By: Meagan Kraft
I had the privilege of being a host family for my fellow last year, that I am now visiting in Dien Bien Phu. I had been looking forward to this trip for many months. I did quite a bit of research to try to prepare for the culture and my experience. I did not want to act or say the wrong thing. I arrived in Hanoi, with a co-worker of mine, on 3/2/20, after a very long flight. We were then connected with a wonderful woman, who was a contact of the YSEALI program. We had one day in Hanoi and then we were to catch a flight on 3/3/20 to Dien Bien Phu. Our contact was gracious and took out to eat and gave us the quickest city tour of Hanoi. It was truly a beautiful city. It was one of the busiest cities I have ever visited, and traffic was quite scary. There appeared to be no rhyme or reason to the road or how traffic flowed and there was a lot of traffic. In Vietnam you just walk across the streets without waiting for cars or motor bikes to stop. That was very intimidating and hard to get used to, but someone how it just works.
On 3/3/20 we caught our final flight to Dien Bien Phu. We stepped off the plane and I was hit with wave of extreme heat, mind you I was coming from Montana and was not acclimated to the temperature. We went straight to our hotel from the Airport. Once settled in my room, it hit me. I had culture shock and felt extremely overwhelmed and out of my element. It was a combination of the long travel, exhaustion, the language barrier and things just being completely different than I am used to. However, after some rest the shock started to ware off. I quickly realized I was among some of the kindest and most generous people I have ever met.
I am wrapping up my first week in Dien Bien Phu. I am here to work with an NGO called Anh Chi Em (ACE). Vietnam has made it through some tremendous economic growth. However, in Dien Bien Phu there are many rural villages that are unable to pull themselves out the vicious poverty circle. That is where Ahn Chi Em comes into play, they are truly using finance to initiate change. They were founded by a French NGO Entrepreneurs du Monde (EdM) in 2007 and launched a micro finance program with the primary goal of reaching as many ethnic minority individuals as possible. Most of the beneficiaries of this program are women, I was told that 85% of the money lent is to women. There are two reasons for the majority of the borrowers being women.
- The program was started by a women union program that aims to lift us women and children.
- The women have more time to attend the training for the loans as the husbands are often working away from the household.
This micro-fiannce program is not like all. This one is a social micro finance program, that not only focuses on financial aspects, but also nonfinancial activities.
- The finance portion of the program lends out money at a very low rate 1.3% to 1.4% , which is not traditional for a micro-finance program. Also, as part of the loan they also encourage savings. The saving is encouraged in 2 different ways. One is that each month they must deposit a minimum of 30,000 Dong (approximately $1.25 USD), this is the money that is then used to lend to other beneficiaries. The second is voluntary savings. The beneficiaries can access these funds at any time.
- The nonfinancial part of the program focuses on social education. The types of education are things such as agricultural training, human trafficking, HIV/AIDS training, hygiene and many other trainings.
The beneficiaries are very poor and seek small dollar loans to purchase thing such as fertilizer or livestock. However, ACE encourages the beneficiaries to diversify their income as agriculture and livestock can be very unpredictable. There is no control over the weather and therefore their crops may not produce, or the animals get stick and die. When these things happen, then they cannot make a profit to pay back the loans. Hence why the non-financial training can be very important, they try to help by educating the beneficiaries on the different business topics, specific to their needs. The other challenge is that even if they can diversify their income, the areas are very remote, and it is hard to get their products in front of tourist or consumers.
So, far I have spent the majority of my time in the field, learning about ACE’s entire lending process. From the initial meeting (underwriting), to the application process, to the group meetings and nonfinancial trainings (risk management), to delinquency follow up and to the disbursement of the funds. All of this is a done in a manual way. The credit officers work in the remote areas of Dien Bien Phu, every day. They go to the beneficiaries, unlike in the US, where many of these types of transactions are done in person or online. They face many obstacles and their safety can be a risk.
We had the opportunity to visit a village where the women make products from a homemade loom. The whole process is natural, all the way down to the dying of the yarn to make the products. The people truly live off the land and use the land in everyway possible.
ACE goes above and beyond to try and make a difference within their community and their work is truly special. At the end of the day my co-worker and I debrief on our learnings and have come to realize, that while they do things much different here, we actually have quite a lot to learn from them and are thinking of some of the experience we can bring back to our financial institution. So, far my experience has been one of the most humbling experiences. I have been greeted with nothing but excitement and kindness. I have been welcomed into every home with open arms and smiles on their faces. What is inspiring to me is that this whole lending process is not for wants, but simply just needs. I have realized I take a lot of things for granted in my life and this has been very eye opening.
Now that I have a true understanding of the process and the challenges the program faces, my co-worker and I will focus on how we can help. We are working on some management training, policy reviews and process efficiencies. I am looking forward to another amazing week.
Until, next week Tam Biet!
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