REVOLVING LOAN PROGRAMME

Transcription

1 REVOLVING LOAN PROGRAMME Annual Report 2013 Christina Noble Children s Foundation - Vietnam

2 PROgrAMME DESCRIPTION Established: 1997 Reporting Period: January to December 2013 Location: Target Group: Local Partners: CNCF Staff: Monitoring visit: CNCF Involvement: Ben Tre, Dong Nai and Kien Giang Provinces Families living in poverty with focus on children s lifelong study DOLISA in Ben Tre Province, WU in Long Thanh District, Dong Nai Prov ince, DOLISA in Kien Giang Province Mr. Nicolas Pistolas, Ms. Son Thu Trinh, Ms. Donna Burr, Ms. Nguyen Thi Binh Minh, Ms. Nguyen Thi Mong Thuyen Scheduled on a case by case basis Continuous Loan capital: VND 615,000,000 Future Plans: Continue to provide loans for beneficiaries, to undertake a baseline survey and from the analysis to have general assessment for input (beginning) and evaluation for output (ending) of each revolving loan cycle using the Sus tainable Livelihood Approach (SLA) Emphasize livelihood trainings for the project beneficiaries and revolving loan management skills for the local project facilitators Report Compiled By: Nguyen Thi Binh Minh, Capital Projects Manager 2 Revolving Loan Programme / Annual Report 2013

3 TabLE OF CONTENTS Programme Description 2 Summary 5 Programme Background and Overview 8 Programme Achievements in Past Years 16 Programme Activities and Achievements in in Pictures 28 Abbreviations: CNCF DOLISA NGO PPC RL US$ VND WU Christina Noble Children s Foundation Department of Labour, Invalids and Social Affairs Non-Governmental Organisation Provincial People s Committee CNCF Revolving Loan Programme US Dollar Vietnamese Dong Women s Union 3 Revolving Loan Programme / Annual Report 2013

4 Making cotton hammocks at home 4 Revolving Loan Programme / Annual Report 2013

5 summary Programme impact for the beneficiaries and their households: The programme responded well to meeting the needs of the beneficiaries by providing low interest loans, which in turn helped beneficiaries to reduce dependency on loans from other institutions at high interest rates. The project helped to increase employment of the households and helped them to save money. The loan recipients have been able to switch from rice farming and livestock breeding to vegetable planting and small businesses, which are more financially lucrative. The loan recipients have also been able to establish jobs in their hometown rather than having to leave home to look for work. Results of livelihood activities by the 107 recipients from the three project sites: 90/107 households succeeded in their livelihood activities. For these households, lessons learned that led to their success included having good planning for livelihood activities, learning more skills, and managing effective household incomes and expenditures. 9/107 households did not have success due to the characteristics of their small businesses as well as lack of labour including labourers low skills. 8/107 households in Ben Tre Province were cancelled during the loan cycle. 5 Revolving Loan Programme / Annual Report 2013

6 Evaluation: For the Revolving Loan Project in Dong Nai Province, an evaluation of this report cycle will be organized in July 2014 based on an extension of duration of payments for some loan recipients by the local partner. For Ben Tre Province, an evaluation will be organized in March For the Revolving Loan Project in Kien Giang Province, an evaluation of the report loan cycle loan was completed in August A summary of the findings is available in the CNCF Vietnam office. Cancellation cases: At the end of the year 2013, the total loan recipients were 99 from an initial 107 loan recipients. During the loan cycle period 34 recipients were cancelled and replaced with 28 new recipients. The 34 loan recipients that were cancelled were due to the following reasons: For Dong Nai, 26 households had better living conditions and became self-reliant. For Ben Tre Province, 8 recipients needed bigger loan sizes which were beyond the maximum amount available with this revolving loan project. 6 Revolving Loan Programme / Annual Report 2013

