Legal issues on bank credit and social security policy housing programs

VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF LAW NGUYỄN THU HUYỀN NGÂN LEGAL ISSUES ON BANK CREDIT AND SOCIAL SECURITY POLICY: HOUSING PROGRAMS GRADUATION PAPER MAJOR: BUSINESS LAW Hệ

VIETNAM NATIONAL UNIVERSITY, HANOI

SCHOOL OF LAW

NGUYỄN THU HUYỀN NGÂN

LEGAL ISSUES ON BANK CREDIT AND SOCIAL SECURITY POLICY: HOUSING PROGRAMS

GRADUATION PAPER MAJOR: BUSINESS LAW

Hệ đào tạo: Chính quy Khóa học: QH – 2013 LKD

Supervisor: ThS Khuất Quang Phát

Hà Nội, 2017

CONTENTS

Introduction 4

Chapter 1 12

GENERAL THEORETICAL ISSUES ON CREDIT AND SOCIAL SECURITY POLICY ON HOUSING PROGRAMS FOR THE POOR 12 1.1 Definition of Social Security 12

1.1.1 International Definition 12

1.1.2 National Definition 13

1.2 Definition of Bank Credit 17

1.2.1 The definition of Bank Credit 17

1.2.2 Bank Credit’s Features 19

1.2.3 Bank Credit’s classification 20

1.2.4 Features of the lending activity 21

1.3 Relationship between Bank Credit and Social Security Policy 21 Chapter 2 26

PRACTICAL EXPERIENCES 26

2.1 Legal Content on Housing for the poor 26

2.1.1 Preferential housing policies 26

2.1.2 Preference loans for purchase, lease, lease-purchase of social houses; New construction or renovation or repair of houses for accommodation 30

2.1.3 Borrowing investment capital for the construction of social houses 32 2.1.4 Procedures for purchase, rent, rent-purchase social house 33 2.2 Social Security Policy in Vietnam – Actual state 39

2.2.1 Inadequation in supply and demand 40

2.2.2 Inadequation in legal provisions and policy 40

2.2.3 Law’s Violations 43

2.2.4 Others 44

2.3 Reasons for difficulties and inadequation 45

2.3.1 Objective reasons 46

2.3.2 Subjectives Reasons 46

Chapter 3 49

RESOLUTIONS TO IMPROVE CREDIT AND SOCIAL SECURITY POLICY 49

ON HOUSING PROGRAMS FOR THE POOR 49

3.1 Orientation to complete the law: 49

3.2 Policy recommendations: 50

CONCLUSION 52

REFERENCES 53

Legal Issues on Bank Credit and Social Security Policy:

Housing programs

INTRODUCTION

1 The urgency of the subject:

Economic security is a universal human problem, encompassing the ways in which an individual or a family provides for some assurance of income when an individual is either too old or too disabled to work, when a family breadwinner dies, or when a

worker faces involuntary unemployment (in more modern times)

All societies throughout human history have had to come to terms with this problem in some way The various strategies for addressing this problem rely on a mix of individual and collective efforts Some strategies are mostly individual (such as accruing savings and investments); others are more collective (such as relying

on help from family, fraternal organizations and unions, religious groups, charities, and social welfare programs); and some strategies are a mix of both (such as the use of various forms of insurance to reduce economic risk)

Social insurance provides a method for addressing the problem

of economic security in the context of modern industrial societies The concept of social insurance is that individuals contribute to a central fund managed by governments, and this fund is then used to provide income to individuals when they become unable to support themselves through their own labors The need for social insurance became manifest with the coming of the Industrial Revolution All peoples throughout all of human history have faced the uncertainties brought on by enemployment, illness, disability, death and old age

In the realm of economics, these inevitable facets of life are said to

be threats to one’s economic security.To support all humanity in the time of need, Social Security was invented

For the time being, Social Security system in Vietnam is playing a more important role in the development and stabilization of the economic and society The distribution of Social Security is the distribution in a more benefit way for the low-income individuals Social Security contributes to reduce the gap between the rich and the poor, guarantee the equity in society

Social Security is one of the social policy that needs the Government to pay attention to and to promote for the development

of human races, improvement of life’s quality The Government is cordinating the Credit policy and Social Security policy to giving a hand to the individuals living in low-income and poverty

