Fearing inability to pay, poor people don’t ask for construction loans

Despite living in dilapidated houses in the Mekong delta province of Long An, many poor households don’t want to ask for the government’s construction loans to renovate their houses because they fretted that they would fail to repay when they can’t make money.

A poor resident in Long An Province live in dilapidated house but she doesn't want to ask for construction loan for Fear not being able to repay loans (Photo: SGGP)

A poor resident in Long An Province live in dilapidated house but she doesn't want to ask for construction loan for Fear not being able to repay loans (Photo: SGGP)

For instance, resident Le Thi Dieu in Go Chuoi Village of Tan Hung District certified as poor-line household lives in a house in poor repair which was built 20 years ago.
However, she dares not to borrow loan for renovate the house because her monthly income can’t cover the re-payment.
Meanwhile, elderly Nguyen Van Rang in Cay Me village said that he and the wife are so old and often sick that they can’t earn any money to repay the loan.
Chairman of the People’s Committee in Hung Dien Commune Truong Dong Ho said that after knowing the government’s decision to give construction loan for low-income households, inhabitants were delighted but implementation of the decision bumped into difficulties.
On one side, according to the decision, each house is entitled to ask for VND25 million ($1,076) loan but people have to build a house with strong base, strong wall and strong roof. The amount of VND25 million is too small to ensure three “strong factors”
On the other side, poor and near-poor borrowers are unable to have a big money of VND25 million reciprocal capital as per the regulation. Accordingly, of 55 poor and near-poor households in the commune, only one family asked for the loan.
Not only poor people in Long An but residents in some other localities refused to borrow construction loan.
According to the Department of Construction in Long An, around 1,632 homeowners in the province need funding to renovate their house. Nearly 900 households didn’t want to borrow loan for fear not being able to repay loans.
Hence, from 2016 to date, Long An province has disbursed just VND4.5 billion for 180 households whereas disbursement must be done for over 800 households in 2018, according to the plan.
Deputy Director of the provincial Department of Construction Dang Thi Thuy Ha said that the Department will work with local administrators to check locals’ need and with the Social Policy Bank to disburse soon for those who have need.
Furthermore, the Department will petition the Ministry of Construction to finance them more in addition to the amount of VND25 million in order help them to have enough for building new or repairing houses fully.

By KIEN VAN - Translated by DANG MINH

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