Loans for poor students

The Prime Minister has issued a decision to provide special credit loans worth VND800,000 per month with an interest rate of 0.5 percent for poor pupils and students with a view to helping them cover their school fees and living costs.

At present, the Ministry of Finance has given specific instructions on implementing the decision. A Voice of Vietnam Radio reporter recently interviewed Pham Phan Dung, Head of the Department for Finance, Banking and Credit Organisation under the Ministry of Finance.

Reporter: Could you elaborate on the most prominent points of the PM’s decision to provide credit loans for poor pupils and students and what are the criteria for the loans?

Mr Dung: The decision has expanded the loans criteria compared to Decision No 107 issued in 2006, which includes pupils and students facing learning difficulties due to natural disasters, epidemics, droughts or the failure of crops. In addition, the criteria also cover trainees from vocational training centres with a studying period of less than one year instead of the previous learning period of one year or more for university and junior college students and intermediate or primary level pupils.

The PM has decided to raise the amount of loans from VND300,000 to VND800,000 per month and reduce the interest rate to 0.5 percent, equivalent to 6 percent per year.

Reporter: What are the procedures for poor pupils and students to access loans from the Bank for Social Policy of Vietnam?

Mr Dung: For those who reside with their parents, they can ask their parents to borrow from the banks and transmit the money to them. However, orphaned students can take out loans directly from the school.

Reporter: Providing loans for pupils has put forth many issues related to the possibility of paying debts and taking back capital. What measures should be taken to get capital back when their academic period ends?

Mr Dung: This is a problematic issue as many pupils and students did not clear off debts in time after their graduation, causing difficulties for banks to re-create capital sources. Therefore, the Bank for Social Policy of Vietnam has proposed that the loans should be changed into household-related loans so that parents and families are responsible for paying the debt.

During four years of studying, pupils and students will not have to clear their debt but they must do that after finding jobs. However, the period of grace is just one year, requiring them to find employment quickly to make certain social contributions. The period of debt repayment is equivalent to their studying period.

Reporter: Thank you very much.

(Source: VOV)