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Vi Sao Can Vdcs 16 09 08 English


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Microfinance in Vietnam

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Vi Sao Can Vdcs 16 09 08 English

  1. 1. Advocacy for the development of Microfinance Lan Le Thi M7- CFRC, Hanoi September 16 th , 2008
  2. 2. Overview <ul><li>Why is advocacy needed? Why do we need to facilitate the development of Microfinance? </li></ul><ul><li>Process and methods of advocacy in Vietnam </li></ul><ul><li>Their effects </li></ul><ul><li>Challenges and solutions </li></ul><ul><li>Lessons from experience </li></ul>
  3. 3. Why is advocacy needed? <ul><li>Background Information </li></ul><ul><li>Microfinance is a young peculiar movement aimed at both economic and social objectives. </li></ul><ul><li>Microfinance was established on the basis of providing the poor with loan capitals without requiring mortgaged assets with the hope that the poor can have access to this service to improve their conditions. Thus, microfinance is faced with several challenges mainly due to lack of knowledge and trust . </li></ul>
  4. 4. Why is advocacy needed? <ul><li>Background Information </li></ul><ul><li>In 1990s, microfinance was introduced in Vietnam through different channels; different purposes of usage, approach methods, partners/practitioners with different knowledge, technology and management capability. </li></ul><ul><li>The only legal flow for microfinance service implementation during the past two decades has been Vietnam’s administrative system (the authorities, functional agencies, socio-political organizations but few VGO)‏ </li></ul>
  5. 5. Why is advocacy needed? <ul><li>Working fields </li></ul><ul><li>Basic issues about microfinance including targets, roles, microfinance’s impact on hunger eradication and poverty reduction as well as social development are firstly worked on. </li></ul><ul><li>Microfinance Technology, standards, best practical experience in the world and Vietnam </li></ul>
  6. 6. Why is advocacy needed? <ul><ul><li>Targets </li></ul></ul><ul><li>Lead agencies of microfinance program/organization </li></ul><ul><li>Senior leaders of the Government and local authorities, influential individuals who can decide on the establishment, activities and development of microfinance services </li></ul><ul><li>Related management agencies include the State Bank system, Ministry of Finance, Ministry of Planning and Investment, Ministry of Labor, Invalid and Society Affairs… </li></ul>
  7. 7. Process and methods of advocacy <ul><li>1. Organize/ Co-organize Microfinance forums nationwide and internationally </li></ul><ul><li>In the period of 1993-1995, some INGOs led by Save Children UK opened a forum for information sharing and connection. </li></ul><ul><li>In 1998, under GRET’s project Microfinance resource Center was established and also tried re-activate the forum. </li></ul>
  8. 8. 1. Forum organization <ul><li>… can boost microfinance’s development and its important roles.” </li></ul><ul><li>Trần Quang Khánh </li></ul>“… though early established, microfinance in Vietnam started developing only after the development of the market-oriented economy…” Vụ trưởng vụ các tổ chjức TDHT.
  9. 9. 1. Forum organization <ul><li>Created opportunities for KIVA investors at the regional Microfinance forum held in Hanoi </li></ul>Members from Microfinance organizations came to celebrate the opening ceremony of the Regional Microfinance on August 26 th , 2008
  10. 10. 2. Newsletters and websites <ul><li>. </li></ul><ul><li>In 2004 MFWG published </li></ul><ul><li>Microfinance news twice a </li></ul><ul><li>year </li></ul><ul><li> </li></ul><ul><li>In 2006, M7- For equality </li></ul><ul><li>and development report </li></ul><ul><li>issued quarterly </li></ul><ul><li>http//: </li></ul>
  11. 11. 3. Uses of the mass media <ul><li>- Disseminate </li></ul><ul><li>information via the </li></ul><ul><li>mass media: </li></ul><ul><li>broadcasting and </li></ul><ul><li>television </li></ul><ul><li>- Produce video tapes </li></ul>- In co-operation with Vietnam Television produce programs like Grameen Integration & Vietnam
  12. 12. 4. Attracting leaders to participate in the microfinance process <ul><li>- Invited former Prime </li></ul><ul><li>Minister Vo Van Kiet to </li></ul><ul><li>visit a staff training </li></ul><ul><li>class </li></ul>- Organized a meeting between Professor, Dr. Muh. Ynut and former Prime Minister Vo Van Kiet - Invited Vice Prime Minister Phan Van Khai to visit GB - Reported to senior leaders of the National Assembly, Vice Prime Minister Nguyen Khanh and ministers of related ministries - Invited senior leaders to visit offices
