Directive No. 09/2004/CT-TTg on enhancing the capacity and effectiveness of operations of the Social Policy Bank

DIRECTIVE

On Enhancing the Capacity and Effectiveness of Operations of the Social Policy Bank

After one year of implementing Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government and Decision No. 131/2002/QĐ-TTg dated October 4, 2002 of the Prime Minister, the operations of the Social Policy Bank have achieved significant initial results. A system of Social Policy Banks has been established from central to all local levels. The inventory work and handover process have been carried out well, concentrating credit resources for social policies into a single organization, separating policy credit from commercial credit. The Social Policy Bank has also actively organized capital mobilization for lending according to plans, contributing positively to the national efforts to eliminate poverty and hunger. To continue consolidating and enhancing the effectiveness of the Social Policy Bank's operations, the Prime Minister instructs relevant ministries, local people's committees at all levels, and the Social Policy Bank to immediately implement the following tasks:

1. All levels of government must closely coordinate with the Fatherland Front, mass organizations, under the leadership of Party committees at all levels, to launch nationwide competitive movements, awaken and mobilize the potential of the entire population, each village, each family, and each clan,... striving to quickly eliminate poverty and hunger, and strive to become prosperous for themselves and their country; contributing to achieving the goal of "a wealthy people, a strong country, a fair, democratic, and civilized society." The Social Policy Bank needs to deeply understand the resolutions of the Party and the Government, take positive measures, and fully leverage the role of social policy credit as a bridge helping the poor transition from small-scale production, self-sufficiency, to commodity production in a market economy, overcoming poverty and moving towards legitimate wealth.

2. Allocating capital for the poor and policy beneficiaries to borrow preferentially for economic development and improved living standards is the essence of our regime and an urgent requirement in the current stage. Therefore, relevant sectors and levels need to focus on enhancing the financial capacity of the Social Policy Bank to better meet the borrowing needs of poor households and other policy beneficiaries.

a) The Ministry of Finance shall take the lead, in coordination with the Ministry of Planning and Investment, and the State Bank of Vietnam, to submit to the Prime Minister in the second quarter of 2004 a proposal to increase the charter capital of the Social Policy Bank to be implemented immediately in 2004.

b) Provincial and district People's Committees shall propose to the People's Councils at the same level to allocate part of the local budget funds from increased revenue and expenditure savings in annual plans to increase credit sources for lending to poor households and other policy beneficiaries in their areas. For regions with the ability, there should be plans to supplement additional entrusted capital managed by the Social Policy Bank for lending under designated programs and projects of the region, to complete the poverty reduction program of their own region as soon as possible.

c) The Ministry of Planning and Investment and the Ministry of Finance shall create conditions for the Social Policy Bank to access and seek financial resources from international financial organizations, governments, and non-governmental organizations so that the Social Policy Bank can manage and utilize more preferential funds and technical assistance projects from these organizations.

d) The Social Policy Bank must be more proactive and active in raising capital from domestic and foreign organizations and individuals, opening various forms of capital mobilization suitable for different groups and periods, seeking non-interest or low-interest capital sources to supplement lending capital.

3. Strengthen strict management of capital sources, use capital for its intended purpose effectively, recover capital fully and promptly both principal and interest.

a) The Board of Directors and the Branches of the Board of Directors, the Management Board at the Central level and provincial branches, and county transaction offices of the Social Policy Bank need to proactively propose solutions to local leaders to closely coordinate credit lending activities for poor households and policy beneficiaries with the restructuring of production, linked to agricultural, industrial, forestry, fishery promotion programs, and technology transfer; coordinate with the Fatherland Front and mass organizations in considering loans, entrusting some bank tasks, guiding the proper use of borrowed capital, and urging debt recovery.

b) It is necessary to strengthen the inspection and supervision of Party committees and governments, the Board of Directors and Branches of the Board of Directors, and mass organizations over the activities of the Social Policy Bank. The Social Policy Bank needs to establish mechanisms and create all conditions for the public to inspect and supervise the bank's activities. In cases where there is the ability to repay but intentionally delay repayment, the Social Policy Bank needs to promptly report to the local Party committee and government to take appropriate measures, including coercive measures, to recover debts. Firmly prevent anyone or any organization from misappropriating the capital of the Social Policy Bank, preventing poverty reduction capital from being lost or wasted, but it must be preserved and developed.