2 Research situation of the subject:

Housing programs for the poor with the affection of Credit and Social Security Policy is now a hot topic of many developed countries In Vietnam, this is a topic of national interest and is getting really urgent Therefore, beside many relating decrees and regulations, there begins to have more researchs and studies on this subject, included: books, dissertations, journals on specialized magazines Below are some of the books and subject related to this study:

 International Researchs:

“Guidelines on social housing: Principles and examples”

by United Nations, published in 2006 “The builders: Houses, people, neighborhoods, governments, money” by Martin Mayer, published in 1978

 Local Researchs:

“Commercial Housing Development Policy in Ho Chi Minh city: Theory and Practice” edited by Duong Thi Binh Minh and other authors; “Resolution for Capital for building and developing urban housing in Vietnam nowadays”, Nguyen Khac Tra, 2009, PhD Thesis on Economics Science, Finance – Accountant Academy;

“Social Housing, experiences from developed countries”, Vietnam Construction Review; “Social Housing for low income individuals in urban areas”, by Le Quan, 2011, Architectual Planning Magazine, Hanoi Architectural University; LL.M Le Thi Hoai Thu, School of Law, Vietnam National University, Social Security Law in Vietnam – Current Situation and Some Recommendations, Social Insurance Journal No 6 / 2004

There have been many studies, researchs and policies that involved housing for the poor both domestically and internationally Among them, most of the problems are about investment on real estate concerning Social Security and Housing programs for Low-

- Responsibility for the maintenance of children (family benefit)

- The treatment of any morbid condition (including pregnancy), whatever its cause (medical care);

- A suspension of earnings due to an inability to obtain suitable employment for protected persons who are capable of, and available for, work (unemployment benefits);

- A suspension of earnings due to an incapacity for work resulting from a morbid condition (sickness leave benefit);

- A permanent or persistent inability to engage in any gainful activity (disability benefits);

- The costs and losses involved in medical care, sickness leave, invalidity and death of the breadwinner due to

an occupational accident or disease (employment injuries) These are the sectors of social security in some nations The ILO has also identified different funding approaches by which social security benefits are provided These include social insurance, social assistance, employer mandates and demogrand or social allowance schemes (International Labour Office, 1958)

Social Insurance is an occupationally based approach which is funded by the regular contributions paid by workers and employers

On the other hand, social assistance pays benefits from general revenues Its distinctive feature is the income or means test, which is used to determine eligibility Employer liability schemes are based

on statutes that require employers to provide benefits to employees who encounter specific contigencies Finally, demogrant schemes or social allowances pay benefits from general revenues to all who meet specified contingencies without any consideration of income They cover all persons who fall into a designated population and contingency group

There also have been some researchs on housing concerned credit policy One of them is “Housing programs for Low-Income Households” by Edgar O Olsen

Meanwhile, the world has cared much about the Social Security policy and how other investments can affect that The investors usually only cares about profits and benefits that they can enjoy from their investment but not about the affection it can develop toward the surroundings, which is the society, human, and also environment The credit policy is an effective way to diminish those bad affection

 Domestical:

In our country, the problems of Social Security have been mentioned for a long time The spirit for community life has been shown since ancient time through many idioms and proverbs Nowadays, Social Security is still one of the top concerned issues in the policy of the Party, the Government and Society

As can be seen from Resolution No 80, Decision No 852 and

Acts of the Party about Social Security, the researchs on developing

and completing the system of Social Security Policy in Vietnam have become more and more important As a result, series of policies and legal documents on Social Security have been published

The structure of Social Security in Vietnam is different from

other countries, consists of: 1 Social Insurance 2 Health Insurance

3 Unemployment Insurance 4 Social Relief 5 Social Assistance and Incentives Comparing with other models of systems in the world,

our Social Security system has a particular part, which is the Social Incentives This policy aims to offset, reward the sacrifice and the credit of people who had done great things in the Revolution and had worked hard for the country

The Government has published many legal documents on Social Security and other pratical Social Security Policies that point to the Poor Especially, there are many credit policies on housing that navigate toward Social Security For example, if the investors invest

on social housing, there will be preferential treament by Article 58 in

Law on Housing 2014 (paragraph 1 point c: “Concessional loans

granted by a bank for social policies or a credit institution operating

in Vietnam; preferential loans regarding the social housing construction for lease with lower interest rate and longer terms in loan agreement than the social housing construction for lease

purchase or sale;”) Likewise, in article 49 paragraph 2 and 4, the

Government will have incentive policies on social housing with households living in poverty or near poverty in rural areas and individuals living in low income, poverty or near poverty in the urban areas Moreover, the policies on housing support shall be carried out as support in preferential loans provided by banks for social policies, which is a credit policy of the Government