7 Girl with her family s livestock 7 Revolving Loan Programme / Annual Report 2013

8 PROGRAMME background and OVERVIEW Rationale In Vietnam, poor families often have no collateral or limited access to formal banking sources due to their economic conditions or the low profitability particularly for those in farming. Many do not qualify for a standard bank loan because they have neither a practical plan nor confidence to use a loan efficiently nor any collateral. Commercial banks are also reluctant to lend given the inherent challenges involved in growing various crops and raising livestock, poor natural resources or stagnant markets. The lack of any collateral was also a disincentive to the banks who were worried that loans would not be repaid if businesses failed. Consequently, these people have no means to grow their economic activities in order to improve their living conditions. The CNCF Revolving Loan (RL) project not only helps increase the income of these people but due to improved finances in the family it also empowers women, as well as ensuring children are able to remain in school. 8 Revolving Loan Programme / Annual Report 2013

9 CNCF Revolving Loan Project History and Background The Revolving Loan (RL) Programme was established in December 1996 by the Christina Noble Children s Foundation (CNCF). This project maintains an objective of poverty eradication for destitute households in selected areas of southern Vietnam through the provision of and access to loans at low-interest rates. The CNCF Revolving Loan Programme has been active in Kien Giang, Dong Nai and Ben Tre Provinces. Due to the improvement in economic development and government policies, the programme was phased out in three districts in Ho Chi Minh City including: District 2, Cu Chi and Can Gio. In the CNCF Revolving Loan (RL) Projects simple lending procedures are introduced and poor households are given relatively small loans of between US$150 to US$500. The loans are used to start up a microenterprise such as rice growing or cash crop farming, livestock breeding or small businesses like grocery stores. The loan is then recovered and recycled to help other poor households and the cycle goes on. The duration of a loan cycle varies from 1 year to 3 years and a household commits to several loan cycles before they become self-reliant, usually within several cycles. To date the RL Projects have not only helped increase the income of poor households but they have also had the added effect of empowering women as well as ensuring children can go to school. Women are the main target group in CNCF s long term effort to start or enhance economic activities. Rural micro-credit is strategic in increasing the economic development in rural areas. However many poor found themselves in a situation where they needed loans to invest and grow their business but banks were not willing to lend to the poor causing a continual cycle of poverty. 9 Revolving Loan Programme / Annual Report 2013

10 Programme Goal and Objectives Goal: In accordance with the guidelines of the Christina Noble Children s Foundation, the Revolving Loan Programme maintains a goal of poverty eradication for destitute families in target areas of southern Vietnam through the provision of access to small revolving loans at low-interest rates to help them develop a sustainable livelihood. Objectives: Poverty stricken-families beneficiaries - are able to access low interest loans with no collateral in order to create more job opportunities for themselves and to increase their family income. To improve the ability of poverty-stricken families to provide education and healthcare for their family members, to limit school dropout rates for children and to decrease the rates of illnesses and disease in their families. Programme Beneficiaries The Programme is, first and foremost, intended for poverty-stricken families in the above-mentioned provinces. These families have little to no access to formal banking loans due to a lack of collateral. They are also families with many school-age children. Loans will be offered with priority to those who can prove they can use the loans most effectively. 10 Revolving Loan Programme / Annual Report 2013

11 One of the families we support 11 Revolving Loan Programme / Annual Report 2013

12 Admission Criteria: Local partners and CNCF make random visits to homes of recipients to verify beneficiaries meet the criteria and programme goals and objectives. CNCF maintains the right to intervene in the beneficiary selection decision if necessary. Concerns or adjustments will then be made and once all requirements raised by CNCF are met, CNCF will inform the local partners of its approval to issue the loans. Loan recipients are selected according to the following criteria: 1) Be low income earners 2) Have children at school age 3) Be eligible to work but have none or very meagre financial resources 4) Be hardworking and determined to escape poverty, and 5) Facilitate access to schooling for their children. Cancellation Criteria Poverty stricken families who become self-reliant and able to generate their own capital. Where all family members are adults and/or no children are at school age. Where a beneficiary has stopped their business and have not replaced it with a new business for a period of over six months from the initial stop date. Where a loan has been used for another purpose. 12 Revolving Loan Programme / Annual Report 2013

13 Programme Site and Partnership The Revolving Loan Projects began in 1997 in Kien Giang Province, in 1998 in Long Thanh and Dong Nai Provinces, and in 2007 in Tan Binh, Mo Cay Bac, and Ben Tre Provinces. CNCF finds that many of the project successes come from the effective collaboration between two parties in each project site. Local partners (DOLISA/ Women s Union) have sufficient numbers of capable staff who were able to be involved in the joint project management. In each Province they have been able to keep CNCF updated with the activities. They were also open to discussion with CNCF on the implementation of the loans. In 2012 CNCF renewed close partnerships with local partners which has subsequently contributed to the success of the RL project. 13 Revolving Loan Programme / Annual Report 2013

