Please describe the goal of your initiative; outline what you are trying to achieve
The proposed project will help poor farmers in Thanh Hoi and Tu ne communes, especially marginalized women gain better access to financial services and cope with extreme events to reduce poverty and improve community well-being. Such initiative will encourage poor farmers, especially marginalized women to build a life within their community. This holistic approach encourages young people to stay in farming, which in turn secures food supplies for the region. A successful demonstration of this approach will be used to spread such practices to other communities in the province and across Vietnam.
Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)
Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,.
If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:
For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?
Tu Ne and Thanh Hoi communes are located in Tan Lac district, Hoa Binh province. The two communes support a population of 10,451 people. More than 70% of the population are people from the Muong ethnic minority group. Poor households in Tu Ne account for 31.7% and Thanh Hoi for 27.2% of the total. The majority of these households do not have access to loans or credits from either NGOs or governmental organizations. CECAD has helped establish a network for community development organizations from the village level to the commune level, under which community-based organizations have been set up to manage development programs, such as Women’s Saving and Credit Group in each village. However, those groups have been operated in piecemeal and isolated instances, thus hindering further success of the groups.
Could your solution work in other geographies or regions? If so, where?
The Vietnam Association of People’s Credit Fund (VAPCF) was established in 2005. It is the Government’s policy to spread the model to the entire country. It is therefore of great importance to establish more PCFs in Hoa Binh province in particular and in the northwest region of the country in general, where poverty is more persistent. So that more affordable financial products will be tailored to the needs of poor and marginalized ethnic minority communities, thus contributing to poverty alleviation in the region.
If your solution is dramatically successful, how will things be different in 10 years?
- 50% of the total population of the two Muong communities have access to financial services. So poor farmers, especially marginalized women will be able to invest in production and other income generating activities.
- PCF members’ income increased by 50% through income generating activities.
- Well-being of 50% PCF members will be increased.
- Two PCFs will be established in the region.
- When a life within their community will be built it will encourage the younger generations to stay with their families, thus minimizing migration to big cities.
What will have had to have changed to make this happen?
It requires the local government leaders at the provincial, district and commune levels to change their point of views about the governmental banking system:
- It is not the only financial service provider in the country.
- Accessibility barriers prevent communities from reaching financial services, thus contributing to poverty.
- PCF is operated according to a hybrid of banking and cooperative system. It financially supports its members and brings into play collective action.
- PCF contributes to construction of new rural Vietnam.
Capacity building for human resources and networking are needed.
What has been the impact of your solution to date?
CECAD began working in Tu Ne and Thanh Hoi in 2004. With support from the Inter-Church Organization for Development Cooperation (ICCO), CECAD has assisted two communes to improve livelihoods, protect the environment and preserve the Muong cultural identity. CECAD has helped establish a network for community development organizations from the village level to the commune level, under which community-based organizations have been set up to manage development programs, such as Women’s Saving and Credit Group in each village. Up to now, 724 members have contributed to their groups $30,000. Loans have been spent on cultivation and animal husbandry, which in turn help improve the status of women both at home and in the public. However, those groups have been operated in piecemeal and isolated instances, thus hindering further success of the groups.
What is your projected impact over the next five years?
- A People’s Credit Fund will be established for the population of Thanh Hoi and Tu Ne communes, Tan Lac district.
- 20% of the total population of the two Muong communities has access to financial services.
- Poor farmers, especially marginalized women will be able to invest in production and other income generating activities.
- PCF members’ income increased by 20% through income generating activities.
- Well-being of 20% PCF members will be increased.
- The point of views of the local governmental leaders about PCF will be changed so that PCF will receive more political support.
What barriers might hinder the success of your project? How do you plan to overcome them?
- PCF will compete with the other banks in the area. The PCF interest is lower than that of the bank. So farmers’ awareness of PCF will be raised.
- Members of the women’s saving and credit groups are concerned about the fact that their money will be merged with the money of the other groups in the communes. It might be difficult for them to withdraw the money when needed. Solution: More appropriate and clear regulations need to be developed.
- Due to low capacity of the management board of the Women’s Saving and Credit Groups, capacity building, workshops and study tours to success models will therefore be needed.
Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact
Establishment of a People’s Credit Fund in Tan Lac district
Now think bigger! Identify your 12-month impact milestone
PCF starts operating: giving loans to meet the needs of the poor.