Ho Chi Minh City (AsiaNews) – The recent decision by the government to provide loans to poor students to pay for their university education was warmly welcomed by both students and their families but the bank in charge of making the loans is still waiting for the money.
Two weeks ago the semi-official Vietnam News reported that Deputy Prime Minister Nguyễn Sinh Hùng signed a directive that would enable poor university and college students to borrow up to VND 800,000 (US$ 50) a month with 0.5 per cent monthly interest.
However, the number of students who need government help to fund their studies is so high that the Bank for Social Policies is not sure whether it can provide loans to all 287,000 potential applications for the current academic year.
Compounding the problem, an additional 100,000 students borrowed money from the bank under a previous policy, which allowed them to take out loans worth VND 300,000 (US$ 18) a month. Now they might apply for the higher loan limit of VND 800,000.
What is more, the bank has complained that some students have failed to pay back their debt after completing their studies.
For this reason the Bank has asked the Ministries of Finance, Planning and Investment to provide the financial resources to lend to students, estimated at some VND4 trillion (US$ 250 million) to provide soft loans for the 2007-2008 academic year.
The bank also plans to apply stricter rules and grant loans only to students whose parents can somehow act as guarantors.