Narrative:
Situation Before the Initiative Began
Hue is Vietnam’s old imperial city. UNESCO has designated Hue as a world cultural heritage. Yet Hue is economically disadvantaged because it has little cultivatable land and an inhospitable climate. Women are traditionally disadvantaged due the Confucianist system that requires women to defer to men in the family and society.
Establishment of Priorities
Self-reliance is the human quality that allows people to overcome adversity and prosper. The spirit of selfreliance can only blossom under favorable conditions, such as having sufficient self-esteem, physiological wellbeing, a sense of security, and social resources. These conditions seldom exist in ThuaThien-Hue province, especially among women.
SREEW-ML’s first priority is to facilitate the economic self-sufficiency of women so that they have equality with men when facing daily challenges. The second priority is to provide basic knowledge of human rights and health. The third priority is to facilitate a vibrant community in which citizens participate freely in localizing Agenda 21.
Formulation of Objectives and Strategies
The objective of SREEW-ML is to assist women in poor families to take up a trade to earn income for their family. The concomitant objective is to empower the women to fend for themselves with equality in matters of the family and community.
SREEW-ML first establishes a set of transparent objectives, codes of conduct, and by-laws for the organization. Social workers coordinate with community governments to obtain support, and with collaborators to team borrowers into MSGs. Training sessions are conducted before contract signing and each loan disbursement. Respect, honor, integrity, and transparency are observed scrupulously to ensure trust.
Mobilization of Resources
A Vietnamese-American assured QKKTL of 100,000 USD per year for 5 years, with the condition that it was to generate enough interest income to pay for all costs within 2 years and to seek additional capital investment from other sources within 5 years. These conditions were met in 2002 and 2005, respectively. Currently SREEW-ML has capital contributions from Creating Opportunities in Vietnam (COVN), Room to Read Foundation (RtR), and the East Meets West Foundation (EMW). It has also sought funding from the U.S. East Asia/Pacific Woman’s Issue Fund.
SREEW-ML adopts the Grameen methods with modifications to suit the local conditions. In particular, we are sensitive to the plight of poor women, and have not charged interest rates at “commercial” levels. We control costs carefully. We also couple the loan process with the training process, thereby instilling knowledge of trade skills, human rights, health, and methods to combat against violence to women. SREEW-ML’s Board of Directors consists of community-respected citizens who do not draw a salary. The Executive Director is a woman, as is the Deputy Director. All workers are local residents and college graduates. We maintain excellent relationships with the community, city, and provincial governments, and have received excellent cooperation.
Process
SREEW-ML’s process starts with the study of a community to establish an operation plan. Upon approval by the Board, two workers are assigned to work with the local government, seek a local collaborator, inform the population, and form MSGs. The workers conduct training sessions regarding the goals, objectives, bylaws, and the loan process. Honor, integrity, honesty, adherence to the agreements, transparency, and mutual help are training priorities. At disbursement, the workers additionally provide training and booklets on personal hygiene, public sanitation, sex education, and human rights.
SREEW-ML charges lower interest than commercial banks. We also process contracts quickly without demanding collateral, but only word of honor. We provide bonuses for adherence to the agreements. We award scholarships and build kindergartens. These processes endear SREEW-ML to the communities. SREEW-ML is highly appreciated without having to make claims or advertise itself.
A problem SREEW-ML encountered early in the program was the suspicion and/or non-cooperation of doctrinaire government officials. This has been eliminated, thanks to our demonstrated effectiveness. Another problem is the non-cooperation or prohibition by close male members regarding women taking out a loan. We do not know how widespread this hidden problem is, but since the beneficiary families are very poor, the resistance of the male members against the females trying to help would be limited. Our current survey seeks to shed light onto this problem and its solution.
The risks SREEW-ML faces are many. High on the list is a possible policy change of the one-party government. Another risk is a possible calamity, such as a large flood or shrimp or avian disease epidemics. In such events, the poor might not be able to make the monthly payments or to repay the loans at all. An additional risk is the safety of our workers who must perforce carry large sums of cash in a society in which credit cards are not widely used and banks are existent only in city centers. SREEW-ML has implemented a plan to mitigate these risks.
After 6 years of successful operation in 24 communities, the people and government now embrace SREEW-ML enthusiastically. We currently do not have sufficient capital to expand to all the communities that request our assistance. Many NGOs have offered to participate or replicate the program in other provinces. The Hue City and ThuaThien-Hue governments have incorporated SREEW-ML as an essential element of their 21st century strategic development plans.
Results Achieved
SREEW-ML has reached all the objectives the originators set out in 2000. We have assisted 7400 poor women in 24 communities, graduated close to 500 as of 2005, achieved 98.2% capital recovery, and earned interest income in excess of operating costs. We have additionally awarded 48 scholarships annually, built two kindergartens and trained the female teachers to operate them as private schools, and organized training sessions for shrimp farmers to combat an epidemic. The ThuaThien-Hue citizens now enthusiastically embrace SREEW-ML, and the program has become an essential element of the government’s strategic development plan. Many NGOs have joined forces with SREEW-ML. Others would like to replicate our successes in other provinces of Vietnam.
