The Transformative Impact of Preferential Credit in Tam Hai Commune, Da Nang: Part 1: Bringing Opportunity to Island Households

“Every entrusted dollar represents a direct investment in social welfare and the sustainable development of Da Nang”, said Mr. Ho Ky Minh, Vice Chairman of the Da Nang People's Committee, highlighting the vital role of the Government’s preferential credit programme. The programme's impact is clearly reflected in Tam Hai Commune, where preferential credit has reached island households, creating new opportunities for local people to preserve their traditional livelihoods, develop sustainable income-generating activities, invest in their children's education, and gradually contribute to the commune's socio-economic development. More than a source of financing, preferential credit has become a reliable pillar of support, strengthening people's confidence and fostering inclusive and sustainable growth within the island community.

Preferential credit from VBSP enables households in Tam Hai Commune to purchase fishing equipment, helping them sustain their livelihoods and improve their incomes

Improving Livelihoods in an Island Community

Following the merger of the former Quang Nam Province with Da Nang City, the city's development landscape has expanded significantly, bringing greater responsibilities in poverty reduction, social welfare and improving living standards in rural, mountainous, coastal and island areas. Within this broader context, Tam Hai Commune presents a unique example. Despite its considerable potential for the marine economy, eco-tourism, aquaculture and fisheries, many local households continue to face economic challenges. This has further underscored the vital role of preferential credit in ensuring that government resources reach those who need them most.

In Da Nang, the Government's preferential credit programme continued to play a key role in promoting social welfare and sustainable poverty reduction during the first half of 2026. As of mid-June 2026, total policy credit resources had exceeded VND 16.186 trillion (approximately USD 622.5 million). Loan disbursements reached VND 2.94 trillion (approximately USD 113.1 million), benefiting more than 34,500 poor households and other eligible policy beneficiaries. Outstanding loans totaled over VND 16.138 trillion (approximately USD 620.7 million), serving more than 225,600 active borrowers.

For the people of Tam Hai, these loans have translated into tangible improvements in daily life. Households have been able to purchase fishing gear, invest in offshore fish cages and aquaculture, repair and improve their homes, create jobs and support their children's education. On the island, even a preferential loan of VND 50 million (approximately USD 1,920) or VND 100 million (approximately USD 3,850), when provided at the right time, can create new opportunities for a family's future.

Access to preferential credit enables fishermen to continue making a living from the sea. It helps vulnerable households avoid high-interest informal borrowing while providing parents with greater financial security to support children studying away from home.

One of the programme's greatest strengths lies in its accessibility. Rather than operating through conventional banking channels alone, preferential credit is delivered directly to communities through VBSP's transaction points, entrusted socio-political organizations and Savings and Credit Groups. This extensive grassroots network ensures that loans are delivered promptly, accurately and in line with local needs, while also strengthening transparency and loan supervision. As a result, preferential credit generates lasting economic benefits and contributes significantly to sustainable poverty reduction in Tam Hai Commune and across Da Nang City.

According to Mr. Ho Ky Minh, Standing Vice Chairman of the Da Nang People's Committee, this is precisely why the city has substantially increased the amount of local budget entrusted to VBSP for policy lending. During the 2026-2030 period, Da Nang plans to entrust approximately VND 2.5 trillion (around USD 96.2 million) to VBSP - equivalent to at least VND 500 billion (approximately USD 19.2 million) each year - while continuing to allocate additional resources for several locally tailored preferential credit programmes.

Over the past decade, the city's entrusted capital for the Employment Generation Programme has reached VND 3.2 trillion (approximately USD 123.1 million), accounting for 78% of all locally entrusted policy credit. These resources have directly created, maintained or expanded employment opportunities for more than 136,000 workers, including many in Tam Hai Commune. The programme has become an important driver supporting Da Nang's goal of creating more than 35,000 new jobs annually by 2030.

A Quiet Bridge Bringing Government Policies Closer to the People

Mr. Nguyen Huu Khoa (right), Head of the Savings and Credit Group, visits a VBSP borrower to discuss the household's use of preferential credit and livelihood development

For more than a decade, Mr. Nguyen Huu Khoa has served as the Head of a VBSP Savings and Credit Group in Tam Hai Commune. Looking back on his years of service, he says he will continue in the role for as long as his health allows - or until VBSP decides it is time for a younger generation to take over.

To him, the role is far more than a voluntary community responsibility. It is an opportunity to help poor and near-poor households, policy beneficiary families and other disadvantaged groups gain access to preferential credit while contributing to a stronger sense of solidarity and social inclusion within the community.

The Savings and Credit Group currently has 44 members, with total outstanding loans exceeding VND 3 billion (approximately USD 115,000). Most borrowers use the loans to support fisheries-related livelihoods, including aquaculture, fishing logistics, the purchase of fishing vessels and equipment, floating fish cages, or to finance their children's education.

According to Mr. Khoa, before policy credit became widely available, many households had little choice but to rely on informal lenders charging exceptionally high interest rates. Even relatively small loans often placed a heavy financial burden on fishing families whose incomes depend largely on seasonal harvests. "Since VBSP's preferential credit became available, local people have had access to an official source of financing with affordable interest rates and procedures that are both simple and convenient", he said.

The responsibilities of a Savings and Credit Group leader extend well beyond assisting borrowers with loan applications. Group leaders also help explain lending policies, encourage eligible households to participate, monitor loan utilization and provide guidance after loan disbursement.

Whether during village meetings, farmers' association gatherings or everyday conversations with local residents, Mr. Khoa consistently encourages households in need of production capital to seek preferential credit instead of turning to high-interest informal loans.

His work illustrates why the Savings and Credit Group network has become one of the defining strengths of VBSP's lending model. Effective policy implementation depends not only on financial resources, but also on trusted community representatives who understand local needs and help ensure that loans reach the right beneficiaries and are used for their intended purposes.

From the local government's perspective, Mr. Ho Tung Chinh, Vice Chairman of the Viet Nam Fatherland Front Committee and Chairman of the Tam Hai Commune Farmers' Union, believes preferential credit has become an important driver of local development. "Since gaining access to VBSP loans, many households have significantly improved their livelihoods. Borrowers have invested in livestock production, aquaculture, offshore fishing, fishing equipment and other productive assets, enabling them to gradually improve their incomes and living standards", he said.

The Tam Hai Commune Farmers' Union currently manages more than VND 35 billion (approximately USD 1.35 million) in entrusted policy loans, benefiting 468 borrowing households. All loans are approved through a transparent community-based appraisal process to ensure that funding reaches the right beneficiaries according to their actual needs.

Following loan disbursement, the Farmers' Union works closely with VBSP to conduct regular monitoring visits, including mandatory inspections approximately 30 days after disbursement, to ensure that loans are invested in genuine production and business activities. This close supervision has contributed to high repayment rates, timely interest payments and regular savings deposits, providing a solid foundation for the continued expansion of policy credit while maintaining portfolio quality and financial sustainability.

Tam Hai is being developed as a distinctive marine eco-tourism destination in the Da Nang region. Yet sustainable development cannot rely solely on large-scale investment projects. It must begin with the livelihoods of individual households.

People need access to affordable capital to invest in productive activities, stable occupations that allow them to remain connected to the sea, reliable incomes to improve their quality of life, opportunities to educate their children, and confidence to contribute to the long-term development of their community.

Through its preferential credit programme, VBSP continues to quietly support that journey - one household, one livelihood and one opportunity at a time.

Binh Nhi