According to Mr. Thanh, CEP is an initiative of the Ho Chi Minh City Trade Union organization from more than three decades ago. To date, the organization is serving nearly 300,000 poor worker households to borrow capital with a total outstanding debt of about 5,500 billion VND. In addition to micro-credit activities, CEP also implements many welfare programs such as supporting shelters, scholarships for children of poor workers and other social security activities.
Assessing the Vietnam General Confederation of Labor's approval of the Project on preventing and combating black credit among workers in the period 2023 - 2028 as a very necessary policy, Mr. Thanh said that the program has initially brought positive results through lending activities and providing financial services suitable for workers.
However, besides the advantages in mechanisms, policies and the support of the Trade Union organization, microfinance activities are still facing many difficulties, especially institutional barriers.
According to Mr. Thanh, the biggest obstacle currently is the regulation on the income threshold for borrowers. According to the regulations of the State Bank, workers in urban areas with an income above 9 million VND/month and rural areas with an income above 7 million VND/month will not be eligible for microfinance loans. Income is calculated on total income, including salary, allowances and overtime pay.
In fact, in Ho Chi Minh City, the income level of 9 million VND/month no longer reflects the living conditions of workers. Most workers today have incomes exceeding this threshold, but life is still very difficult. This regulation makes many workers with real needs unable to access support capital," Mr. Thanh stated the reality.
He also said that since the new regulations were issued, the scale of CEP's operations has gradually been narrowed due to a significant decrease in the number of eligible borrowers.
In addition, loan procedures are still quite complicated. Workers must prove their average income for 12 consecutive months; in many cases, they also have to notarize authorization documents. These procedures are costly and time-consuming, especially for workers working at foreign-invested enterprises.
Another inadequacy mentioned by Mr. Thanh is the regulation related to civil servants and public employees. Although the new regulation has reopened the borrowing objects for this group, it still requires meeting the condition of income below the prescribed threshold. Meanwhile, most civil servants, public employees, teachers, medical staff or armed forces have income exceeding this threshold, so in reality it is very difficult to access capital sources.
From practical operations, the CEP Chairman proposed that the Vietnam General Confederation of Labor continue to pay attention and coordinate with state management agencies to study and adjust regulations related to loan conditions, income criteria and administrative procedures, thereby creating conditions for many union members and workers to access official capital sources, contributing to limiting black credit and improving the effectiveness of microfinance programs in the Trade Union system.