Virtually every borrower has been a case study in success. We show five success stories and one example of adversity in the Addendum. Our workers contact the beneficiaries every month, visiting them at their homes or workplaces. They report visible signs of betterment, including new bicycles, new furniture, diversified merchandise, more pigs, increased amounts of fruit trees or vegetable acreage, or other signs of improvement. Best of all, they see the smiles on people’s faces and the happiness of borrowers, even when repaying the loans. Many women beneficiaries have assumed leadership roles in their communities. Performance measures have included: number of beneficiary families, communities, and MSGs; number of graduates; loans outstanding; capital recovery factor; ratio of income over costs; number of scholarships awarded and kindergartens built; and leadership roles assumed by beneficiary women in the communities.
Sustainability
Sustainability is viewed from two different aspects. A woman’s self-reliance and economic viability is sustained when she is able to generate income to feed her family and, after three rounds of micro-loans from SREEW-ML, is able to obtain a loan from a commercial bank to continue her life plan. Judging from the work and happiness of 98.2% of our beneficiaries, and those of the graduates, we are sure that their self-reliance and economic viability are sustainable.
Financially, SREEW-ML is sustainable because interest income has exceeded operating costs. In order to expand, SREEW-ML has a plan to raise capital from sympathetic expatriates of Hue who are now living in all corners of the world. Several have responded. Additionally, we plan to borrow low-interest capital from organizations, such as the World Bank and the Asian Development Bank, that are sympathetic to the redevelopment of war-ravaged Vietnam. We are sure that the spread of the interest rates between borrowing and loaning is sufficient for us to operate the program. Finally, SREEW-ML plans to apply to operate as a credit union, accepting deposits from citizens in order to provide loans to poorer people. With the experience obtained over the past 6 years, we have no doubt that this effort will contribute to the sustainability of the program.
SREEW-ML has been successful in reducing poverty in the 24 communities it serves, raising the self-reliant capacity of women in the family and community, and contributing to the sustainable empowerment of their role as equal partners to the male members. With women aware of their rights and having the capacity to fend for themselves and their young against life’s hazards, the cultural, social, economic, and environmental values of the communities SREEW-ML serves are definitely more vibrant and sustainable.
Lessons Learned
SREEW-ML has learned several lessons from its operation over the past 6 years. Four of these are: plan and organize carefully, be transparent, plan for risks, and choose the right management information system (MIS).
SREEW-ML started out right by setting goals, objectives, codes of conduct, and by-laws. It solicited the participation of respected local citizens to sit on the Board, thus creating an instant credibility with the government and community. It hired workers carefully by stressing true concern for the poor, ethical conduct, and the willingness to work hard and to discuss problems openly.
Transparency is a feature that allows SREEW-ML to handle hundreds of thousands of dollars without the problems of theft, suspicion, or graft. Financial reports for the project are open to anyone who has the need to know, and are audited by co-workers on a rotating basis, in addition to outside audits. All expenditures must be posted, and no expenditure is too small to be cited.
SREEW-ML did not plan enough for risk when it financed several hundred farmers to raise shrimp for export. SREEW-ML did not anticipate major problems with project; however, an epidemic wiped out the shrimp crop in 2005, causing the SREEW-ML capital recovery factor to drop from 100% to 98.2%. Keeping track of tens of thousands of loans requires an MIS that is very expensive to purchase and run. SREEW-ML has used Excel in combination with handwritten accounting to achieve this gargantuan task. While we have worked with the IT Department of Hue University to compile software for tracking the loans, this software is still too limiting for us to query important information. We need additional assistance and are
searching for a cost-effective solution.
Transferability
Vietnam has the Tao Yeu May (TYM) micro-loan program in the North and Capital Fund for Employment for the Poor (CEP) micro-loan program in the South. These programs were initiated by government entities, and neither is sustainable due to the high operating costs. SREEW-ML is based on the concept of selfreliance, cost control, moral motivation, bonus award, and transparency. It is replicable and transferable.
The Hue City government’s strategic development plan includes greening the city, resettling the dilapidated slums along the Huong River, clearing the streets of homeless people in a humane fashion, and providing vocational training for the jobless. The City has asked the SREEW-ML to extend the self-reliance concept to these plans.
North of Thua Thien-Hue is the Quang Tri province, and south is the Quang Nam province. Friends of SREEW-ML have explored transferring our experience to establish similar programs in these provinces. We explained to these friends that money alone cannot build a similar program such as SREEW-ML. Excellent planning, transparent rules, ethical conduct, and hard work by caring citizens differentiates between credibility or skepticism, effectiveness or ineffectiveness, and therefore, success or failure of these programs.
SREEW-ML plans to double its size to 14,000 women beneficiaries in 50 communities in the next 5 years. We have confidence that we will succeed using our own resources and those from sympathetic NGOs and Hue expatriate contributions. We envision helping others replicate SREEW-ML throughout Vietnam in the 21st century. In particular, we envision success in empowering women to be equal partners to men in all endeavors, and to be able to fend for themselves against hazards that often come to women in poverty.
Related Policy/Legislation
The Prime Minister of Vietnam prepared Agenda 21 for Vietnam on March 9, 2005, to be in effect 15 days after its publication in the Vietnam Register. SREEW-ML fits excellently into this agenda. The Mayor of Hue City displayed the SREEW-ML program in the Conference of City Mayors in Hanoi in July 2005.
