changes the lives of rural women
|Tran Thi Hong (right)
and a fellow farmworker tend their pigs in Mai Son District, Son La
Province. — VNS Photo Doan Tung
HA NOI — Luu Thi Sau
would have hardly ever imagined that a tiny loan of VND300,000 (about US$20)
could have changed her life so dramatically.
Sau, a resident of Me Linh
District in Vinh Phuc Province, is one of the success stories of a microcredit
fund established about twelve years ago.
At the time, Sau and her
husband, who had no stable job, earned a meagre living from farming. Life was
harder since they had three children to care for. But things began to turn
around for them when they heard about the Affection Fund, a programme begun in
1992 by the Viet Nam Women’s Union, which makes small loans to rural women to
help them set up household businesses.
"With the first loan
of VND300,000 (US$2), my husband and I decided to sell pottery. We were
gradually able to make ends meet. After paying back the loan, I was able to
borrow again, and I was eventually allowed to borrow VND15 million ($950), the
highest loan level allowed by the fund," said Sau.
She then shifted to
raising hogs and selling chemical fertilisers, businesses which give her family
a solid income of VND10 million ($625) a month.
"Though the first
loan I borrowed was small, it helped me get out of poverty, a life I used to
think I could never escape. Without that beginning, I would not have the life I
have today," Sau said.
Since its founding, the
Affection Fund has been operational in seven provinces with a mission to improve
the status of poor women and their families through credit and savings
opportunities, creating favourable conditions for them to participate more fully
As a microcredit
institution, the fund makes loans of VND300,000 to VND15 million ($20 to $950)
at 1per cent interest per month for terms of 20 weeks (emergency loans), 50
weeks (general loans) and 70 weeks (special loans). To encourage an economical
spirit, members of the fund also have to make compulsory savings deposits of
VND3,000 ($0.2) per week, receiving interest of 3.6-7.2 per cent annually.
The fund has helped some
30,000 women over the years.
Another microcredit fund
in Son La Province’s Mai Son District is operating on the same premise and has
offered further evidence of the effectiveness of microcredit as a tool for
The Mai Son Fund for
Promoting the Development of Women in Mountainous Areas was established in 2003,
growing out of the earlier Credit Savings Programme piloted by ActionAid Viet
Nam in 1993. With initial capital of VND1.2 billion ($75,000), the fund makes
loans to women only, in amounts of VND500,000 (US$32) to VND10 million ($625).
"We want to change
the role of women in the family and in society. With the ability to borrow loans
and start their own businesses, they can become more confident and
assertive," said fund director Vu Thi Khau.
The special feature of the
fund is that borrowers don’t need collateral, simply a guarantee from five
members of the local women’s union.
Tran Thi Hong, a resident
of Hat Lot Township in Mai Son District, testifies to the effectiveness of the
"My husband was a
drug addict for five years and died in 2002. I had almost nothing at the time.
It was hard for me to borrow from anyone because I had no heirs; I only have two
daughters. But the leaders of the women’s union asked the fund to lend me a
small amount of money to rebuild my life," said Hong.
Hong’s farm now has
1,000 chickens, 150 pigs (including 14 breeding sows) and a shop selling
animals, earning VND9 million ($562) a month. She is also willing to help other
women in difficulties by sharing experience and assisting them with livestock.
Sau and Hong are both
participating this year in the Citigroup Microentrepreneurship Awards Viet Nam
2007, co-organised by the Citigroup Foundation and the Microfinance and
prevails over banking services in poor areas, since banks aim for big profits,
but microfinance institutions work mainly for the poor," said centre
director Nguyen Bich Vuong. "We hope that these awards will inspire the
poor to start their own businesses and publicise best practices in
microentrepreneurship. By encouraging the poor to emulate effective models, the
programme will facilitate the creation of more sustainable
Le Thi Thuy, director of
the Centre for Women and Development and a member of the judging panel for the
awards, said, "Microfinance funds are in fact one of the most effective
methods for eradicating poverty in developing countries like Viet Nam.
Microfinance helps the poor with opportunities to earn new income, start saving,
make investments and begin the process of climbing the ladder of economic
development." — VNS