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DIRECT vs INDIRECT PES:
Could Micro-credit be an option?

Le Ngoc Lan, Florence Milan, Chu Thai Hoanh, Tran Duc Toan, Nguy...
Introduction
• Objective:
- To find out if microcredit could be an option to use
PES more effectively.
• Study site:
- Da ...
1. Problem of direct disbursement (1)
Forest owners which are
individual houshold
received very small
amount of money whic...
1. Problem of direct disbursement (2)
Column1
Son La province
Chieng Co
commune
- Chieng Yen
village
- Hom village
Chieng ...
1. Problem of direct disbursement
(3)

• Unclear land allocation from the past
caused conflict during payment
Eg: some hou...
2. Why could micro-credit be an
option?

(1)

• Two formal organization provide
microfinancial services:
- Vietnam bank fo...
2. Why could micro-credit be an option?
Households hardly access to VBARD
loans due to:
- Distance from village to distric...
2. Why could micro-credit be an
option? (3)
2. Why could micro-credit be an
option? (4)
• No difficulty in access to VBSP loans.
• However, not all of them were grant...
2. Why could micro-credit be an
option? (5)
• Community Development Fund:
- 4/5 villages used the fund to pay for forest
p...
2. Why could micro-credit be an
option? (6)
“Since you will receive this fund continuously
every year, when road and other...
3. Conditional vs Unconditional
lending (1)
• To those who participate in forest
management activities, between these two
...
3. Conditional vs Unconditional
lending (2)
Conditional & Unconditional lending

Frequency Percent
Vali d
Conditional
Unco...
4. Where to borrow?
• Among these three options, where would
you prefer to borrow from?
THANK YOU FOR YOUR
ATTENTION!!!
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Day 1 session 5.3 direct vs indirect pes could microcredit be an option

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Transcript of "Day 1 session 5.3 direct vs indirect pes could microcredit be an option"

  1. 1. DIRECT vs INDIRECT PES: Could Micro-credit be an option? Le Ngoc Lan, Florence Milan, Chu Thai Hoanh, Tran Duc Toan, Nguyen Duy Phuong
  2. 2. Introduction • Objective: - To find out if microcredit could be an option to use PES more effectively. • Study site: - Da Bac district, Hoa Binh province - 4 communes in Son La (Chieng Yen, Chieng Ngan, Long Phieng, Phieng Khoai) as comparative case • Research methods: - Questionnaire, focus group discussion, official interview
  3. 3. 1. Problem of direct disbursement (1) Forest owners which are individual houshold received very small amount of money which contribute absolute nothing to forest management activities. Minimum amount of money that household received was 2,000 VND (1 cent) Contribution of PES Frequency Valid None Less Total Percent Valid Percent Cumulative Percent 9 11.0 11.0 11.0 52 63.4 63.4 74.4 21 25.6 25.6 100.0 82 100.0 100.0
  4. 4. 1. Problem of direct disbursement (2) Column1 Son La province Chieng Co commune - Chieng Yen village - Hom village Chieng Ngan commune - Pung Luong village Long Phieng commune - Mo Tuoi Village Phieng Khoai commune - Ta En village Total forest area under payment (ha) 633786 Total money from PES Community (,000 VND) forest area (ha) 100000 2185.86 23357 123277 1327.23 Total forest individual owners Note 480889.2 106.17 560.35 Total PES for community (,000VND) Total PES for individual owners (,000 VND) 291991 392.28 86302 3614.18 49089 4186.54 579.59 915462 127509 23357 82000.7 0 119 0 41276.3 community keep all money from PES for community and for individual household 795125 223.13 106.17 441 86302 41650 208.28 11 22 7439 63261 77 64248
  5. 5. 1. Problem of direct disbursement (3) • Unclear land allocation from the past caused conflict during payment Eg: some households claimed that they are the real owner of this forest => official did not know to whom they should pay.
  6. 6. 2. Why could micro-credit be an option? (1) • Two formal organization provide microfinancial services: - Vietnam bank for Social Policies (VBSP) - Vietnam bank for Agricultural and Rural Development (VBARD)
  7. 7. 2. Why could micro-credit be an option? Households hardly access to VBARD loans due to: - Distance from village to district transaction office => Transportation cost. - Collateral examination of bank offical usually takes from 2 – 6 months. (2)
  8. 8. 2. Why could micro-credit be an option? (3)
  9. 9. 2. Why could micro-credit be an option? (4) • No difficulty in access to VBSP loans. • However, not all of them were granted 100% amount of loan due to fluctuation of VBSP loans disbursement to commune every year. => Increase of demand for loans.
  10. 10. 2. Why could micro-credit be an option? (5) • Community Development Fund: - 4/5 villages used the fund to pay for forest protection group and invest into infrastructure such as: road, cultural house,etc - Mo Tuoi village, used the rest to lend to villagers.
  11. 11. 2. Why could micro-credit be an option? (6) “Since you will receive this fund continuously every year, when road and other infrastructures are already built, what will you use this fund for?” “Lending to villagers for production” is the most answered.
  12. 12. 3. Conditional vs Unconditional lending (1) • To those who participate in forest management activities, between these two types of loans, what would you prefer? 1. Conditional: You can access to loan with very low interest rate but you have to use the loan for forest production. 2. Unconditional: You can access to loan with higher interest rate than 1st case but the rate is still lower than bank. You can use loan for different purpose.
  13. 13. 3. Conditional vs Unconditional lending (2) Conditional & Unconditional lending Frequency Percent Vali d Conditional Unconditional Ko vay Total Valid Percent Cumulativ e Percent 15 18.3 18.3 18.3 20 24.4 24.4 42.7 43 52.4 52.4 95.1 2 2.4 2.4 100.0 82 100.0 100.0
  14. 14. 4. Where to borrow? • Among these three options, where would you prefer to borrow from?
  15. 15. THANK YOU FOR YOUR ATTENTION!!!
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