  13. 13. 4. Attract leaders to participate in microfinance process <ul><li>Invited local leaders at commune or province level to take </li></ul><ul><li>part in: </li></ul><ul><li>- Project opening meeting </li></ul><ul><li>- Training course opening day </li></ul><ul><li>- Sum-up meeting </li></ul><ul><li>- Members’ Candle lighting celebration </li></ul>
  14. 14. 5. Directly participate with the State Bank <ul><li>- In 2000, ActionAid, Save Children UK and MRDP </li></ul><ul><li>(SIDA) together conducted a field research </li></ul><ul><li>on microfinance services in three provinces (namely </li></ul><ul><li>Ha Tay, Phu Tho, Son La) for the Government, </li></ul><ul><li>relevant agencies and SBV. </li></ul><ul><li>- 2005-2006, the State Bank paid a visit to several </li></ul><ul><li>successful microfinance organizations in </li></ul><ul><li>Vietnam (CEP, Ninh Phuoc…)‏ </li></ul>
  15. 15. 5. Directly participate with the State Bank <ul><li>- In 2000, Action Aid, Save Children UK, MRDP (SIDA) co-operated to organize the first workshop on Vietnam’s Microfinance </li></ul><ul><li>- 2002-2005 workshops organized by ADB and the State Bank on the Government’s Decree on Microfinance with relevant opinions contributed </li></ul>2007-2008, contributed ideas to Decree No. 165/NDCP, TT02 of MFO, experts and sponsors. April 25 th , 2007
  16. 16. 5. Directly participate with the State Bank <ul><li>- July 2008 organized two State Bank staff training courses in Northern provinces </li></ul><ul><li>- August 2008 continued to organized two more training courses in Middle and Southern provinces </li></ul>
  17. 17. III. Effects of Advocacy-1 <ul><li>- Many people learn about Microfinance more officially </li></ul><ul><li>- Social awareness of Microfinance becomes clearer; gaps between Vietnam Microfinance’s regulations and international regulations are being lessened </li></ul><ul><li>- Decrees and Circulars are more feasible </li></ul><ul><li>- State Bank staff is equipped with more comprehensive knowledge on Microfinance and legal frameworks, thus being enabled to have more practical points of view </li></ul>
  18. 18. Effects of Advocacy- 2 <ul><li>- Microfinance organizations receive more attention from the local authorities (for example, in Da Nang, Thanh Hoa CQ promotes the establishment of social funds while in Ha Tinh and Quang Ninh there are more open policies on CQ’s activities on Microfinance)‏ </li></ul><ul><li>- Microfinance activists have more trust in their future and thus actively reinforce their resources to transform into Microfinance organizations. </li></ul>
  19. 19. Challenges and solutions (1)‏ Solutions Workshop organization, field visits, individual persuasion, inviting to national and international workshops, international experts’ opinions Big challenges Influential people’s knowledge on Microfinance at different levels leads to different viewpoints on policy issuance
  20. 20. Challenges and solutions (2)‏ Solutions All international organization (UNICEP, UNDP, UNFPA, FAO) together with INGOs and Vietnam partners co-organize a conference to give recommendations to the Government of Vietnam Challenges -The authority suggested one organization (VBP) be in charge of all capital (1995-1996)‏
  21. 21. Challenges and solutions (3)‏ Actively and continually enhance MFOs 4- Instructing documents. Decrees fail to be issued in time Solutions Persistently persuade relevant authorities to revise the policies through results of international activities Challenges 3 - Current policies still conflict with the reality (law-regulated capital, safe proportion, staff standards, headquarter…)
  22. 22. Challenges and solutions (4)‏ Seeking sponsors or sharing costs among organizations High costs for advocacy Solutions In-depth discussion, explaining or maintaining opinions when submitting to relevant agencies Challenges Loose connection between member organization and the network in advocacy activities
  23. 23. V. Lessons from experience (1)‏ <ul><li>- Firstly, it is needed to identify the scope and targets to build appropriate content and methods </li></ul><ul><li>- Combine in-breadth communication methods with in-depth research via workshops, training andfield visits </li></ul><ul><li>- Tighten relationships among related Technical support organizations, research institutes, policy makers and microfinance practitioners in the country and in the world </li></ul>
  24. 24. Lessons from experience (2)‏ <ul><li>- The actual number of the poor who managed to improve their lives strongly influences sponsors, the authorities and policy makers </li></ul><ul><li>- Safe indexes, proportions of self-sustainers and index of effects from MFIs are highly convincing, which gives trust to the authorities, policy makers and sponsors </li></ul><ul><li>- Advocacy activities should be regularly updated and implemented </li></ul>
  25. 25. Facilitate Microfinance for development Thank you!