4. Continue to perfect the management mechanisms for social policy credit.

Recently, the Social Policy Bank has only completed the handover of capital sources from different units and organizations to continue lending according to existing regulations without necessary amendments. To enhance the effectiveness of the new mechanism and improve the operational efficiency of the Social Policy Bank, the following actions need to be taken in the future:

a) The Ministry of Labor, Invalids and Social Affairs shall take the lead, coordinate with the General Statistics Office and relevant agencies to conduct investigations, classify, and assess the current situation of poverty in the country, study and submit to the Government for immediate announcement in 2004 the poverty standard to be applied during the 2006-2010 period, moving towards international poverty standards. In 2005, localities must investigate and statistically record poor households according to the new standard to serve as a basis for building programs and measures to eliminate hunger and reduce poverty by 2010, ensuring sustainable poverty reduction and preventing re-poverty.

b) The Ministry of Labor, Invalids and Social Affairs shall take the lead, together with relevant ministries and the Social Policy Bank, to research, build, and at the latest by May 2004, submit to the Prime Minister for issuance a management mechanism for the National Employment Fund in accordance with Decree No. 78/2002/NĐ-CP dated October 4, 2002, and Decree No. 39/2003/NĐ-CP dated April 18, 2003 of the Government, on the principle that state management agencies must transfer operational functions and tasks related to credit activities to the Social Policy Bank.

c) The State Bank of Vietnam shall take the lead, coordinate with relevant agencies and localities to research, and at the latest by the end of the third quarter of 2004, submit to the Government for revision and supplementation of certain provisions of preferential credit policies for regions II and III and communes under Program 135, in line with current actual conditions. Special preferential policies should be implemented for these areas, but specific investment targets between the Social Policy Bank and the Development Support Fund must be clearly distinguished.

d) The Ministry of Finance shall take the lead, together with relevant ministries, agencies, and the Social Policy Bank, to research and submit to the Prime Minister in the second quarter of 2004 for revision and supplementation of the entrustment mechanism and entrustment fees for loans by the Social Policy Bank to credit organizations and political-social organizations, with the requirement of timely transferring capital to borrowers, reducing costs; and under no circumstances should funds be left idle while poor households and policy beneficiaries need loans.

đ) The Social Policy Bank shall review all issued documents comprehensively; evaluate their effectiveness in practice; promptly propose to competent authorities for necessary revisions and supplements to create a legal framework for the Social Policy Bank to operate with discipline, in accordance with the law, and ensure efficiency. In the short term, it is necessary to delegate some financial management functions, asset management powers to branches and transaction offices to enhance their initiative and responsibility. Delegation must go hand in hand with increased supervision and monitoring by superiors and the Board of Directors' Representative Councils.

5. Enhance material infrastructure for the Social Policy Bank.

a) The Social Policy Bank is a tool of various levels of government to implement the Poverty Eradication and Reduction Program. Therefore, ministries, provinces, and districts must appropriately invest to ensure that the Social Policy Bank has sufficient conditions and means to operate safely and conveniently.

b) The Ministry of Planning and Investment shall coordinate with the Social Policy Bank to develop a project for the construction and completion of office buildings for the Social Policy Bank system to be submitted to the Prime Minister for approval in the second quarter of 2004; based on which, allocate funds in the annual construction plan to implement. Central budget investment funds shall prioritize the most difficult areas.

c) The Ministry of Finance shall direct provincial people's committees to urgently review all office buildings of administrative agencies, public institutions, and state-owned enterprises (including those of central and local levels within the area) that have been reorganized, merged, dissolved...; recover excess office buildings, not allowing them to be used for business, leasing, guesthouses, etc., contrary to government regulations, but instead prioritizing their transfer to the Social Policy Bank as office premises.

d) For provinces and districts allocating local budgets to construct office buildings for branches and transaction offices of the Social Policy Bank within their jurisdiction, they must follow a unified design model of the Social Policy Bank and local planning to avoid waste.

6. Staff of the Social Policy Bank need to promote self-reliance, unity, overcome difficulties, truly become trusted and close friends of poor households and policy beneficiary families, set exemplary examples in thrift even in administrative expenses, purchases, repairs, contributing to enhancing the capacity and effectiveness of the Social Policy Bank's operations.

The Office of the Government is responsible for inspecting, urging the implementation of this Directive, and reporting the results to the Prime Minister./.