PRATIQUES - Microfinance

Binh Minh Community Development Consultancy Company

Logo :

Photo of the team :

Country of intervention : Vietnam

City : Hanoi

Date of start-up of activities (month/year) : n/a

Date of institutional constitution (month/year) : 07/2004

Juridical status : Limited Liability company with a social mission and not-for-profit purpose

Address : Dan Di hamlet, Uy No commune

Donh Anh district, Ha Noi, Vietnam

Tel. : (84-04) 8 688 900

Fax : (84-04) 8 839 933

E-mail : Cet e-mail est protégé contre les robots collecteurs de mails, votre navigateur doit accepter le Javascript pour le voir

Internet Website : n/a

Manager (director) : Dinh Anh Tuyet

Key figures :

Number and nature of the programs¹ / activities : microfinance

Teams and number of field workers : 18 staff (5 at HO, 3 at RO, 2 BO with 5 staff at each)

Teams in HO : 6 staff

Total provisional budget 2006 (please mention the currency) : n/a

Total number of direct beneficiaries per year : 2,091 as of May 2006

Sources of private and public subventions : Starr Foundation and Save the Children US

Historical of the creation :

Initiated in 2003 under the direction of the Save the Children US (SCUS) as an Urban Microfinance Pilot Project in Hanoi, the three core objectives were (i) to increase the access of disadvantaged women and children to essential social services by improving their capacity to earn and save income;(ii) to develop a financially and institutionally sustainable microfinance program based on ‘best practices’ applied in the Vietnamese context; and (iii) to create a microfinance coalition to disseminate microfinance best practices. In 2004, Binh Minh was registered as a non-profit, limited liability company with a mission identical to that of the project, i.e. to ‘create positive impact on the lives of disadvantaged women and their children through a microfinance program following good practices’. While still overseen/guided by SCUS, Binh Minh has become an independent entity under the direction of Ms. Dinh Anh Tuyet (a former SCUS staff member).

Objective/mission :

Vision toward: “A society in which all low-income households in Vietnam can have access to financial services” and a mission to: “become one of the leading MFIs in Vietnam, with the objectives of increasing living standards, enhancing livelihoods and minimizing risks for poor households and in particular, women and low-income people by providing appropriate, friendly MF services and products which are delivered on a large scale by professional staff”.

Action’s principles :

Binh Minh’s operations are based on a social mission combined with a strong business approach. Binh Minh would like to develop the company’s image as friendly, professional and convenient with affordable services. Binh Minh’s innovative establishment as a non-financial service company to replace the Vietnam Womens Union (VWU) in the role as portfolio administrator was based on several factors: (i) a service company would not need a banking license (requiring significant capital); (ii) no limitations of Mass Orgs; (iii) services can be provided anywhere in the district; (iv) professional staff can be recruited, independent of VWU staff; (v) operations can be designated by program staff; and (vi) a company, unlike NGO, is allowed to borrow commercially. However, the legal status presents a number of challenges during the company’s transformation to a legal MFIs as the Vietnam regulations do not allow for private entities to operate microfinance programs and companies are not allowed to carry out banking (lending) operations. While Binh Minh is evaluating its future status for transformation, it has a MoU with VWU which allows it to operate.

Programs:

Binh Minh has a singular focus on microfinance with four areas of operation: (i) market research, (ii) credit information, (iii) investment consulting and (iv) business consulting. As of May 2006, there are 2,091 active clients, 97% female clients, $220K outstanding loan portfolio, 0% portfolio at risk, 69% low-income clients, 82% financial self-sufficiency ratio and 232 active clients per credit officer.

Target groups and beneficiaries :

The overall target group of Binh Minh is “low-income households in Ha Noi”. The specific target group as formulated e.g. in the lending policy is ‘women with malnourished children or children who have dropped-out of school; single headed households; and women who have no access to formal financial sources’ . Borrowers must have permanent residence in the locality, be above 18 years old, have no bad debt, and be member of a group. Only one person per household can borrow at a time. In terms of the income level of Binh Minh’s target market and current clientele, ‘70% of Binh Minh’s clients are poor and low-income earners defined as people earning the average income for Ha Noi province of VND 806,860/month (US$50) or less’.

As of May 2006, 2,091 beneficiaries have been reached.

Operational Partners :

Vietnam Womens Union (MOU / delivery channel), Hanoi and Dong Anh People’s Committee, Vietnam State Bank (regulatory/license), Microfinance Working Group (network membership), Save the Children US (donor/owner), Starr Foundation (donor)

Financing / Budget :

not yet available