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Microfinance transformed lives

The main source of income for Le Thi Le's family (Hai Lang district, Quang Tri province) was only from some small rice fields, which barely covered their daily expenses. Le was the breadwinner of the family consisting of two young children and her elderly parents; the mounting difficulties were on her shoulders, forcing her to look for opportunities that could lift her family up from this challenging situation.

She saw a glimmer of hope when acknowledging the Saving for Transformation Group (S4T) and Pig Raising Group in Hai Lang Area Programme, an initiative by World Vision International in Vietnam. However, loans from the S4T group were limited. Then the local Women’s Union introduced her to World Vision’s Microfinance Programme. She and her husband decided to borrow around USD 400 for 15 months to start their business.

Le Thi Le used a loan of about USD 400 from World Vision International in Vietnam's Microfinance Program to establish a herd of pigs.

The initial capital was utilized to purchase a breeding sow and construct a barn. Le focused on raising pigs and saving money with the knowledge equipped from the S4T and the loan borrowed from the Microfinance program. After 15 months, her sows gave birth to the first piglets. The positive experience has strengthened her family’s confidence in pig-raising, enabling them to borrow more loans to expand the pig-raising scale.

Now, her family life quality has significantly improved. In 2022, with additional financial support from the local government, Le was able to build a new, stable house for her family. She also bought new bicycles for her children so that they can go to school conveniently.

“I could not imagine my life could change this much. The Microfinance program not only allowed me to access loan but also helped me to form a saving habit. These practices gradually lifted our family out of debt. The World Vision’s program staff are very dedicated; they always show up when we need guidance and support.”, said Le.

Remove barriers, promote the growth for microfinance

The story of Le Thi Le is a vivid testament to the change made by the Microfinance Program intervention in a rural village. The World Vision’s Microfinance program was established in 2006 in Vietnam, aiming at improving livelihoods for the poor, near-poor and low-income households in 4 provinces of Thanh Hoa, Hung Yen, Quang Tri and Quang Nam.

Participating in the program, financially disadvantaged people will have access to microfinance services; and have their resilience enhanced by practicing saving and using microinsurance. Besides, they are also equipped with knowledge and skills for business development, sustainable livelihoods, and effective financial management.

Speaking at the seminar on "Microfinance: Opportunities for the financially disadvantaged and micro-enterprises" held on November 29 in Hanoi, Tran Thuy Linh, Director of the Microfinance Program (World Vision International in Vietnam) said: “As of September 2024, World Vision's Microfinance Program has positively impacted more than 24,000 children annually; more than 12.6 thousand people have received financial education, including more than 3.5 thousand people from poor and near-poor households.”

Tran Thuy Linh, Director of the Microfinance Program (World Vision International in Viet Nam) presented the topic “Opportunities and Challenges for microfinance organizations” at the seminar.

In addition to the practical results, Tran Thuy Linh also anaVietn the challenges in establishing and maintaining microfinance institutions in the local context. Low- and middle-income people still face difficulties in accessing financial services due to a lack of collateral. Therefore, solutions are needed to improve the legal and financial environment, enabling these institutions to operate more effectively.

At the seminar, agencies, organizations and communities had the opportunity to exchange and promote the implementation of effective microfinance programs, which can pave the way for improving the quality of life of the poor and micro-enterprises in Vietnam.

Associate Professor Dr Le Van Luyen, former Deputy Director of the Banking Academy, said that a comprehensive and reliable legal framework needed to be in place for microfinance institutions to maximize their effectiveness. The close monitoring of the State Bank and the Party, the Government, Ministries, and other government agencies should be emphasized in this process. When the consolidated legal framework is ready, microfinance institutions will have a better position in accessing domestic and foreign funding sources, allowing them to help people overcome difficulties and become financially stable.

Panel discussion at the seminar.

According to Dr. Pham Minh Tu, Deputy Director of the Banking Strategy Institute, State Bank of Vietnam, it is utterly necessary to establish a united microfinance association for mutual support. Microfinance programs, projects, and institutions also need to improve their financial capacity, proactively expand capital sources, strengthen cooperation with credit institutions, and provide transparent information on operations and governance to attract investors.

World Vision Boosts Quang Tri's Development World Vision International (WVI) in Vietnam contributes to promoting socio-economic development in Quang Tri province.

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