The microfinance for the poor in vietnam the case of tra vinh province (Tóm tắt trích đoạn)

Graduate Business School
Dissertation Cover Sheet 2011-2012
Student name:

LONG BUI THANH

Student number:

2826149

Course:

MSCAF

Subject:

Master of Accounting and Finance Management

Study Mode:

Full time

Lecturer Name:

Suzanne Burdis

Dissertation Title:

The microfinance for the poor in Vietnam: The case of Tra Vinh province

Date submitted:

13/9/2013

Stage/year:

x

3

Part-time

Plagiarism disclaimer:
I understand that plagiarism is a serious offence and have read and understood the college policy on plagiarism. I also
understand that I may receive a mark of zero if I have not identified and properly attributed sources which have been
used, referred to, or have in any way influenced the preparation of this assignment, or if I have knowingly allowed others
to plagiarise my work in this way.
I hereby certify that this assignment is my own work, based on my personal study and/or research, and that I have
acknowledged all material and sources used in its preparation. I also certify that the assignment has not previously been
submitted for assessment and that I have not copied in part or whole or otherwise plagiarised the work of anyone else,
including other students.

Signed & dated:
Please note: Students MUST retain a hard / soft copy of ALL assignments as well as a receipt issued and
signed by a member of Faculty as proof of submission.


The microfinance for the poor in Vietnam:
The case of Tra Vinh province

Research dissertation presented in partial fulfillment of

the requirements for the degree of MSc in Accounting
and Finance Management (HETAC & NTU)

Graduate Business School
Griffith College Dublin

Dissertation Supervisor: Dr. SUZANNE BURDIS
Candidate Name: LONG BUI THANH

2013


Candidate Declaration

Candidate Name:

LONG BUI THANH

I certify that the dissertation entitled:
The microfinance for the poor in Vietnam: The case of Tra Vinh province
Submitted for the degree of: MSc in Accounting and Finance Management is
the result of my own work and that where reference is made to the work of
others, due acknowledgment is given.
Candidate signature:

Date:
Supervisor Name:

Supervisor signature:
Date:

Acknowledgements

I dedicate this work to my supervisors, Suzanne Burdis, who gave me much
good knowledge on my dissertation. I would like to thank my mom, dad,
brothers and sister who have always been there when I needed them and
believed in me even when I did not. I really thank so much my wife and my
daughter whom give beliefs and hopes in my life.


Abstract
The microfinance for the poor in Vietnam:
The case of Tra Vinh province

This study examines real situations of microfinance programs for the poor in Tra Vinh
province, Vietnam. Besides, the study also analysed the impacts of microfinance operations
in poverty reduction from 2010 to 2012 at Tra Vinh province. Namely, the study measured
the effectiveness’s microfinance for the poor and weakness’s poverty reduction policies in
Tra Vinh province. The study conducted to survey the poor’s measurements in access to
microfinance sources. Therefore, the research presented recommendations about appropriate
polices that can contribute practical solutions in poverty reduction through microfinance
programs at Tra Vinh province, Vietnam.


Table of contents

Candidate Declaration
Acknowledgements
Abstract

Table of contents
1. INTRODUCTION ……..…………………………………………………………….1
1.1 Overview …………………………………………………………………………….1
1.1.1

Overviews of Vietnam …………………………………………………………..1

1.1.2

Overviews of Tra Vinh province ………………………………………………1

1.2 Research objectives and Aims ……………………………………………………….4
1.3 Structure of dissertation ……………………………………………………………...6
2. LITERATURE REVIEW ………….………………………………………………..8
2.1 Introduction ………………………………………………………………………….8
2.2 The nature of microfinance ………………………………………………………….8
2.3 Microfinance policies at some developing countries in the world…………………11
2.3.1

Bangladesh …………………………………………………………………………..11

2.3.2

India (SEWA Bank)…………………………………………………………………15

2.3.3

Indonesia (Bank Rakyat Indonesia)……………………………………………...16

2.4 Microfinance policies at Vietnam ………………………………………………….16

2.5 Microfinance in the context of Tra Vinh province, Vietnam ………………………21
3. RESEARCH METHODOLOGY ………………………………………………….23
3.1 Introduction ………………………………………………………………………...23


3.2 Research Objective …………………………………………………………………23
3.3 Research strategy …………………………………………………………………..24
3.4 Methods for data collection ………………………………………………………...25
3.4.1

Primary data ………………………………………………………………………..26

3.4.2

Advantages and disadvantages of primary data ……………………………….27

3.4.3

Secondary data …………………………………………………………………….28

3.4.4

Advantages and disadvantages of secondary data ……………………………28

3.5 Possible techniques for analyzing data ……………………………………………29
3.6 Access and research ethics issue ………………………………………………….29
4. RESEARCH ANALYSIS …………………………………………………………31
4.1 Introduction ……………………………………………………………………….31
4.2 Analyzing real situations of the poor people at Tra Vinh province……………….31
4.2.1

