Less than 7% of the students who have gotten school loans from the Bank for Social Purposes come from vocational schools, a very modest figure.

The students who have accessed the credit programme come from different universities and different training branches. However, it has been found that there is a big discrepancy in the loans going to different training branches.

According to Nguyen Van Ly, Deputy General Director of the Bank for Social Purposes, the most loans have gone to students of universities and junior colleges: VND6,949bil have been given to 883,000 students, or 70% of the students who have taken out loans.

Students of intermediate schools (2-year training courses) have borrowed VND2,200bil (302,000 students, 23.7%); and only 6.7% of the students are from vocational schools. The total outstanding loans of the two groups remain modest, at VND593bil.

“The reasons remain unclear. Students in vocational schools prove to have the most difficulties,” Ly said.

He added that his bank will join forces with relevant ministries to find out the exact reasons behind this.

Meanwhile, according to the General Department of Vocational Training, the thought that they would be unable to find a job to get money to pay debts to the bank has made students hesitate to ask for loans.

“We think that we need to give loans to students after they graduate vocational schools, instead of giving loans when they are studying, so that the graduates can have capital to start a business,” said a representative of the general department.

Other problems

A lot of other problems have also been found in school loans. Inspections in 9,000 of 10,000 communes which had students borrowing money showed that 247 households used the loans for the wrong purposes. Meanwhile, 4,142 households (0.35%) got loans though they were ineligible for the programme.

The Bank for Social Purposes has halted disbursement to these subjects and reclaimed capital from the households using capital for wrong purposes.

Ly from the bank, affirming that students will not meet any difficulties in getting loans, said that VND8,000bil is ready for students in 2009, of which VND4tril will be given in the second semester of the 2008-2009 school year.

Every student can borrow VND800,000 a month at the interest rate of 0.5% per month, or 6% per annum. “We believe that the interest rate is affordable for students and their families, and that it will not burden them,” Ly said.

VietNamNet/Lao dong