14 Loan interest collection and use in the Loan cycle evaluation Low interest rates are applied to those beneficiaries receiving loans to enable them to improve their family s economic status. The rate charged is 0.5% to 1% per month, charged on a monthly basis, and based on the total amount of the loan. This amount is used for project administration management and contingency fees as per the following loan interest schedule: Technical training for loan recipients (2 trainings/year): 37.5% Operational expenses for the Management Unit to implement, monitor, report and evaluate revolving loan project: 15% Stationery: 5% Travelling allowance for local Revolving Loan facilitator: 8.33% Project management for facilitator: 20% Contingency: 10% Others (e.g. meetings and photographs): 4.16% 14 Revolving Loan Programme / Annual Report 2013

15 On our way to a home visit 15 Revolving Loan Programme / Annual Report 2013

16 PROGRAMME ACHIEVEMENTS IN PAST YEARS Projects by Province Dong Nai Ben Tre Kien Giang Established Local Partners WU of Long Thanh District Provincial DOLISA Provincial DOLISA Number of Loan Cycles No. of beneficiaries (Households) 1, ,296 Loan size (Million VND) Budget (Million VND) Table 1: Achievements from in the past year excluding the report loan cycles 16 Revolving Loan Programme / Annual Report 2013

17 Proud mother working at home 17 Revolving Loan Programme / Annual Report 2013

18 PROGRAMME ACTIVITIES AND achievements IN 2013 Summary of the report loan cycles by project site, duration, beneficiaries and loan sizes For the Revolving Loan Project in Dong Nai Province, CNCF have been advised that some households, who were granted loans later than forecasted, will return their loans for this report loan cycle in July 2014, instead of March 2014 as scheduled. Therefore the evaluation for this loan cycle will be organized in August For the Revolving Loan Project Ben Tre Province, the evaluation of this loan cycle will be organized in March For the Revolving Loan Project in Kien Giang Province, the loan cycle ended in August 2013 and the evaluation of the loan cycle has already been completed. The evaluation report is finished and a summary and recommendations have been made available to the CNCF Vietnam Board of Management. The decision for the new period of this Revolving Loan Project is expected to start in March The report loan cycles are the 9th loan cycle at the Long Thanh District, Dong Nai Province; the 2nd loan cycle at Tan Binh Commune, Mo Cay Bac District, Ben Tre Province; and the 11th loan cycle at Son Kien Commune, Hon Dat District, Kien Giang Province 18 Revolving Loan Programme / Annual Report 2013

19 Province Dong Nai Ben Tre Kien Giang Total Local Partners WU of Long Thanh District Provincial DOLISA Provincial DOLISA 3 Duration of current loan cycle Mar 11 Mar 14 ( 9 th loan cycle) Mar 11 Mar 14 (2 nd loan cycle) Feb 12 Aug 13 (11 th loan cycle) - No. of beneficiaries (Households) Loan size (Million VND) Budget (Million VND) Table 2: Loan cycles by project site, duration, beneficiaries and loan sizes. 19 Revolving Loan Programme / Annual Report 2013

20 Family with their tree saplings 20 Revolving Loan Programme / Annual Report 2013

21 Total number of loan recipients by livelihood activities at the beginning of the report loan cycle For the Revolving Loan Projects in Dong Nai and Ben Tre Provinces, evaluations were not conducted in These evaluations will be key to understanding the beneficiaries livelihood activities from the beginning to the end of the loan cycle. For the revolving loan project in Kien Giang, the trend of livelihood activities has changed. Now, many loan recipients tend to opt for sundry businesses as they want to work in livelihood activities that are low risk. Projects Dong Nai Province Ben Tre Province Kien Giang Province Raising livestock Micro enterprise Rice/ cash-crop cultivation Small handmade production Total Grant total 107 Table 3: Total number of loan recipients by livelihood activities at the beginning of the report loan cycle. 21 Revolving Loan Programme / Annual Report 2013