The Government in Vietnam has also deployed the Preferential Loans VND 30,000 billion supporting individuals living in low income or poverty for social housing

Through all the information and relating documents, it can be clearly seen that housing programs for the poor is having the attention of all society However, we haven’t paid enough attention

to the legal issues on Credit and Social Security Policy side Therefore, despite many documents, researchs, studies, journals, there still be much that need complete and adjust

3 Purposes and missions of the study:

 Purposes of the study:

By analysing the regulations of Vietnam and theories from other developed country about credit and social securities policy on housing programs for the poor, and by appraising the practical application of the regulations, the author would propose the regulations’ weaknesses and difficulties, concurrently propose the

resolutions to improve the law, overcome the entanglements and difficulties in the process of performing the policy

 Missions of the study:

First, generalize and analyze the general theoretical issues about the relationship between Social Security and Credit policy and their impact on housing programs for the poor

Second, systemalize and analyze the current regulations on credit and social security relating to housing programs for the poor Third, analyze and asses how the regulations are being performed currently

Finally, propose certain resolutions to improve the law and the policy

4 Object and scope of the study:

 Object of the study: the study concentrates onthe

regulations of Vietnam and theories formed in developed countries that adjust credit and social security policy on housing programs for the poor and pratical application of these regulations and theories

 Scope of the study: the study concentrates on clarifying the

legal issues and regulations in Vietnam that adjust the credit and social security policy on housing programs for the poor, as well as the theories provided by other developed countries on this matter, not

on researching the whole legal issues on credit and social security policy

5 Research methods and Methodology:

 Methodology: the study is operated based on the

methodology of dialectical materialism and historical materialism

 Some specific research methods: the study use some

specific research methods, including: methods of analysis, synthesis, generalization, interpretive and inductive methods; comparative,

statistical, survey, evaluation and collation methods; modeling and systematizing…

6 The study’s contributions, theoretical and pratical significances:

 Theoretical significaces: The study clarifies the general

theoretical issues on the credit and social security policy and their relationship on housing programs for the poor, such as: the conceptions, the terms of credit, social security and housing programs

 Pratical significances: the study will provide knowledge

about the relationship between credit and social security policy on housing programs for the poor, as well as contribute the referential value on researching and improving the law on such subject Also, the study could be the documents for other students having exigency for acknowledging the law on credit and social security

7 Structure of the study:

Beside other usual parts: Introduction, conclusion and list of references, the study includes: three chapters, verses, specifically:

Chapter 1: General Theoretical Issues on Credit and Social

Security Policy on Housing Programs for the poor

Chapter 2: Pratical experiences

Chapter 3: Resolutions to improve credit and social security

policy on housing programs for the poor

Chapter 1

GENERAL THEORETICAL ISSUES ON CREDIT AND

SOCIAL SECURITY POLICY ON HOUSING

PROGRAMS FOR THE POOR

1.1 Definition of Social Security:

1.1.1 International Definition:

While several of the provisions to which the concept refers have

a long history (especially in poor relief), the notion of "social security" itself is a fairly recent one The earliest example of use date from 19th century

In a speech to mark the independence of Venezuela, Simón Bolívar (1819) pronounced: "El sistema de gobierno más perfecto es aquel que produce mayor suma de felicidad posible, mayor suma

de seguridad social y mayor suma de estabilidad política"(which

translates to "The most perfect system of government is that which produces the greatest amount of happiness, the greatest amount of social security and the greatest amount of political stability")

It was predominantly in the late 19th and 20th centuries that an organized system of state welfare provision was introduced in many countries Otto von Bismarck, Chacellor of Germany, introduced one

of the first welfare systems for the working classes in 1883, called Bismarck System” with a series of social policies Bismarck introduced legislation that resulted in the now famous Health Insurance Act of 1883, making Germany the first country in Europe

to offer compulsory social health insurance In Great Britain, the liberal government of Henry Campbell – Bannerman and David

Lloyd George introduced the National Insurance system in 1911, a system later expanded by Clement Attlee

