Where vietnam’s poor go to borrow – vnexpress international

“Does anyone have any objections?” asked the chair of a meeting of 32 women sitting cross-legged along the floor of the wooden stilt home, dressed in the group’s traditional attire: a long tight skirt and blouse that, taken together, resembles the Vietnamese ‘ao dai’.

The assembly didn’t hesitate to approve the loan application, unanimously. Money lender interest rates Diep, or 12 as indicated by her name tag, got the money she needed within 10 minutes. What is a private money lender Starting August 24, the group gave her six months to repay the sum at 1.5 percent monthly interest.

“The current balance is VND1.7 million,” the two treasurers announced, before placing the bank’s total holdings into a box sealed by three locks – an act signalling the end of the meeting.

While a hair knot on top of their heads indicates that they’re all married, over the last four years, they’ve formed a family of their own, formally known as the Village Savings and Loan Association (VSLA).


The women prefer to call it the Women’s Savings Group for the sake of convenience and simplicity. Money lender miri sarawak They’d also rather go by the number on their name tags because “it’s easier than remembering each others’ names”, according to Vu Dinh Loi, director of the Dien Bien Province Center for Community Development, which has supported VSLA from the start.

Hua Na Village sits in the remote commune of Thanh Nua in Dien Bien District, Dien Bien Province, a place perhaps most famous for the defeat of a French garrison in 1954 that effectively brought an end to colonial rule in Vietnam. Singapore licensed money lender Today, Dien Bien’s rugged terrain remains dotted with rice paddies. Money mutual lenders list Members of the Thai ethnic minority community continue to reside in wooden stilt homes though some have moved to concrete houses and the odd motorbike or television set marks the passage of time.

The Thai women watch a video of their dance performance after a VSLA meeting in Hua Na Village, Dien Bien Province, on August 24, 2016. Singapore money lender Photo by VnExpress/Lam Le

Many of the VSLA’s shareholders did not attend school and have practically forgotten their ABCs, since their everyday lives mostly revolve around farming and raising kids.

As such, meetings follow a simple logic. Private money lender list Members of the group buy shares at meetings held on the 7th and 24th of every month. Money lender professional The value of these shares is then lent to members who need to invest in a new barn, buy pigs, pay school fees or cover emergencies, like hospital bills.

Each member of the bank casts a vote to elect a designated chairwoman, bookkeeper, two treasurers and three key holders. Singapore money lender news Every time they meet, each member has to buy from one to five shares, valued at VND50,000 apiece. Kerala money lenders list The bank also maintains an emergency fund using VND2,000 contributions, every time they meet.

By the year end, all loans must be paid back and the proceeds divided among the shareholders. Money lender meaning in hindi Then a new cycle begins. Best licensed money lender singapore Some have chosen to use the profits to buy assets, while some have actually reinvested their profits in the year that followed.

Those present at the meeting told VnExpress International that no member had ever failed to repay a loan. Money lender tampines The group’s emergency fund sits ready to cover their first default. The money lenders documentary Meanwhile, the group has yet to deny a loan, though they limit applicants to borrowing no more than five times the value of their shares.

“In 2012, we set up the first VSLA,” said Vi Thi Phong, the chairwoman of Thanh Nua Commune’s Women’s Union. Money lender association A year later, the commune had 12 VSLA groups, each with about 25 shareholders.

Illiteracy, a lack of tangible assets and the remoteness of Dien Bien’s mountains make the idea of a formal loan nearly impossible. The money lender Similar situations can be found across the country where, in 2014, only 31 percent of all adults and 19 percent of the poor had a bank account, according to World Bank Financial Inclusion Data (Findex).

Extending that trust to an entire village continues to prove a challenging feat. Money lender meaning in tamil During last month’s VSLA workshop in Dien Bien Province, Women’s Union delegates from throughout the region couldn’t help but question the viability of the model.

Cambridge University Economist Partha Dasgupta says the answer to building sustainable communities lies in trust and credibility. Singapore money lender review Unless people trust one another, they won’t cooperate in the first place. Money lender meaning But trust itself requires a solid foundation. Meaning of money lender Dasgupta argues that five factors can make trust and promises credible: mutual affection, a pro-social disposition, incentives, external enforcement and reputation.

Most of the Women’s Union reps present at the conference saw the answer in the three locks. Capital money lender reviews Coincidently or not, women traditionally manage household finances in Vietnam.

This may explain why “similar models conducted in Vietnam and even in Africa have seen mixed gender groups and male-only groups falling apart where all-female groups succeed,” said Vu Lan Huong, project officer at CARE International in Vietnam.

Since 1991, Care has facilitated the establishment of savings and loans communities across Africa, Latin America and Asia, with 12 million members to date.

Starting in 2010, CARE has helped create 515 VSLAs in Vietnam, and 85 to 95 percent of them have continued to operate after the project ended. Money mart loan interest rates VSLAs have failed in urban communities where members often switch jobs and locations or in village communities where the few literate group leaders left in pursuit of factory jobs.

Plus, it is so much faster and easier to get a small loan from a VSLA than it is at a local bank; the money actually stays within the community and so no one minds that the interest is higher than what’s offered by the Vietnam Bank for Social Policy, the official state provider of micro loans at heavily subsidised interest rates.

