Project Update - Revolving Loans in Bac Kan: first phase completed

In the period 2005-2006 the first phase of the Bac Kan Farmers’ Union Revolving Loan and Vocational Training Scheme was completed.

In the first phase of this project three communes were able to take part. Those three communes in the province of Bac Kan were Ha Vy, Dar Sao and Hoa Muc. All together 120 households accessed revolving loans provided by the project, with a total of 180,000,000 dong (VND, about AUD $15,000) borrowed by participants. The loans were scheduled for repayment one year after they were received.

At this stage of the project over VND 160,000,000 has been repaid by participants, with the rest expected to be returned within the next two months. Each participant was given a year to repay their loans, but because of difficulties due to water shortages or the time needed to make money from their particular investment, some have had to extend the deadline.

The rate of interest on these loans is 0.5%. The interest earned goes back to the commune, the commune authority and to the Farmers' Union, the local partner for the project. This goes to ensure the project will have funding for its next stage, that it will be able to deliver to more families, and that the management capacities of the local partner organisation will be increased to ensure the project continues in following years without APHEDA's assistance.

The total budget for this project was VND 302,000,000. The VND 122,000,000 not used directly in loans was used for training courses, local administration and ensuring each of the participants had access to relevant ongoing support. In Ha Vy commune 30 households took part with a total of VND 20,000,000 provided for loans. Dar Sao commune had 40 households with VND 60,000,000 provided for loans and Hoa Muc commune had 50 households participate with VND 100,000,000 in loans. The amount given for each loan depended on what project plan the participant decided on. As different production plans required different levels of funding, this accounts for the difference in proportion between the communes.

The production plans that each of the families selected varied greatly. Some chose to try their hand at pig husbandry, others at farming fish. Some decided to buy buffaloes with their loan while other chose to raise goats, cows or shrimp.

At the evaluation meeting for Hoa Muc commune on 9-10 February 2007 participants were able to share their experiences, difficulties and successes with the program. All the participants for Hoa Muc had managed to fully repay their loans by the time of the evaluation meeting.

Out of the 50 participants in Hoa Muc, 45 of them were able to rise above the poverty line because of the outcomes from their loans. One piece of evidence of what these loans have meant for participants is more than 70 extra tonnes of pork being put to market last year as a direct result of these loans. One woman who took part was able to sell four pigs for a total profit of over VND 3,000,000, making a profit of around VND 500,000 per VND 1,000,000 loaned.

Another participant decided to raise goats and found that they were relatively simple to maintain. The only thing that needed attention was their health care and that if this was kept to a good standard then he found he was able to make VND 2,000,000 profit from his VND 2,000,000 loan.

Some of the participants found that their success had been hampered by their choice of production. People who chose to raise shrimp or farm fish were adversely affected by a water shortage and were forced to abandon these plans. They then took up other forms of farming, but with less time and less money left. Due to this they were not able to as successfully complete their anticipated or revised plans. Some people's investment required more time for repayment, as they were not all designed to gain as speedy a result as others. For example raising a buffalo takes longer than goat breeding.

Some participants were able to mix and match their production plans as they found successes and difficulties along the way. Most participants were able to make a profit and, at the same time, develop a better understanding of how they can develop their farming techniques. Others will require further assistance in the next phase of the project. With the knowledge and training they have received so far, and will continue to receive, they will hopefully find more beneficial outcomes.

The main recommendation from the evaluation meeting in Hoa Muc was to extend the amount of time allocated for loan repayments and that more money be provided for loans. Participants felt this would enable them to engage in more complete and comprehensive production plans and help them achieve better returns.

The Next Phase...
The next phase of this project will expand and allow more communes to take part. The project also plans to spread some of the wealth created from the first phase and learn from the successes and failures in its original application. The next phase of this project is planned to start shortly in 2007.

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Last Modified: Wednesday, 21-Mar-2007 09:02:30 EST
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