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Country experiences

Viet Nam: Microcredit and savings

UNICEF has supported a microcredit and savings programme since 1989 in Viet Nam. Implemented by the Viet Nam Women's Union, the programme has provided credit to 33,584 borrowers in 16 provinces. Borrowers form groups of between 10 and 15 members, and loans are made on a group-collateral basis. All the loans are to women. Recovery rates are high. UNICEF has combined the credit programme with health messages, primarily through the booklet Facts for Life. Many social indicators have shown improvement:

• 97 per cent of the daughters of the borrowers attend school compared with 73 per cent of daughters of non-borrowers;
• a survey showed that 73 per cent of the non-borrower house holds faced food shortages of three months or more compared with 12 per cent of the households that had borrowed money. Borrower households no longer attribute food shortages to a lack of land and capital; they attribute them instead to reduced time for food production because of the need to care for small children;
• the project has also increased animal husbandry as a source of income, with 36 per cent of the borrowers considering this as their main occupation compared to 16 per cent of the non-borrowers. In another UNICEF-supported scheme in Viet Nam, 9,600 women have benefited from a microcredit programme combined with literacy and education. Loans go to groups of women comprised of 20 to 30 members each in four provinces. Evaluation shows that:
• a vast majority of the borrowers (97 per cent) have significantly increased their household production since the project began in 1994;
• prior to receiving credit, 86 per cent of the borrower households faced a food shortage of more than one month. After the scheme was introduced, only 33 per cent of borrowerhouseholds experienced food shortages compared to 77 per cent of the non-borrower households;
• although credit has increased household production, it is not clear whether it has enhanced borrowers' confidence and their capacity for decision-making. The empowerment of women, from this perspective, is still to be assessed;
• there is a high demand by non-borrowers to join the scheme — 93 per cent of non-borrowers interviewed wanted access to project loans.

Source: An Evaluation of Credit Mechanisms and Impact, UNICEF Viet Nam, March 1996

Viet Nam: One woman's experience

Mrs. Nguyen Thi Phu, whose arm was amputated in 1984 as a result of a fall, has three children. She had on occasion borrowed from a moneylender at a monthly interest rate of 30 per cent but at one time, when she could not repay her loan, the moneylender took some of her belongings. Since then, she has not borrowed from the moneylender, and the family has lived with food shortages. In 1994, Mrs. Phu borrowed D300,000 (currently $1 = 11,130 dongs) from funds provided by UNICEF with which she bought two piglets. She sold one pig for D720,000 and with the proceeds repaid half the loan. The rest of the money was used to cover daily expenses and her children's schooling. She sold the second pig for D1,200,000, out of which she repaid the loan in full and bought two more piglets. She then borrowed for a second time, and this time her family is experimenting with orange trees while at the same time rearing pigs. Since Mrs. Phu received the loan, her family has been eating much better and her children are in school. Mrs. Phu is also in charge of money management in her house, and her self-esteem has increased greatly.

Source: An Evaluation of Credit Mechanisms and Impact,UNICEF Vietnam, March 1996.

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