“The bank is too far away and they ask for a lot of complicated documents and collateral, which I don’t have” said Lo Thi Tam, a 37-year-old mother of two, who’s been a member of the VSLA in Hua Na Village for four years.

According to Loi, after its first year, each VSLA member in Dien Bien managed to save between VND3.5 million and VND4 million. How to be a private money lender The sum may be small, just enough to invest in the next crop, but the changes it has brought are visible. Define money lender As one woman put it: “It’s not possible to save money for no reason.”

Trust in the system ultimately rests on the three key-holders; should any member wish to rob a “VSLA bank”, she’d have to get all three key holders and the box keeper on board.

When it comes to disputes, contracts don’t enter into things. Money lender synonym Instead, VSLA meetings are vocal, visual and democratic, Loi said. Hard money loan interest rates All the rules are discussed, set and memorized by the members.

After all, the families live very close to each other on the same hill, Loc said, adding that similar projects have failed in remote Kho Mu and Mong ethnic communities where getting from one household to another can take hours.

It would be naive to say that the VSLA model is the perfect recipe for success. What is a hard money lender But the Thai women’s case tells us that what was and perhaps still is the biggest obstacle for the VSLA has also helped the groups stick together.

Before the VSLA, each woman’s life centered around her family, particularly her husband. Unscrupulous money lender They didn’t attend village activities and all major decisions were made by husbands, including when and whether his wife could leave the home.

Interviews by Care International in Vietnam have shown that the Women’s Union had to visit each household and explain the project to each woman’s husband before they could join.

“Whenever I’m at a VSLA meeting, my husband takes care of the house and the kids,” said Tam from Hua Na Village. Money lender list She is not alone. Singapore money lender interest rate Some women now have a greater say in family matters since their economic status has improved.

Both men and women consider improved household incomes and well-being key results of the microfinance program, but men put a greater emphasis on this. Licensed money lender singapore review Meanwhile, women put a higher priority than men on improving their knowledge, skills, confidence and increased solidarity, according to the results of a CARE survey.

Tam says the biggest difference in her life following the CARE program is the chance to discuss her problems with other women. Money lender license list She finally has a place to simply ask what to do when her child falls sick. Singapore money lender list Prior to that, she could only exchange a few sentences with other women when she bumped into them in the village.

Perhaps that’s why the VSLA has proven so popular. Money mutual loans interest rates The women wanted a group of their own where they could socialize, and the saving and lending was just an extra incentive. Money lender license india After all, the earnings are limited by the small size of the loans.

“The VSLA is just a stage in the long process of escaping poverty,” said Huong. International money lenders list “This model matters not simply because it makes people save, it’s a platform to empower women with better social, negotiating and budgeting skills.”

But the road ahead remains a rocky one. What is a money lender A 2015 report by CARE Australia says that in some cases: “VSLA is being largely controlled by men rather than the women members themselves”.

There’ve been cases of husbands telling their wives how much money they should borrow prior to the meeting, or even the wife reporting live to her husband on the meeting via phone for instructions on how much to borrow.

Tam dreams of saving VND100 million for a new home. The money lenders If she only relies on the VSLA, it will take her at least 30 years to save that sum at the present rate.

Many of Vietnam’s poor continue to borrow from moneylenders known for charging exorbitant interest rates, often higher than 100 percent per year, according to the Vietnam Microfinance Working Group.

The government is well aware of the dangers associated with moneylenders. What is a money lender called In its plan to implement microfinance development by 2020, it states it will “build and develop a safe and sustainable microfinance system to serve the poor, low income and micro and small enterprises”.

Microfinance institutions (MFI) play a crucial role here as they can provide bigger loans than the informal VSLA without requiring collateral as they are allowed by law to raise funds from outside the community. Best licensed money lender in singapore However, because of strict requirements, only two licensed MFIs currently operate in Vietnam. Define hard money lender The largest one, TYM, which is overseen by the Women’s Union, has over 100,000 members in 12 provinces and can offer loans of up to VND30 million.

Although this phenomenon is not common in Vietnam thanks to the close monitoring of the Women’s Union and commune leaders, the International Finance Corporation (IFC) has reported anecdotal cases of poor borrowers taking larger and larger loans to cover principal spending.

“Offerings of formal financial products for low-income people are still limited to credit,” said the IFC in its Responsible Finance in Vietnam report. Money lender yishun Most respondents of the IFC’s survey said they preferred to keep their savings at home because the amount is insignificant and they want to have cash ready for emergencies.

This points to the need for a flexible savings scheme for the poor. Money lender review Alongside the VSLA, TYM has created voluntary and compulsory saving schemes for its members, and the Women’s Union is running a 2012-2017 savings scheme of its own. Hard money lender definition But in 2012, MFIs’, licensed and non-licensed, share of the microfinance market was only 4.8 percent compared to the Vietnam Bank for Social Policy’s 65 percent share, according to the IFC report.

Loc’s Center for Community Development is planning to pilot a scheme similar to VSLA with the poorest communities in Dien Bien. How to be a money lender Instead of cash, which many of them don’t have, they’ll use cattle.

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