Youth Union loans a ‘lifesaver’ for nascent start-ups hit by pandemic

July 22, 2021 - 09:05

The Provincial Youth Union, in the Northern province of Bắc Ninh, has intervened to save several young start-ups heavily impacted, by the COVID-19 pandemic.


Nguyễn Thế Dũng working on his orchard in Bắc Ninh. VNA/VNS Photo Đinh Văn Nhiều

BẮC NINH – The provincial Youth Union in the northern province of Bắc Ninh, has given a helping hand to save several young start-ups heavily impacted by the COVID-19 pandemic.

Secretary of the Bắc Ninh Youth Union, Nguyễn Đức Sâm said that the COVID-19 pandemic had pushed most of the youth start-up models into difficulty, especially in high-tech agricultural production that provides clean and high-quality foods for supermarkets and restaurants.

To ensure smalls start-ups in the region could survive, the Union co-ordinated with the Việt Nam Bank for Social Policies to support two loan extensions: one for 10 start-ups to the tune of VNĐ7.1 billion (around $309,000) and the second tranche for six more new start-ups totalling VNĐ4 billion ($174,000).

Nguyễn Thế Dũng, a secretary of the Youth Union of Giang Sơn Commune, Gia Bình District, used to be a shining star in the youth start-up movement raising pigeons and growing fruit.

He has struggled over the past year however to sell his goods due to the closure of restaurants and tourist attractions to prevent the spread of COVID-19.

Dũng said that before starting the farm, he tried his hand at several businesses but was unsuccessful.

However, realising that a number of people in the village had abandoned their rice fields he decided to rent their land and try his hand at farming.

“In 2016, I decided to rent more than 1.5ha of land to grow fruit trees and raise pigeons,” Dũng said.

At the time it was difficult for young people to find suitable start-up ideas and more difficult to implement because they lacked experience and capital.

In 2018, Dũng accessed start-up capital with a loan of VNĐ1 billion ($43,000) from the Youth Union.

“In the beginning, I played it safe, choosing to grow fruit trees,” Dũng said.

“I used organic fertilizers and made my own microbial fertilizers and said ‘No’ to any herbicides,” he said.

“To date, my farm has more than 1,000 trees including pomelo, jackfruit, longan and orange and I raised more than 500 pairs of pigeons,” he said.

He has made a profit of nearly VNĐ300 million ($13,000) each year since.

However, at the beginning of 2021, the third wave of COVID-19 pandemic spread throughout Bắc Ninh Province, causing an economic downturn.

Dũng’s farm was no exception.

He said normally, every month his family sold hundreds of pigeons to restaurants and everyday consumers at a price of more than VNĐ100,000 ($4.3) per pair.

However, when the fourth outbreak occurred, all restaurants and tourist attractions had to temporarily close as part of pandemic prevention and control measures.

The birds could not be sold and the cost of buying bird food increased by almost 30 per cent. The fruit trees had not yet been harvested too and that pushed the farm into financial difficulty, he said.

His VNĐ1 billion loan was to fall due in July too.

“I considered selling all the pigeons and ceding part of the farm to pay back the borrowed money,” Dũng said.

Luckily, however, with the support of the provincial Youth Union, I was given the opportunity to delay paying back my loan for 11 months.

“This policy was a lifesaver helping me to reduce my stress levels and continue working to arrange capital to pay the bank back in the future," he said.

Dũng Lê Xuân Trường, 34, in Xuân Lai Village of Gia Bình District has been struggling due to the impact of the COVID-19.

Trường started buying and selling semi-processed bamboo when he was 25.

Gradually he expanded his production capacity to produce art and decorative ornaments from bamboo that he sold to resorts and tourist sites.

Last year, he got a loan of VNĐ330 million ($14,300) from the Youth Startup Fund with an interest rate 5 per cent per year and a 1-year term.

“Developing bamboo crafts requires a large workshop to soak and wash the bamboo, to treat termites, and then cut materials to create decorative shapes,” Trường said.

“In the past, I had gone to many banks asking for loans but I could not borrow because of high interest rates and complicated procedures,” he said.

“I was so lucky to access the youth start-up capital with a low interest rate, and it was a simple procedure and quick disbursement,” he said.

Everything was running smoothly for Trường but when the pandemic hit that all changed.

All his clients were tourism businesses that had to close or reduce the size of their operation. As a result Trường’s business was badly affected.

Goods sold slowly, and orders and contracts were also difficult to implement. His revenue decreased from VNĐ5 billion ($217,000) in 2019 to less than VNĐ3 billion ($130,000) in 2020.

In the first months of 2021, although his business had slightly recovered, it was not enough for him to import more materials and pay for labour. He would not have enough money to pay his debt due in July 2021. Trường was at a dead end.

Fortunately, however, he was approved by the provincial Youth Union and authorities to extend the loan until May 2022.

"This policy was very humane and timely. It helped me to overcome these difficulties and gave me more time to use the loan effectively," he said.

The Bắc Ninh Youth Union provides practical and effective jobs training on startup knowledge to young people all over the region.

During the pandemic, it has not only assisted young producers with financing but also offer value skills training in building a brand, applying science and technology, and contributing to improving and enhancing product value. – VNS