Microfinance in Vietnam

Microfinance in Vietnam

MicroFinance in Vietnam – 3 Case Studies by Ruth Putzeys

“Credit is not regarded as an input but rather as an engine for growth”, writes Ruth Putzeys in the introduction to her thesis which examines three microfinance projects in Vietnam funded by Belgium in 1998.

There is Nothing New Under the Sun

Current microfinancial strategies are based on traditional and communal systems from centuries ago. These systems emphasized trust, non-collateral loans among peers and reliability in repayment. In modern times, international donor organizations and NGOs see microfinance as a possibility to alleviate poverty in impoverished areas. The objective of providing access to credit for the poor is to create new businesses, improved incomes and better living standards whilst encouraging people to become active participants in the economy, rather than passive dependents.

State Supported Microfinance

According to Putzeys’ study, which was written in 2002, one country whose government appreciates the importance of microfinance for the alleviation of poverty is Vietnam. There the state went so far as to form a bank dedicated to providing credit to the poor. This initiative is an expression of the government’s belief that all people, including those of the lowest socio-economic position, should have equal access to credit. In addition to Vietnamese state activities described in this paper, Putzeys also lists numerous NGOs that were present in Vietnam for many years, as well as major governmental donors that vigorously promoted microfinancial activities.

From Belgium to Vietnam

The main focus of this research is the special microfinancial relationship forged between Vietnam and Belgium, where microfinance is also considered a key tool in the strategic attempt to deal with impoverishment. In 1998, as part of a conference held in Hanoi, the Belgian Administration for Development Cooperation (BADC) and the Vietnam Women’s Union discussed ‘Projects with a Credit Component in South-East Asia’. This was a great opportunity for those active in the field of co-operative development projects in the region to assess their experiences and learn from one another. Of the many projects represented at the conference, including the majority of those supported by Belgium, Ruth Putzeys selected three to provide case studies for an in-depth assessment of microfinance in Vietnam:
– The Vietnamese-Belgian Credit Project (VBCP)
– The Participatory Watershed Management in Hoanh Bo District, Quan Ninh Province (FAO)
– The Development of Diary Support Activities in Southern Vietnam (the Diary project)

The case studies are all based on field work, visits and interviews with project staff and beneficiaries, primary resources and project documentation like activity report, written evaluations, etc.

While some may think this study is out dated, the fact that it was written more than a decade ago actually makes it a very interesting read today in 2016. It remains relevant, provides an interesting perspective and sheds light on microfinancial issues and developments in the field.
Microfinance case study viatnam

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Posted on

December 18, 2016

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