22 Loan provisions by loan recipients, loan size from the beginning of the report loan cycles up to the end of 2013 At the end of the year 2013, the total loan recipients were 99 from an initial 107 loan recipients. For the revolving loan project in Dong Nai Province, at the end of the 2013, twenty-six cases were cancelled because they had better living conditions and had become self-reliant. The other twenty-eight cases were allocated into the project bringing the total cases up to 42 recipients. For the revolving loan project in Ben Tre Province, eight recipients were cancelled. According to the Ben Tre Dolisa, these 8 recipients needed bigger loans which was beyond the maximum amount available through the CNCF revolving loan project. Therefore they returned the CNCF loans to borrow larger loans (up to 30 millions) under the Government s Policy Banking System. Ben Tre Dolisa requested to provide the remaining loans for three new households. However, an evaluation plan has been set up for this revolving loan project at the end of March 2014 end of the loan cycle. Therefore, we have requested Ben Tre Dolisa to postpone the new allocation cases until after the completion of the loan cycle evaluation. 22 Revolving Loan Programme / Annual Report 2013

23 Number of recipients Project sites Total recipients at the beginning of the current loan cycles Loan provision (Million VND) 4 M by borrowing loan levels 5 M (Million VND) 6 M 7 M 10 M 1 5 M Cancelation number of recipients New admission number of recipients Number of recipients end of 2013 Dong Nai Ben Tre Kien Giang Total Table 4: Loan provisions by loan recipients, loan size from the beginning of the report loan cycles up to the end of Revolving Loan Programme / Annual Report 2013

24 Results of livelihood activities by the 107 recipients by three project sites At the end 2013, through CNCF visits to the beneficiary households and from local partners reports, CNCF learned that 90/107 households had achieved success in their livelihood activities. For these households, lessons learned that led to success included: having good planning for livelihood activities, learning more skills, and managing household incomes and expenditures. 9/107 households did not do so well due to the characteristics of their small businesses and due to a number of other factors such as: lack of experience, lack of knowledge of the business they were running; lack of family members who could support them to run the business; poor health/old age which limited their ability to run the business consistently and long term. The limited size of the loans was also seen as another factor for beneficiary households who were not able to make a good income. 8/107 households in Ben Tre Province were cancelled from the projects. Project Good livelihood activities Failure Other reason (Lack of detailed figures / cancellation...) Dong Nai Ben Tre Kien Giang Total Table 5: Results of livelihood activities by the 107 recipients 24 Revolving Loan Programme / Annual Report 2013

25 Home visit - Making brooms 25 Revolving Loan Programme / Annual Report 2013

26 Project impacts for the beneficiaries and their households For this report, we focus on the impacts of the loan on the recipients and their households rather than the communities or the Direct Local Management. This information will become available following the planned evaluations. For the recipients and their households, the project responded to the needs of recipients by: providing revolving loans at low interest rates; helping to improve the unemployment issue of the households by reducing the percentage of recipient households who borrowed loans at high interests from the black market; and by helping recipient households build financial capital for their livelihood activities by allowing them to save money. Many loan recipients were able to switch from poor income generating activities such as rice farming and livestock breeding to higher income generating activities like vegetable planting and small businesses. Loan recipients have also been able to set up work in their hometowns rather than having to leave home to look for work in other Provinces or big cities. All of the above factors have helped many recipient households out of poverty. 26 Revolving Loan Programme / Annual Report 2013

27 Woman with her livestock 27 Revolving Loan Programme / Annual Report 2013

28 28 Revolving Loan Programme / Annual Report IN PICTURES

29 Home visit - Making fishing nets 29 Revolving Loan Programme / Annual Report 2013

30 Home visit 30 Revolving Loan Programme / Annual Report 2013

31 Business inspection 31 Revolving Loan Programme / Annual Report 2013

33 Handmade brooms 33 Revolving Loan Programme / Annual Report 2013

35 Making hammocks the traditional way 35 Revolving Loan Programme / Annual Report 2013

36 Our local partner feeding the livestock 36 Revolving Loan Programme / Annual Report 2013

37 Business inspection 37 Revolving Loan Programme / Annual Report 2013