Microfinance in the Field

The program consisted of three field trips to two different communities, Soc Son and Hoa Binh (which is Vietnamese for ‘peace’). Our workshops in Hanoi introduced us to the theories and complexities of microfinance programs, while the field trips translated these into practice. This combination allowed us invaluable insights into this area of development and inspiring glimpses of rural Vietnam.

During the field trips, we observed the communities, farming practices, and interviewed locals to learn about their experiences. Every farmer welcomed us into their home and was happy to share their story with us.

One of the interviews stands out for me. During our first field trip to Hoa Binh, we interviewed a young, female farmer to understand the levels of access to sanitation in the community. During the workshops, we had discussed the complexities of poverty and how it can be split into 3 levels: the poorest poor, the moderately poor and the richest of the poor. This young woman was in the first of these categories.  She was married with two adorable young sons. They all lived in a small concrete house consisting of one room, in which there were two beds and a chest. Walking into her house, we could see the entirety of her material possessions, far removed from the luxury we are accustomed to. For some reason, her story of wanting to expand her crops resonated with me. Maybe it is because she is one of the poorest farmers we interviewed. Maybe because she is 21, the same age as me, which exemplifies how entirely different our lives are. To me, the most inspiring aspect was her resilience; she had a positive view of the future for her family, and plans to increase her income through hard work.

This is where microfinance comes in. Bloom provides small loans to farmers who prove that they will use the money to increase their capacity to earn income. These loans go up to US$400 (although the average loan is US$100) and provide farmers with the capital to buy things such as fertilizer and seeds at the start of the season and repay the loans using the profit they gained from the harvest. We encountered so many struggling families during the field trips, whose only income may come as infrequently as every 8 months. Making that income last is a struggle, creating a cycle of poverty that prevents them from investing in new crops or livestock. Microcredit loans provide farmers with the start up capital to escape that cycle. It is not an instant gateway out of poverty. It involves risk, careful planning and patience, but slowly it can make a difference.

The various interviews throughout our field trips showed us success stories as well as the issues that exist with the microfinance model. Overall, it was clear that microfinance and education programs were giving farmers in these communities a wider range of choices for their futures.

– Jacinta, Poverty Reduction through Microfinance program, Vietnam, January 2014.  Jacinta Vietnam

 

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