Introduction

World Vision Vietnam (WVV) has micro-credit activities for nearly 10 years as a major component of most of our Area Development Programs (ADPs). Almost each Area Development Program (ADP) is engaged in various forms of credit delivery such as credit in cash, or in-kind. The most common cash credit mechanism is through revolving loan funds managed by WVV’s mass organization partners.

A weak regulatory environment, internal processes and systems in the past, unsustainable operational practices did significantly hamper our ability to serve significant numbers of poor population. World Vision Vietnam’s key stakeholders, encouraged by recent developments in the regulatory environment and results of several program studies and evaluations have agreed to standardize, professionalize and manage MFU as a separate program during consultation meetings held last February and July 2005. There is now a momentum towards transforming MFU separate, sustainable, specialized and significant program.

Operation Overview:

In October 2006, Micro Finance Unit (MFU) developed and revised Policies and Procedures and at present is piloting MFU operation in 5 first branches located in 9 needy ADPs covering 9 districts including Phu Cu; Kim Dong (Hung Yen); Cam Thuy, Lang Chanh (Thanh Hoa); Trieu Phong and Vinh Linh (Quang Tri); Hiep Duc (Quang Nam) and Hoa Vang (Danang). With the support from WV Australia, MFU is planning to do piloting project in Hung Yen branch for Social Performance Management and Loan Tracking System as well as Transition model when ADP is phasing out in next few years.

In FY09 alone, MFU served more than 3,900 clients in our working areas with total loan disbursement at US$ 818,000. MFU has brought significant changes in the lives of community people. And Mrs. Pham is one among those positively impacted by the loan access from program.

MFU plans to expand to reach more low-income clients while keep maintain portfolio quality within the acceptable framework of WVI standards. We also further improve the management policies and system to ensure the efficiency and effectiveness as well as explore the integration between ADP and MFU to maximize the synergy of WVV’s resource. In addition, we plan to do a legal study after Decree 28 clarification is officially released before deciding on our next phase.

 

Mrs. Pham with her uncompleted house	Mrs. Pham with her husband and a daughter in new house	Mrs. Pham with her “property”

 

A success story from Mrs. Nguyen Thi Pham – Cao Long Hamlet; Cam Long commune; Cam Thuy District.

Joining the program during the early days in 2005, she used 1st and 2nd loan ($US70 and $US200) for pigs and goat raising. With some savings as a result from loan taking, she entered the 3rd loan cycle with the amount of $US320 for 24 months and spent for buying 04 cows.

Family status: Her husband had an accident and lose his working ability. With 3 schooled age children, all the family burdens pour in the shoulders of Mrs. Pham. The family was in very economic difficulty, chasing for each meal threatening 03 kids to drop attending school. Taking some loan from WV program with monthly repayment within her capacity, she is able to have some savings at the end. Until now all are able to go to school, living conditions are improved. She sold 01 cow and with some savings she has completed her uncompleted house as shown in the picture.

 

Her happy smile now is really encouraging us to do our best to bring benefits to many others in the place where WVV is working.