However, the legal concept of Social Security first enshrined in Article 22 of the Universal Declaration of Human Rights “Everyone,

as a member of society, has the right to social security” This provision on principles of human rights makes clear that social security rights are enshrined in the membership within a given society Social security is – in other words- embedded in and determined to ensure social inclusion The formal and official definition of social security is given by ILO Convention No 102, concluded on 28th June 1952 at the Geneva International Labour Conference In this instrument social security is charaterised by benefits of nine different branches, i.e medical care and income replacement in the cases of sickness, unemployment, old age, employment injury and occupational diseases, family charges, maternity, invalidity and widowhood and the status of orphan

In simple terms, the signatories agree that society in which a person lives should help them to develop and to make the most of all the advantages (culture, work, social welfare) which are offered to them in the country

Social Security may also refer to the action of a program operated by the government that provides financial support for elderly, disabled, and retired persons It is the action of guaranteeing access to sufficient resources for food and shelter and to promote health and well-being for the polulation at large and potentially vulnerable segments

1.1.2 National Definition :

In Vietnam, there are some researchs having been made to clarify the definition of Social Security Among them we can

mention: some journals written by Dr Mac Tien Anh on Social Insurance Magazine No.1/2015, No 2/2015 and No 4/2015, as well

as the journal “About the term Social Security” written by Chief of Legal Department, Mr Dang Duc San (Ministry of Labour – Invalids and Social Affairs) All of them have clarified that “Social security, above all, is the protection of society for its citizens, which

is performed by public measures The aim of this protection is to help the members of society with their incidents and social risks which lead to the reduction or the loss of their income.”

Also, according to Mr Dang Duc San, Social Security in Vietnam can be divided into three section Firstly, the regimes of social welfare includes: compulsory social insurance and voluntary social insurance Secondly, the regimes of social assistance consist of: social relief for objects being in extremely difficult circumstances due to risks in life Thirdly, other social programs combine poverty reduction programs, medical programs, provident fund and other types of insurance

Those three section create the Social Security system in our country However, each group of regimes has its own feature and range of impact Nowadays, our government still considers Social Insurance the main section that need develop and have less aware of other sections

Thus, from both of the international and national definition, it can be concluded that the profound nature of Social Security is to contribute to guarantee the income and the life of the citizens in our society, perfomed by public measures, creating “security” to all members of society Therefore, Social Security is profoundly sociality and humane The nature of Social Security can be clearly seen by the following aspects:

1.1.2.1 Social Security is a clear manifestation of human rights, recognized by United Nation (UN):

Modern Social Security is not just a simple mechanism to replace income but it has become those mixed vectors of what called

“social transfer” Those mixed vectors are, in fact, tools and methods

of redistributing money, wealth, social services that favor the “more vulnerable” groups in the social community

1.1.2.2 Social Security expresses lofty humanism

Social Security provides the unfortunate ones and the unlucky ones with opportunities to adapt to the society, to overcome the risks and upheavals in their life, thus, creates the chances to improve their life Social Security rouse the social activeness in each individual, no matter how rich or poor, lucky or unlucky he is Social security even creates friendliness, solidarity among people and expresses no discrimination

1.1.2.3 Social Security expresses the tradition of solidarity, mutual help and mutual love of the community

Social Security performs a part of the justice and the improvement of society and is an indispensable object in society

1.1.2.3.1 It performs society’s justice:

Social Security is a method to improve life’s condition and redistribute the income

The redistribution of the income combines horizontal distribution and vertical distribution

Redistribution in horizontal is the redistribution between the strong and the weak; the employed and the unemployed; the ones without children and the ones with burden of the family In general,

it is the redistribution of the income between the ones in ordinary circumstances and the ones in more difficult circumstances This

redistribution is performed through some methods, such as tax and social security fund These need to have conditions to enjoy

1.1.2.3.2 It expresses the society’s improvement:

Social security meets the need of the citizens, including ones who have less ability It reduces the difficulties for others The economics factors and the social factors always have the impact on each other The social security influences both of them in a good way It doesn’t help to exclude the poverty but to push it back Generally, it fosters a better society

1.1.2.3.3 It is the indispensable object of human’s life:

All societies has its own group of the weak These people have been in the difficult condition to contrive their life or sometimes not

be able to contrive it Also, these people could have been through some upheavals in life and gotten into the disadvantageous position Due to these issues, societies have developed spontaneously or voluntarily self-conscious a mechanism that helps those people to get through with life

