certain motivations in the process of bringing preferential capital from the Government and other organizations and individuals to those in need of assistance. Therefore, training to improve the capacity and professional ethics of bank staff is very necessary.

Infrastructure and information technology.

The completed infrastructure and information technology will create the premise for banks to expand the types of services to serve customers. Not only that, this will help simplify lending procedures, handle internal work within the bank, thereby saving costs for both the bank and borrowers who are policy subjects. Simultaneous implementation of service types will allow banks to increase operational efficiency and increase their reputation with customers. A good technology system combined with timely and accurate information can minimize risks in banking activities related to the issue of asymmetric information when the policy subject group is a group with limited information provided to the bank.

The information also helps managers analyze and monitor whether credit policies are effectively implemented and in accordance with the State's policies and guidelines, thereby making appropriate adjustments or making timely recommendations to relevant functional units.

In general, factors of strategy, staff capacity, facilities and information technology are the basic factors affecting the lending activities of the banking system. However, due to the specific characteristics of the subjects, operating policies and establishment, the development of lending activities at the People's Credit Fund is also affected by:

Relationship between the People's Credit Fund and local authorities, associations, departments, sectors and unions.

The activities of the VBSP have a close relationship with the government, social-political organizations, and local departments and branches. Lending to poor households and other policy beneficiaries cannot be effective without building good relationships and receiving support from mass organizations, associations, departments and local authorities. The VBSP operates according to the mechanism of collecting information from each borrower through local authorities. Therefore, although it is responsible for lending and managing loans, the quality of the VBSP's lending depends largely on the organizations and relationships with the above organizations. With the help of local authorities, social-political organizations, and mass organizations, the bank's capital can easily reach the hands of workers because no one knows the economic situation of the people like the local authorities where they live.

1.4.2. Objective factors

Credit activities for poor households and other policy subjects are high-risk activities, highly dependent on the economic and cultural environment.

- social, legal environment. These are factors that are not under the control of the bank but have a significant impact on the credit activities of commercial banks in general and the preferential credit activities of the People's Credit Fund in particular:

Legal corridor and macroeconomic policies of the State.

In any country, all activities of financial institutions in general and the banking system in particular are strictly controlled by legal sanctions as well as macroeconomic policies of the state. Therefore, to ensure the safety of the banking system's operations, a synchronous legal system is required. In particular, the majority of customers of the Social Policy Bank are policy beneficiaries, with limited legal awareness, and personal loans at the Social Policy Bank do not require loan guarantees, which can easily cause negative impacts on credit activities. Therefore, creating a complete and synchronous legal system will create a favorable legal corridor for the credit activities of the Social Policy Bank.

Policies and guidelines of the Party and the State are important factors, demonstrating rationality, timeliness, efficiency and consistency. To ensure rationality, lending policies need to be developed, issued and implemented promptly, otherwise changes in practice will cause the rationality of the policy to be lost. The effectiveness of the policy system is partly built by credit policy, but it also contributes to the success of credit activities at the VBSP. If other policies such as education, health, investment... for the poor and other policy subjects are not effective, it is of course difficult to expect lending policies to be effective. To ensure effective coordination of policies and bring about high resonance, the Government's policies must be highly consistent, helping the management of VBSP capital resources to be favorable.

Due to the specific nature of the loan program, the loan source, loan amount, loan interest rate, loan method, and loan term of the program are all decided by the Government from time to time. The Social Policy Bank is only an organization that receives the authorization to disburse, collect debt, and collect interest from each borrower. Any change in the Government's policy will have a significant impact on the operation, lending results, number of borrowers, loan amount, loan turnover, etc.

Preferential interest rate policies often give rise to some negative aspects such as: making customers dependent, calculating business carelessly and being less proactive; creating the impression that the program is more about welfare than lending, even borrowers do not see the need to repay the debt, because of preferential interest rates, borrowers can misuse the loan such as re-lending or saving with higher interest rates, causing negative effects in lending, choosing the wrong borrower, competing for loan capital, etc. All of this will directly affect loan management.

Economic and social conditions in the country.

When the economy is in a period of rapid and stable development, people's living standards will tend to improve, which means that the demand for goods will increase. At that time, the economy will create more wealth, leading to an increase in the demand for jobs, giving people more career opportunities. The development of the economy will affect the activities of the Social Policy Bank in the following ways:

Along with the development of the economy, the demand for capital for production, including policy subjects, is increasingly large and urgent, so the VBSP needs to provide sufficient and timely capital for people's production activities. The development of the economy makes the opportunity for poor households to escape poverty greater, so the efficiency and quality of credit activities of the VBSP will be improved.

Natural conditions.

Customers who borrow GQVL capital at the Social Policy Bank mainly invest in livestock, crop cultivation, agriculture, forestry, etc. Therefore, when natural conditions such as natural disasters, storms, floods, plant and animal diseases, etc. often occur on a large scale, they will cause great damage to small-scale production and farming households, which will affect customers' ability to repay bank loans, affecting the quality of bank credit. On the contrary, favorable weather, less storms, floods, natural disasters, droughts, epidemics, etc. will be more favorable in improving credit quality.

The level of education, production practices, and consumption habits of society.