Information of the poor at Tra Vinh province …………………………………31

4.2.2

A summary of the poor in Tra Vinh province ………………………………….34

4.3 The realty of getting access to microfinance programs in the Tra Vinh province.37
4.3.1

Information on microfinance providers in Tra Vinh province ……………..37

4.3.2

Evaluating microfinance operations in Tra Vinh province ………………...42

4.4 Measuring the effects of microfinance programs ………………………………..44
4.5 Comments about microfinance programs for the poor at Tra Vinh province……46
4.5.1

The effectiveness of microfinance programs at Tra Vinh province………..46

4.5.2

Limitations of microfinance programs at Tra Vinh province ……………...47

5. RECOMMENDATIONS AND CONCLUSIONS ……………………………..48
5.1

Evaluating the impacts of microfinance programs for the poor in

Tra Vinh province ……………………………………………………………48
5.1.1

The success of microfinance programs for the poor in Tra Vinh
province in past three years …………………………………………………….48

5.1.2

Weakness of microfinance programs for the poor in Tra Vinh
province in past three years …………………………………………………..49

5.2

5.3

Recommendations for microfinance programs in the futures …………………50
5.2.1

The long term microfinance strategy for the poor in Vietnam ……………50

5.2.2

Direct microfinancing solutions for the poor in Tra Vinh province……..51

Conclusion …………………………………………………………………….52
5.3.1

Results of my research …….…………………………………………………..52

5.3.2

Limitations of my dissertation ………………………………………………..52

5.3.3

Experiences of research ………………………………………………………52

Reference …………………………………………………………………………..54
Appendix A: Survey questionnaire - The microfinance for the poor: The case
of Tra Vinh province, Vietnam……………………………………………………..57
Appendix B: Table 4.7 - Statement of the poor household data in Tra Vinh
province 2010 – 2012 ………………………………………………………………60


The microfinance for the poor in Vietnam: The case of Tra Vinh province

2013

Chapter 1
INTRODUCTION

1.1 Overview
1.1.1 Overviews of Vietnam
Vietnam is a nation was damaged significantly by a terrible war in long time and it was ended in
30/4/1975. There are many challenges for Vietnam economy that was over Vietnamese people.
Most of the Vietnamese people lived in poverty stricken life, and the big numbers of Vietnamese
people were illiterate after the end of the Vietnamese war. The Vietnam economy depended on
completely aids from communist countries in the war such as Soviet Union. And then,

Vietnam was a socialist country and had a subsidy economy. After the end of the war, Vietnam
economy also depended on many aids from socialist countries. Governmental economy showed
many weaknesses in control and management based on socialist models. Especially, there is a
failure of Soviet Union and communist countries in the world that effected significantly for
Vietnam economy. Besides, there was an economic embargo with Vietnam from America after
they failed Vietnamese war. Therefore, Vietnam had not opportunities access to developed
countries in the world. Vietnamese leaders were very bad economic management knowledge and
they always leant social economy model which are causes of Vietnam economy were very weak
from 1975 to 1986. In addition, corruption was a big problem in Vietnamese government that
was created a drawback perspective for Vietnam economy.

In recent years, Vietnam economy has been changed significantly in many sides. Vietnam is one
of the countries with higher economic growth in Asia pacific (behind China and India). After
1986, Vietnamese leaders looked many weaknesses in economic management and the failure of
socialist model. The Vietnam changed completely economy that considered a period of reform in
Vietnam economy. Besides, American government decided to lift the embargo toward Vietnam.
Vietnam could open accessing to all countries in the world. These are reasons for significant
Vietnam economy growth.
Long Bui Thanh

Page 1


The microfinance for the poor in Vietnam: The case of Tra Vinh province

2013

Besides the success of economy, Vietnam also showed the interests in poverty reduction. There
were 60% Vietnamese population in 1990 lived a miserable condition after the war and the rate
of poor population reduced 10% Vietnamese population in 2012 according to poverty standards

of United National Organization (World Bank, 2012). There were about 8.85 million Vietnamese
poor people, about 2.8 million poor households (Asia Development Bank, 2012). From these
points show that was an effective change in the poverty reduction at Vietnam. The percentages of
poor people reduced significantly in the past years. However, the numbers of poor people
occupied a big amount of population. The poor always were disadvantages of economic changes.
There are still more challenges facing the poor people day by day. As the economy grows so it
also creates high inflation, the increase of cost of goods adds to the disadvantages faced by the
poor in the life. Most of the poor lived in remote and rural areas and their jobs were complete
farming. They always were low education and limited opportunities accessing to modern
information. Therefore, they had to face poor life in long time.