That mechanism forms the social security

The difference of the social security between international and national is that the social security in Vietnam developed in the market economics condition under the government’s management with the socialist orientation Moreover, it is performed in an environment of traditional culture Therefore, social security in Vietnam is the combination of all mankind’s definition and the tradition of our people That gives Vietnam’s social security a very different shade that no many countries have However, this combination is not always good and harmonious With the government’s management, some of the social security’s acts might become too administrative or too state-owned, such as social relief

activities or charitable activities Besides, some others might become too “social”, which leads to many abusive behaviours

1.2 Definition of Bank Credit

1.2.1 The definition of Bank Credit:

To understand what Bank credit is, we have to understand what credit is

The term “credit” finds its origin in the Old Italian word

“credito” and, before that, from the Latin word “creditum”, a loan,

from neuter past participle of the verb “credere”, to entrust

In the “Merriam Webster dictionary”, credit is defined as

“something entrusted to another… The provisions of money good or service with the expectation of future payment…”

Wikipedia defines credit as follows:

 “Credit is the provision of resources (such as granting a

loan) by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and instead arranges either to repay or return those resources (or material(s) of equal value) at a later date It is any form of deferred payment The first party

is called a creditor, also known as a lender, while the second party is called a debtor, also known as a borrower.”

 “Movements of financial capital are normally dependent

on either credit or equity transfer Credit is in turn dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds”

Trade credit:

 “The word credit is used in commercial trade in the term

“trade credit” to refer to the approval for delayed payments for purchased goods Credit is sometimes not

granted to a person who has financial instability or difficulty Companies frequently offer credit to their customers as a part of the terms of a purchase agreement Organizations that offer credit to their customers frequently employ a credit manager”

As can be seen by the definition provided by Wikipedia, credit

is the act of supplying resources or products or services, and expecting to be paid at a given date in a near future

Credit is an objective economic category that reflects the transactional relationship between two parties, in which the owner transfers a quantity of value in monetary or property to the other party to use That party is responsible for repayment with a quantity

of value greater than the initial value after a specified period of time Credit combines Bank Credit and Commercial Credit These are different

Bank credit stands for credit extended by banks to borrowers Bank credit is a loan transaction between a bank (the lender) and a customer (the borrower), in which the borrower uses the lender's assets for a period of time that is previously agreed and have to repay unconditionally both the original capital and the interest to the lender when the payment term comes In other words, bank credit is the transference of the right to use Capital from the bank to the customer with a certain cost

Bankers frequently use the term in the plural, meaning advances made to their borrowing customers Whether the borrower withdraws the amount of the proceeds of his loan in cash at once or leaves it on deposit with the lending bank, the loan in either case constitutes credit extended Just as a merchant extends credit to the customer who pays for his purchase at a later time, so the banker extends

credit to the business man who borrows money Whether the money

is taken from the bank at the time the loan is made, the next day, or ten days later, makes no essential difference; bank credit may take even the form of an overdraft The fundamental factors affecting the question of security or safety are essentially the same in mercantile and bank credit The essential difference between bank credit and commercial credit lies in the degree of certainty of payment The banker's percentage of profit is so small in comparison with the profit

of the merchant or manufacturer who extends credit to his customers that the banker is compelled to take greater precaution concerning repayment of a loan than is the business man in regard to payment for wares sold

1.2.2 Bank Credit’s Features :

Here, it is mainly about the Bank Credit, whose nature is a transaction of property based on repayment principles Its features are:

- Transaction in bank credit relationship combines two forms: for loan (by monetary) and for rent (by immovables and movables property);

- The value after repayment is usually greater than the initial value In other words, the borrower have to pay the interest out of the original capital;

- In the bank credit relationship, the loan is granted based on the principle that the borrower pledges to repay unconditionally the lender when the payment term comes

Credit plays an important role in the economics development It helps stabilize the price and currency; widen and develop foreign economics relationship and expand international exchanges

Its function is to mass up and distribute the resources based on the repayment principles; economize the cash and circulation cost; reflect and control economics activities

Bank credit’s principles are: the loan capital have to be repaid

on time with both the initial capital and the interest; the loan capital have to be used effectively and on the right purposes; the loan capital have to be guaranteed to be equal to the value of the equivalent material goods