In rural and mountainous areas, where the population's education level is low, families generally lack professional knowledge and scientific and technical knowledge.

technology in cultivation, animal husbandry... even many areas still have a heavy subsidy mindset. If the intellectual level of customers is limited, the effectiveness of loans from the VBSP is very low, and the poor will even become poorer due to loss of capital and accumulation of bank debts. Customers' awareness of rights and obligations regarding loans is also very important because if the poor consider loans from the VBSP as a subsidy, they will inevitably not care about repaying bank loans and loans may be lost or misused, thus affecting the quality of bank credit activities.

Population situation.

Population growth and structure are among the factors that strongly affect the labor and unemployment rates, thus also affecting the demand for job creation and job creation loans. Currently, Vietnam is a country with a young population, abundant labor resources, but the rate of highly qualified workers is still low, the unemployment rate is increasing not only in rural areas but also in big cities. Therefore, when building a loan strategy for job creation, the Social Policy Bank must comprehensively assess the influence of this factor. It not only determines the specific subjects that enjoy preferential credit support from the State but also determines how to allocate capital appropriately to the needs of each locality and region.

CONCLUSION OF CHAPTER 1

Chapter 1 presents a synthesis of the most general theories on employment, job creation, the need for job creation support, and basic issues on job creation lending activities at the Social Policy Bank. In which, the author presents concepts and characteristics, thereby analyzing the influencing factors and criteria for evaluating job creation lending activities. The contents presented in Chapter 1 are the basis for implementing the analysis and evaluation of the current situation and development of policy lending activities to solve employment at the Social Policy Bank, Hanoi Branch in Chapter 2 and proposing solutions in Chapter 3.

CHAPTER 2 CURRENT STATUS OF DEVELOPMENT OF EMPLOYMENT LENDING ACTIVITIES AT THE SOCIAL POLICY BANK, HANOI BRANCH

2.1. Overview of the Social Policy Bank, Hanoi Branch

2.1.1. History of establishment and development of the Social Policy Bank, Hanoi Branch

At the 9th National Party Congress on the Socio-Economic Development Strategy for the 2001-2010 period, it was clearly stated that “ Restructuring the banking system. Distinguishing the functions of the State Bank and State Commercial Banks, the lending function of the Policy Bank from the monetary business function of the Commercial Bank ”. Therefore, the establishment of a type of Policy Bank for the purpose of poverty reduction, using resources from the State and the whole society to provide loans and assistance to policy beneficiaries in poor areas, poor communes and poor population groups, is an objective necessity for the development process and international integration of Vietnam.

The Vietnam Bank for Social Policies was established under Decision No. 131/2002/QD-TTg dated October 4, 2002 of the Prime Minister to separate policy credit from commercial credit on the basis of reorganizing the Bank for the Poor. This is a great effort of the Vietnamese Government in restructuring the banking system to implement the national target program and its commitment to the international community on hunger eradication and poverty reduction. The activities of the Vietnam Bank for Social Policies are not for profit. The establishment of the Vietnam Bank for Social Policies plays a very important role, as a bridge to bring the Government's preferential credit policies to poor households and other policy beneficiaries, creating conditions for the poor to access the policies of the Party and the State, poor households and policy beneficiaries have the opportunity to be close to local public agencies, helping these agencies to be closer to and understand the people better.

The Social Policy Bank is an independent legal entity with a seal, assets and a transaction system from central to local levels. Its charter capital granted in 2003 was VND 5,000 billion, reaching VND 18,270.5 billion by December 31, 2021, with a term of operation of 99 years. The Social Policy Bank has an apparatus

unified management and operation nationwide, provided with capital by the State and guaranteed solvency, required reserve ratio of 0%, not required to participate in deposit insurance, exempt from taxes and other payments to the State budget.

On that basis, the Hanoi Branch of the Vietnam Bank for Social Policies and the Ha Tay Branch of the Vietnam Bank for Social Policies (the predecessor of the current Hanoi Branch of the Vietnam Bank for Social Policies) were established under Decisions No. 19/QD - BOD and No. 22/QD - BOD dated January 14, 2003 of the Chairman of the Board of Directors of the Vietnam Bank for Social Policies, officially opened and put into operation from April 11, 2003, receiving the handover of capital and outstanding loans of 334 billion VND, of which: Loans for job creation from the State Treasury are 92 billion VND, loans for poor households are 237 billion VND from the Bank for Agriculture and Rural Development, loans for students in difficult circumstances are 5 billion VND from the Bank for Industry and Trade. On the basis of the merger of the old Hanoi city and Ha Tay province, on January 2, 2009, according to Decision 01/QD-HDQT of the Chairman of the Board of Directors (BOD) of the Social Policy Bank, the two branches of the Social Policy Bank in Hanoi and Ha Tay province were merged to establish the current Hanoi City Social Policy Bank Branch; implementing lending for policy programs in Hanoi; headquartered at No. 27, Nguyen Co Thach Street, My Dinh II Ward, Nam Tu Liem District, Hanoi City.

2.1.2. Organizational structure and operating network of the Social Policy Bank, Hanoi Branch

The organizational model of the Social Policy Bank Hanoi Branch is composed of four components, mobilizing the combined strength of the entire political and social apparatus and the people, joining hands to implement the national target program on hunger eradication and poverty reduction, job creation, contributing to the construction of new rural areas, ensuring social security, including: The administrative apparatus is the Board of Directors at all levels, the operational apparatus is the Headquarters of the Social Policy Bank City Branch and 28 Social Policy Bank transaction offices in districts, towns and cities in the city, shown in the diagram below:

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