Dien Bien Phu: Widespread debt in the villages….
When we met with the women in the three Black Thai villages (Dien Bien Phu), Nathalie and I asked questions about their current economic situation.
Still, general sentiment is that the economic situation has ameliorated. In the nineties, people often did not have enough to eat. Now there are seasons which are more difficult than others (March-April of the regular calendar), but the standard of living has increased in part because of government-sponsored programs such as free healthcare, animal vaccinations, and education. Most households, however, survive on sustenance farming and have no savings. As such, it is difficult for villagers to rise above their current standard of living.
Most of the women already have experience with governmental loans. In terms of previous microfinance experience, the state bank generally used is the Vietnam Bank of Agriculture and Rural Development (VBARD), though some families qualify for Vietnam Bank of the Poor (VBP). Loan sizes vary from 2 million to 5 million VND ($125-$314). According to villagers, VBP has a monthly interest rate of 0.65% to 0.7% (answers varied) and VBARD has a monthly interest rate of 1.25%. Discussion between husband, wife, family, and friends is used to determine a good loan activity. Ultimately, however, women are in charge of the household economy.
Microfinance has led to widespread debt. Borrowers have invested in animals which have died, thus causing them to find alternate means of income (deforestation, temporary labor, selling land, selling buffalo) or to other loans from private money lenders (3-5% interest rates). Private money lenders are usually ethnically Kinh. Once in debt, the actions taken to get more income often lead to further indebtedness. Debt has been a chronic problem, but was aggravated in the last year because of avian flu and other diseases. There is a need to deal with this issue of debt before initiating another loan program to avoid using new loans to pay off old debts.
Microfinance has led to widespread debt. Borrowers have invested in animals which have died, thus causing them to find alternate means of income (deforestation, temporary labor, selling land, selling buffalo) or to other loans from private money lenders (3-5% interest rates). Private money lenders are usually ethnically Kinh. Once in debt, the actions taken to get more income often lead to further indebtedness. Debt has been a chronic problem, but was aggravated in the last year because of avian flu and other diseases. There is a need to deal with this issue of debt before initiating another loan program to avoid using new loans to pay off old debts.
Still, general sentiment is that the economic situation has ameliorated. In the nineties, people often did not have enough to eat. Now there are seasons which are more difficult than others (March-April of the regular calendar), but the standard of living has increased in part because of government-sponsored programs such as free healthcare, animal vaccinations, and education. Most households, however, survive on sustenance farming and have no savings. As such, it is difficult for villagers to rise above their current standard of living.
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