1.2.3 Bank Credit’s classification :

The classification of Bank Credit is based on certain criteria depending on the customer’s request and the bank’s management objective The following are some major classifications:

Based on credit term

- Short – term liability: a loan with a term of less than one year Its aim is usually to finance investment in mobile assets

- Medium, long – term liability: a loan with a term beyond one year Its aim is to finance investment in immobile assets or investment projects

Based on purposes of the capital’s usage

- Loan for industrial and commerical business production;

- Loan for personal consumption;

- Loan for purchase of real estate;

- Loan for agricultural production;

- Loan for import – export trading

Based on creditworthiness

- Unsecured Loan: loan without collateral or mortages, or guarantees of others, only relies on the credibility of the borrowers to decide on the loan;

- Secured Loan: loan based on loan guarantees such as collateral, mortages or guarantees of others

Based on lending method

- One time loan

- Loan based on Credit limit

Based on repayment method

- One – time repayment at maturity

- Multiple repayment periods, installment loans

- Multiple repayments but no specific repayment schedule, depending on the ability of the customer to pay at any time

1.2.4 Features of the lending activity :

Bank lending acitivity or bank credit generally includes these following features:

Firstly, there are always two subjects in this activity: one is the lender – the bank, who has unused property and has the will to let others use it to satisfy their benefit; and the other is the borrower – individuals, organizations, who are in need of that property, which will satisfy their benefit (in business or for capital)

Secondly, the legal form of the lending activity is presented under the “Credit Contract”

Thirdly, the lending event appears by the lending action and the repayment action

Fourthly, the lending activity is always based on the trust of the lender towards the borrower or the repayment ability of the borrower

1.3 Relationship between Bank Credit and Social Security Policy:

On theoretical aspect, it can be clearly seen that the function of bothBank Credit and Social Security is to redistribute resources

Sometimes these resources can duplicate, specifically stated is the income Both Bank credit and Social Security meets the need of citizens, reduce their difficulties

On practical aspect, as Social Security refers to a program run

by the government, it needs fund to operate Most of the fund in fact comes from the employees’ own money In other word, it can be called as Social Security taxes and the Social Security’s tax is for employees The fact is that when the government sends a Social Security check to an individual, it is not giving him anything; it is paying him back a portion of the money he has saved for his retirement through a special government plan The money belongs to the individual, money owed him, money systematically and forcibly taken from his pay-check as security against a time when he will be too old to work There are other sources of finance that support the Social Security fund, such as ODA grant, non-refundable foreign aid budget; from the Government; from society, from entreprises and organizations; from citizens

The banks not only have contributed a lot of effort in supporting the Social Security fund and policy but also have the obligations to provide credit policy on lending money and operate the Government’s credit policy concerning Social Security These obligations include providing credit for entreprises’ projects concerning social security with lower interest rate; providing credit for poor individual served by the policy of the Government on some specific purposes For example, many banks have run lending at low interest program; sponsored for the Social Security fund; aid programs for fixing the damage after natural calamity, for education, for health service; provided aid for building houses for the poor etc Moreover, many banks have provided credit to support entreprises’

projects on building social house at lower interest or provided capital

to support production and home-buying These all need many proceduresAs a result, the credit policy is one of the problem needed concern from the Government

In the market economy period, houses in Vietnam are still a kind of special distributed goods In the market mechanism, houses are goods, therefore, the price of each house have to be different Housing problems depend on each one’s income and they decide themselves to rent or buy house based on their ability, demand and hobby The government helps the poor to buy house but it is totally different from the distribution in centrally – planned economy Developing housing for low – income individuals demands the government to have a policy to gather all the capital Therein, we cannot ignore the role of intermediary organizations, especially the banks, which means the government needs to concern about the bank credit policy in providing people with capital to solve the financial problems It is necessary to provide those, who are in need of a loan

to purchase a home, with credit This has an important significance for economics and society

 For the customers (workers with low – income):

With the ordinary income from the salary, it will take a real long time for many families to have enough money for housing The impact of the government on the credit policy will help the families and individuals, who has a stable income but not good enough financial condition, to have a house In stead of saving in a long time, each month, they just have to extract part of their income to accumulate for bank’s period – repayment Having a house has a lot

of meaning with the workers With a house, they will feel more

comfortable and be able to concentrate on their work, create wealth for society and to improve the quality of their life