Long Bui Thanh

Page 2


The microfinance for the poor in Vietnam: The case of Tra Vinh province

2013

Chart 1: Vietnam Map

(Source: www.en.vietnamitasenmarid.com)
Long Bui Thanh

Page 3


The microfinance for the poor in Vietnam: The case of Tra Vinh province

2013

1.1.2 Overviews of Tra Vinh province
Tra Vinh province is one of the poorest provinces in Vietnam. Tra Vinh province was established
in 1992. Public infrastructures were very poor, the most of nature was agriculture and
aquaculture. Local government invested too slowly in poverty reduction. There was about 21 %
of population is the poor in 2012 in Tra Vinh province and there was 52 % of poor people are
Khmer, Khmer is ethnic minority (Department of Labor and Social Welfare Service of Tra Vinh
province, 2013). The number of the poor always is a big interesting of local government and
local people in many past years. Most of the poor lived in lack of many sides such as low
education, lack of material facilities, lack of modern information, etc. Especially, Khmer
objectives were many disadvantages of poor life conditions. They had customs living in remote
regions far urban areas such as shanties, home villages, and they limited to communicate modern
society which created limitations of modern information, education, and modern society.

Chart 2: Tra Vinh province Map

(Source: www.en.vietnamitasenmarid.com)

Long Bui Thanh

Page 4


The microfinance for the poor in Vietnam: The case of Tra Vinh province

2013

1.2 Research objectives and Aims
Based on real situation of poverty in Tra Vinh province in past years, Government interested

more than in poverty reduction through microfinance programs were from Banks, credit unions,
social unions. It showed many objectives for poverty reduction. Microfinance is a good solution
for poverty reduction in many countries in the world and this is apparent in India, Indonesia,
Cambodia, etc. The model of Grameen Bank in Bangladesh is a symbol for microfinance
programs in the world. Thence, it gave me an idea for research strategy about microfinance in
my home town. I was really admired model of Grameen Bank in Bangladesh by Vietnam and
Banladesh had the same situations about economy and religions. The model of Grameen Bank
showed significant success through Dr.Yunus, who found Grameen Bank, was the Noble Peace
Prize winner in 2006.

I was born and grew up in Tra Vinh province, Vietnam. I understand the challenges of the poor
in my fatherland. Also, I have learned finance in Griffith College Dublin and they are the reasons
for choosing the research topic “The microfinance for the poor in Vietnam: the case of Tra Vinh
province”. It aims to identify appropriate microfinance solutions to operate in Tra Vinh province
to improve the situation of the poor people in that province. Financial factor was a big interesting
for the poor, because the finance could solve many things for people. Especially, a few money
could help the people over normal challenges that is a big opportunities for the poor. The poor
could only manage small money and use effective.

In recent time, there were many microfinance organizations established in Tra Vinh province. It
provided many small loans for the poor. And then, the numbers of the poor were access to many
borrowings. However, there were not effective analysis of these microfinance programs and it
lack information for microfinance operations in poverty reduction. Based on financial
knowledge, I was leant from Griffith College Dublin; I have been considered if microfinance
uses right objective and right way which will create much effectiveness for poverty reduction in
Tra Vinh province. It can make diversified income for the poor through practical microfinance
Long Bui Thanh

Page 5

The microfinance for the poor in Vietnam: The case of Tra Vinh province

2013

policies. To measure the real impacts of microfinance programs in Tra Vinh province for the
poor, I conduct to study microfinance operation from 2010 to 2012. Firstly, the study will
analyze real situations of the poor through household criterion such as income, living costs, the
number of household, age levels … Secondly, the study will analyze real operations of
microfinance organizations in Tra Vinh province and measure levels of the poor were access to
borrowing from microfinance programs. In addition, it will survey measurements of the poor
upon procedure of borrowings, interest rates, loan levels, etc. Finally, results of research will
give a deep view about microfinance operations in Tra Vinh province. And then, I will show
recommendations to contribute effective poverty reduction through appropriate polices.

1.3 Structure of dissertation
In my research, I used survey method and comparison analysis to measure the real situation of
the poor in Tra Vinh province concerning their access to microfinance organizations. I aim to
identify the impacts of the current microfinance programmes available to the poor in Tra Vinh
province. Therefore, I can give comments and recommendations. There are five chapters in my
research including:
Chapter 1 is an introduction that presents overviews about Vietnam economy, the situations of
the poor in Tra Vinh and Vietnam. Therefore, it shows objectives and trends for the research.
Chapter 2 is Literature review that conducts to collect theory about microfinance operations in
the world and Vietnam. It built a model of theory for microfinance perspective in the research.
Especially, I focus on the model of Germeen Bank in Bangladesh that is a symbol of the
successful microfinance model in the world. Chapter 3 is research methodology that presents
objectives and methods of research. And then, it also shows analysis methods and gathering data
collections. Chapter 4 is finding analysis that presents results of data collection and analysis.
Chapter 5 is recommendations and conclusions that include comments about microfinance

operations and recommendation solutions for appropriate polices to ensure the effectiveness of
microfinance programs for the poor in Tra Vinh province.

Long Bui Thanh

Page 6


The microfinance for the poor in Vietnam: The case of Tra Vinh province

2013

At the end of my research, I give my comment for myself in process of research that is very
important for my job in the future. Besides, the dissertation can give a general view about
business research methods. It also is a good experience for my life.

Long Bui Thanh

Page 7