From loans to women’s economic empowerment

From loans to women’s economic empowerment

Policy credit is expanding women’s access to finance, from starting businesses and developing production to creating jobs, thereby enabling women to become more economically independent and take greater control of their livelihoods and incomes.

Expanding economic opportunities

In Danang, policy credit is being used by many women to start or expand their production and business activities. Doan Ngoc Chung, director of the Danang Branch of the Vietnam Bank for Social Policies (VBSP), said that in 2025, the Danang Branch of VBSP disbursed loans through the Vietnam Women’s Union to 26,774 customers, with total disbursements of $78.72 million. In the first eight months, the corresponding figures were 16,369 customers and $56.52 million.

Danang is one example of a broader flow of policy credit being deployed nationwide. According to VBSP data, as of June 30, outstanding policy credit managed in coordination with socio-political organisations reached $17.88 billion, accounting for 98.39 per cent of the bank’s total outstanding loans.

Outstanding loans managed through the Vietnam Women’s Union alone reached $6.69 billion, an increase of $552.04 million from the end of 2025 and accounting for 37.40 per cent of total entrusted outstanding loans. The union manages 59,770 Savings and Credit Groups, serving nearly 2.5 million customers.

This scale shows that women are among the major beneficiaries of policy credit, with demand for financing coming not only from those who already operate production or business establishments, but also from those seeking to establish new livelihoods.

Depending on the specific programme and eligibility requirements, women can access financing for poor households, near-poor households, households that have recently escaped poverty, as well as programmes supporting job creation, job retention and expansion, alongside various other policy credit programmes.

For a woman starting a business, a loan may be used to purchase breeding stock, invest in livestock facilities, purchase inventory, or supplement working capital. For those who already have an established business model, financing can help expand its scale and generate additional income.

“The effectiveness of the capital must first stem from the borrower’s own capacity and the actual conditions of the family. A good business plan does not necessarily have to involve a large-scale model,” Chung said. “For many households, a small production facility, a small shop, a herd of livestock, a suitable production model, or a service business with stable demand can all generate significant income. What matters is that the loan is used for its intended purpose, in line with the planned business model, and has the capacity to generate income for debt repayment.”

Policy credit is expanding women’s access to finance. Photo: VBSP

More than just a loan

For a production or business model to operate effectively, borrowers need to understand how they will use the funds, who will buy their products, and how cash flow will be generated and recycled. This is why policy credit is organised in close coordination with local authorities and entrusted socio-political organisations.

At the grassroots level, these organisations work together to communicate policy information, provide guidance, assess loan applications, conduct monitoring and accompany borrowers throughout the lending process.

The Vietnam Women’s Union plays an important role in bringing financing closer to its members. The network of Savings and Credit Groups provides an additional community-level channel through which borrowers can exchange experience, maintain savings and jointly monitor the use of funds. As of June 30, the four entrusted socio-political organisations were managing 165,185 Savings and Credit Groups, of which 87.72 per cent were rated Good.

For women, this support is particularly meaningful because many loans are directly linked to household economic activities. A small shop, livestock model, production facility or service business can be established with a relatively modest amount of capital. Once a stable income is generated, women gain greater financial resources and a stronger degree of economic independence within their households.

However, for these efforts to go further, capital needs to be embedded within a broader support ecosystem.

“Alongside access to capital, borrowers also need support in production knowledge, management, sales skills, technology adoption and market linkages. This is also an area where the Vietnam Women’s Union and other socio-political organisations can play a very effective role,” Chung said.

From a nationwide perspective, the nearly $6.7 in outstanding loans managed through the Vietnam Women’s Union, serving nearly 2.5 million customers through 59,770 Savings and Credit Groups, demonstrates how policy credit is becoming increasingly closely connected with women’s economic activities and livelihoods.

The value of this capital therefore lies not only in the amount of money reaching borrowers, but also in its ability to support sustainable economic activities, turning a small-scale model into a stable source of income, and enabling women who contribute to their household economies to become creators of additional employment for others.

VIR