 For the economy:

With that kind of policy, the workers will be satisfied and be at ease, so that they can concentrate on creating wealth for the society they live in This will increase social welfare, therefore, the economy will develop

 For the banks themselves:

Nowadays, loans for real estate account for about one – third of all the loan items and about one – fifth of the property of the commercial bank The biggest type of banks’ loan is exactly loans for building houses, often accounts for about 60% of all loan amount for real estate Therefore, loans for housing is really important with commercial banks particularly and all credit organizations generally Through lending activities, the banks indirectly create relationship with investors and co-operate with housing business and real estate companies This is a good opportunity for the banks to have a diverse network of customers’ information, as well as create more opportunity to attract more customers, who is also those kind

of companies The banks will have a good chance to expand their relationships, increase revenues from transaction activities, improve reputation, create a good image in customers’ eyes

CONCLUSION OF CHAPTER 1 Nowadays, housing for the poor is not a new issue in either developed countries in the world or even in Vietnam However, this matter to depend on the credit policy haven’t been cared much about Therefore, in chapter one, the author of the study has been trying to focus on, analyze, clarify the theory aspect of the issue

First of all, analyze and clarify the definition and features of

“Social Security” Therein, Social security is the protection of society for its citizens, which is performed by public measures The aim of this protection is to help the members of society with their incidents and social risks which lead to the reduction or the loss of their income Therefore, prove how important social security is in life

Secondly, analyze and clarify the definition and features of

“Bank Credit” Accordingly, Bank credit stands for credit extended

by banks to borrowers Bank credit is a loan transaction between a bank (the lender) and a customer (the borrower), in which the borrower uses the lender's assets for a period of time that is previously agreed and have to repay unconditionally both the original capital and the interest to the lender when the payment term comes In other words, bank credit is the transference of the right to use Capital from the bank to the customer with a certain cost And with every features of it, we can come to the final conclusion

Finally, with all the features of Bank credit and Social Security,

we have discovered the relationship of them, especially in the housing issue, as well as, the benefits each individuals, organizations and society received when Bank Credit and Social Security combine together

Chapter 2 PRACTICAL EXPERIENCES

2.1 Legal Content on Housing for the poor:

2.1.1 Preferential housing policies:

2 Households living in poverty or near poverty in rural areas;

3 Households that are often affected by natural disasters or climate changes in rural areas;

4 Individuals living in low income, poverty or near poverty in the urban areas;

5 Employees working in enterprises inside or outside the industrial zones;

6 Commissioned officers, professional and technical commissioned officers, standing army, and workers in the agencies

non-of People’s Police and People’s Army;

7 Officials and civil servants prescribed in law on officials and civil servants;

8 Entities who have returned official residence as prescribed Clause 5 Article 81 of this Law;

9 Students of institutes, universities, colleges, vocational training institutions; students of the public ethnic boarding schools using social housing during their duration of study;

10 Households or individuals subject to land withdrawal and land clearance as prescribed without any compensation in form of housing or residential land paid by the State.”

With the implementation of incentive stipulated in Article 50 of Housing law 2014:

“1 Lease, lease and purchase, or sell the social housing to entities prescribed in Clause 1, 4, 5, 6, 7, 8 and 10 Article 49 of this Law; or only lease the social housing to entity prescribed in Clause 9 Article 49 of this Law

2 Support entities prescribed in Clause 1, 2 and 3 Article 49 of this Law in construction or renovation of housing according to the target programs for housing

3 Allocate residential land with reduction or exemption from land levies or gift housing to the entities prescribed in Clause 1, 2 and 3 Article 49 of this Law as prescribed in law on land or housing gifting

4 Grant preferential loans given by the State for entities prescribed in Clause 1, 4, 5, 6 and 7 Article 49 of this Law though social policy banks or credit institutions appointed by the State to build or renovate their housing.”

Particularly in the case of state-owned social housing, the subjects are specified at Article 52 of Decree 99/2015/NĐ-CP:

“1 The entities specified in Clause 1 Article 50 of the Law on Housing may lease or lease-purchase state-owned social housing Students specified in Clause 9 Article 49 of the Law on Housing may lease social housing during their study period If the quantity of social housing is not sufficient to satisfy all demands, the following order of priority shall apply: students of families that are beneficiaries of preferential policies, poor households, near-poverty