VBSP on Job creation program: HIGH DEMAND, LOW SUPPLY

by Bach Thanh

Job creation program of VBSP Hanoi branch over the last time has made great contribution to recover traditional career villages, create jobs, reduce unemployment rate, increase income, improve living standard for employees. However, capital source for this program is still limited, not equivalent to the national target of poverty reduction, ensuring social security at local areas.

We visited the business and production unit for wooden statues of Mr. Hoang Van Ke, in Nhan Hien ward, Hien Giang commune, Thuong Tin district, one of young man wishes doing business from traditional career. Like a predestination adding with hard working, Mr. Ke has extended his small business unit with a few workers to become a famous business unit producing statues, providing for provinces and cities in the country. Repaying off loan for the bank, he continues to borrow loan from job creation program for expanding production activities. His outstanding loan has increased from VND 100 million to VND 200 million and now it is VND 230 million. His business unit has created jobs for 30 workers with average income from VND 2.5 to 3.5 million/person/month. Mr. Ke also said that the Government preferential loan plays as a life saver to maintain his business activities in recent difficult period because of low interest rates and quick procedures. Lending from commercial banks is impossible for small production units because of high interest rates.

The garment processing unit of Mr. Dao Duc Hoang in Phu Thinh district, Son Tay town gets loan of VND 300 million from job creation program for production development, providing a steady income for hundreds of worker. It is noteworthy that although sales of these units from VND 400 million to 1 billion/month, but after deducting expenses, payment of wages for employees, he only earns VND 10 million/month. It shows that projects borrowing from this program has a high community value, if there is no preferential interest rate it is very difficult to create stable jobs for workers. Indeed, the loan has impact not only to the business owners but hundreds of employee (usually they are too old to go to industrial zones), contributing significantly to poverty reduction in the local areas.

Improving the efficiency of capital source

According to Mr. Dao Dung Tuan – Deputy Director of VBSP’s Thuong Tin district, the job creation program has made contribution in changing the economic structure towards commodity production in rural areas and change the perception of some small business households that not catching up with the method of large production. From here, appearing many good business examples. Moreover, through the participation of reviewing loans and program management, the mass organizations and social organizations have opportunity to contact closely with grass root levels for linking economic activities with political mission, promoting the movement in economic activities at the local areas.

The efficiency from the job creation program has been highly appreciated and supported by party committees, authorities and local people at local areas. The Director of VBSP’s Hanoi branch Mr. Bui Quang Vinh said “the year 2011 has been recorded as a year with many achievements of ten credit programs for the poor in the area with the total outstanding loan of nearly VND 8 trillion. Besides capital source for poor households, nearly VND 700 billion for job creation program has created jobs for more than 30 thousand employees in rural areas, particularly in suburban districts”

Although the program has achieved certain results, there are still some concerns resulting from this limited capital resource that failing to meet the demand for job creation, restructuring labor in rural areas, especially in current period. For example, in Thuong Tin district, there are many traditional career villages, during the difficult economic time, many villages met challenges, the capital resource from job creation program of VBSP is a great motivation for households to overcome difficulties. However, funds from this program in the districts is still limited, the outstanding loan until the end of 2011 in Thuong Tin district is more than VND 18 billion and more than VND 16 billion in Son Tay town, that is too small compared to the real demand in the area. So, many opinions said that the Government should increase this funding resource for the aim of both speeding up the poverty reduction rate and ensuring the social security at the local areas.