Vietnam - Risk-managing Financial Services for Informal Women Workers

In 2001, one third of the Vietnamese population lived in poverty. Most of those who were not poor lived close to the poverty line. Poor and near poor households, particularly women, are vulnerable to a range of risks that can have a devastating effect on their livelihoods.

To achieve the poverty and hunger eradication targets set by the Government of Vietnam, it is necessary to address two important and connected challenges: a) to lift people out of poverty and b) to protect people from suffering declines in their livelihoods. Microfinance is typically associated with the first challenge. Through loans for income-generation or microenterprises, microfinance enables the poor to increase, or at least stabilise, household income. Considerably less attention, however, has been given to the role of financial services in addressing the second challenge.

If properly designed and delivered, microfinance has the potential to help safeguard poor households against the extreme vulnerability that characterizes their everyday existence. Loans, savings and insurance can help smooth income fluctuations and maintain consumption levels even during lean periods. Financial services can serve as a buffer for sudden emergencies, business risks, or seasonal slumps that can push a poor family into destitution.

The aim of this two-year action research project, funded by the French government, is to test innovative financial products, such as emergency loans, flexible savings or insurance, which will reduce poor women’s vulnerability.

Useful links

Project website: http://www.microfinance.org.vn

For more information, please contact Valérie Breda.