Removing bottlenecks so that the money from the trade union capital fund reaches the right people

Small capital brings great value

The capital support funds of the Trade Union organization are established with the aim of supporting union members and workers in difficult circumstances to create jobs, increase income, improve their lives and limit the need to resort to "black credit".

The report evaluating the operation of loan funds after arranging the trade union organizational structure, organized by the General Confederation of Labor on September 10 in Da Nang city, shows that the total capital source of capital support funds under management reached more than 373.1 billion VND, an increase of 11.8% compared to the period 2020-2024.

The funds have implemented loans for 7,878 union members and workers, including 3,026 female workers. The value of each contract is from 5 million to 50 million VND, the loan term is commonly from 24 to 36 months.

From this capital source, 3,181 new jobs have been created, mainly in the fields of cultivation, animal husbandry, small-scale production and services. The income of borrowers increased by about 1.5 to 3 million VND per month.

For high-income people, this additional amount may not be large. But for a worker family that is balancing each amount of rent, tuition, electricity and water and daily expenses, adding a few million VND per month can help them significantly reduce the pressure of life.

The positive point is that some funds have proactively innovated their operating methods. The Capital Capital Support Fund uses Smart Fund software to manage credit and accounting; deploys applications on mobile devices and integrates QR codes, helping to reduce paper records, shorten processing time and limit errors in money collection and payment.

Can Tho Capital Assistance Fund applies bank's enterprise accounts in cash flow management, disbursement and capital recovery. Thai Nguyen Capital Assistance Fund integrates lending with labor law advice, social insurance, occupational safety and health and related policies.

These are ways to show that the capital support fund not only provides loans, but can also accompany, advise and support workers throughout the capital use process.

Expanding capital sources accompanied by improving management quality

After arranging the organizational structure, the operation of capital support funds is generating new requirements. The management area is expanding, the number of grassroots trade unions and workers in need of service is increasing, but capital and human resources in some places have not been supplemented accordingly.

In Can Tho, Da Nang, Hai Phong, Hue, Quang Ngai and Thai Nguyen, existing capital sources are assessed as not meeting borrowing needs in the coming time. Meanwhile, some funds have a fairly large amount of outstanding capital that has not been disbursed.

Regarding the proposal to supplement capital sources, Dr. Le Thi Thanh Ha - Member of the Standing Committee of the Vietnam General Confederation of Labor, Deputy Head of the Labor Relations Department of the Vietnam General Confederation of Labor, said that supplementing capital for funds is necessary, but should not only focus on increasing the scale of capital sources.

Efficiency must be measured by the ability to bring capital to the right people, the right needs and create substantive changes in life. Each borrowing group needs to have its own evaluation criteria. Production and business loans must be considered through the ability to create jobs and increase income; housing, education, and medical loans need to be assessed by the effectiveness of social security and the ability to help workers stabilize their lives," Ms. Ha said.

Another bottleneck is the regulations on borrowers. The old regulations mainly targeted poor workers, while the number of people meeting the current poverty line is not large. In fact, there is still a large part of workers with income above the poverty line but life is difficult due to increased costs of renting houses, raising children and medical examination and treatment.

Therefore, the loan consideration criteria need to be improved in the direction of assessing the actual circumstances, debt repayment capacity and capital use purpose, instead of just relying on a fixed income level.

According to Ms. Ha, loan procedures also need to be simplified, publicized and digitized. Grassroots trade unions must play a good role in confirming needs, guiding dossiers, and supervising capital use; at the same time, borrowers need to be consulted on money use plans and debt repayment plans.

See the original here