The Belgian Technical Cooperation (BTC) and Vietnam Women's Union

Up to now, among recipient countries in the Asian Pacific region, Vietnam is always considered as o­ne of the most favourable countries in their support. The support of the Belgian Government to Vietnam is mainly in 5 areas of Public health; Education and training; Agriculture and food security; Infrastructure and social development; Institutional capacity building, administration management.

The Belgian Technical Cooperation (BTC), splited from the Belgian Ministry of Foreign Affairs, has mandate to, o­n behalf of the Belgian Government, manage the implementation of bilateral cooperation projects signed by the Belgian Government with other countries. In Vietnam, BTC has a representative office based in the Embassy of Belgium in Hanoi.

In 1995, through the working visit to provinces in Mekong river delta, the Queen of Belgium, Ms. Fabiola had found the difficulties and burden works faced by Vietnamese poor women. She realized that besides loans to investing in production, the most important for them is how to manage effectively these loans. Accordingly, in order to strengthen the institutional capacity of the Vietnam Women’s Union in management of credit and saving programme and to the needs of women, particularly poor women, o­n 9th December 1996 the project “ Improvement of the VWU’s capacity in management of credit and saving programme for poor women” (in short: Vietnamese - Belgian Credit Project) has been funded by the Government of Belgium. With the total budget of USD 1,938,710, the project has been implemented in 57 communes of 57 districts of 7 provinces: Ha Nam, Nam Dinh, Vinh Phuc, Phu Tho, Thua Thien Hue, Kon Tum and Tien Giang. Based o­n the initial goals/achievements gained from this pilot phase, the Vietnamese Government and the Belgian Government have decided to approve the extension of project in 17 provinces with 207 communes in the whole country for the 2^nd phase with the total budget of 3,796,387 USD.

The project consists of 2 major areas: training and providing and managing revolving loan fund. Besides, there are additional studies to serve these areas.

In the first year, the project focused o­n training activities for the project Management Board o­n planning according to PIPO/IDIMA approaches, management skills o­n credit and saving programme and accounting. So far, about 1,457 rounds of VWU’s cadres of different levels involving in the project management board have been trained.

This is the first project of VWU that systematically applies the international Micro Banker software of FAO in credit and saving management and MMIS. By now, VWU’s cadres in 17 provinces have directly implemented transaction through Micro Banker system to manage clients accounts, fund resources and credit and saving activities. All information o­n credit and saving activities of the project are forwarded to the Central level through e-mail by management boards of different levels.

For the training and management activities, the project has compiled and translated some materials such as “Operational handbook”, “Management of Development activities according to PIPO/IDIMA”, “Using Micro Banker software”. The project also created an additional software titled “Communal report generating software” to serve better for the credit and saving management in the project sites.

Based o­n experiences, strength and weakness of other formal and semi-formal credit-saving services in Vietnam, including TYM model of VWU, the project has designed its credit and saving model and working mechanism in which groups/centers should guarantee for loan, credit comes along with saving (initial saving and regular saving); the loan size is medium and small, interest rates of loans and saving are reasonable; repayment of loan and interest must be due in regular meeting o­n a certain date when other agendas are integrated in order to improve knowledge for women.

The revolving loan activities have been carried out in the second year of the project. Operational circle of revolving loan activities in these localities is carried out as follows: applying credit and saving model in o­ne pilot commune; evaluating, drawing experiences and making adjustment, then expanding the adapted model to other project communes. Thanks to the prominent feature of the management technology of micro finance through e-mail, the project has been expanded with a very high and effective speed. Since the first loan disbursement in the first commune in March 1999, by June 2003, the project has disbursed loans in 207 communes for 65,747 rounds of members with a total amount of outstanding of 35,7 billion VND. The repayment rate and monthly saving nearly reach to 99,97% (except in some cases that members died due to typhoon and flood in Thua Thien Hue province in 1999). Saving by members reaches to 7,3 billion VND.

The project has met its objective to both improve VWU’s management capacity of different levels in credit and saving activities and to make important contribution to poverty alleviation in the project sites. The project organised its 5 year-implementation anniversary in Nov. 2003 in Hanoi marked the effective cooperation between VWU and BTC in terms of capacity building o­n micro finance management and poverty alleviation in Vietnam.