“The loans have a low interest rate and real impact, helping farmers like us improve our production. My family now grows longan, banana, and pomelo — our three key crops — as well as guava and sapodilla. They’re all starting to bear fruit.” That was Phan Van Son, a resident of Quan Chu commune, one of those who have escaped poverty thanks to preferential credit from the Vietnam Bank for Social Policies (VBSP).

Son’s family once struggled to survive with small-scale farming on hilly land. After getting a low-interest loan, he bought some fruit trees, expanded his cultivation area, diversified his crops, and built a productive garden model that now gives his family a stable income and better living conditions.

Do Duc Hoat, a resident of Bac Kan ward, turned his family’s life around thanks to policy credit. Hoat said his family now receives a steady income from goat farming, and is gradually getting out of poverty. He recalled, “Last year, we borrowed 2,800 USD from the policy bank. We were already raising goats. The loan allowed us to build a new barn and buy more goats. The capital has been used effectively.”

Phan Van Son and Do Duc Hoat are among many in Thai Nguyen who have escaped poverty thanks to policy credit. Unlike the past approach of providing non-repayable assistance, today’s programs provide low-interest, revolving credit, which allows more households to borrow and encourages them to take the initiative to work toward sustainable self-sufficiency.

The Vietnam Bank for Social Policies’ preferential lending is seen as a “leverage tool” for sustainable poverty reduction that helps people develop long-term livelihood models. In Cao Minh commune, where 50% of the households used to be poor, authorities have implemented several livelihood models suited to local conditions.

Ly Van Thanh, head of the commune’s economic section, said, “We target specific indicators among poor households such as housing, education, and income, and work to address them comprehensively. To ensure sustainable results, the commune has launched projects on raising horses, bees, breeding cattle, and native pigs. These are good sources of stable income for residents.”

In many localities, savings and credit groups play an intermediary role between banks and borrowers. Pham Thi Ly, head of a loan group in Quan Chu commune, said, “The policy bank allocates capital for poor or near-poor households. The commune reviews applications to ensure that those in need can get a loan. We also visit households to encourage them to borrow and invest in economic development.”

From difficult communes like Cao Minh and Quan Chu to improving areas like Cho Moi and Phu Lac, the benefit of preferential credit is evident. Hoang Thi Mai, the Party cell secretary of Dong Luong hamlet in Cho Moi commune, said, “Life here has changed a lot. Solid new houses are being built, incomes are stable, and people are happy.”

To ensure that funds reach people promptly, the Vietnam Bank for Social Policies network in Thai Nguyen has adopted flexible disbursement methods. Quan Thanh Tung, Director of the Bank’s Transaction Office in Bach Thong, said, “To ensure rapid disbursement to poor households, even during days off, we help locals deal with loan procedures so they can receive the funds without delay.”