Microfinancing Project      

Tran Binh Dinh

Mission

Our objective is to sponsor and help micro entrepreneurs, farmers and working poor people to make great strides towards economic independence by provide working capital to generate more income for their households through NTHF micro lending service program.

The Recipients
This project will focus on the needy people in Viet Nam that fall into this category.

• Small businesswoman
• Household based micro-enterprises
• Farmers
• Self-employed
• Working people

These people are in needed capital to increase productivity of their existing assets such as re-supply their inventory, purchase more livestock, fertilizer and/or insecticide for their farm, etc.

Objective Analysis
Micro lending service program will assist its borrowers to overcome their daily hardship by providing them an opportunity to accumulate income-generating assets which could be turned into productive assets.

Micro lending service program development is critical because access to financial services is an important factor in the accumulation of capital among poor people and has been shown to reduce vulnerability to extreme poverty.

After Viet Nam entering WTO, people have been expecting the government to ease economic controls and made room for private enterprise, and there will be more opportunities for people adapt to the new economic system. Especially in the financial sector, however accessing to financial service institutions is very limited to the poor, the majority of the poor have continued to face limited access to financial services and where these services are made available they are often at very high cost.

NTHF micro lending service program will assist its recipients to overcome this matter.

Short term objective

We’ll establish the infrastructure for micro lending service program within six months from the commencement date. Once the infrastructure is in place, the pilot program will be launched. Our goal is the next phase of lending will no longer depend on our budget. But, the program will continuously self growth and expand. In order to achieve this objective, we will adapt Kiva’s business model and deploy it to our lending service program. Once the lending service program is working well, joining with Kiva.org is the next step.

Joining with Kiva.org we’ll achieve three main objectives:

• We’ll no longer fund this program alone.
• With this project, we’ll build a mutual partnership with loaner as well as borrower in the long run.
• Being partner with Kiva.org, we’ll have our presence in the world community.

Resource Projection

Because we initiate this program, therefore funding for this program depends on NTHF and its budget availability. My research for this type of loan is average $500.00 dollars for each recipient. In order to achieve the best result, my suggestion for the initial fund will be $5,000.00 dollars.

This program’s aim is to provide working capital for people who are in needed to increase the productivity of their existing assets and to generate more income for their household, using other materials to alternate for monetary are not yet considered at this time.

For this project successfully, every one in the board of directors will be involved. But to satisfy our multi-tasks, we should elect two people to dedicate for this project with 100% support from the board of NTHF.

Implementation

Collaborating with any organizations and people in Viet Nam is essential for this program, because we need to establish a network of community-based business development officers to support loan clients, assist in loan recovery and identify potential new clients.

We’ll have five different types of business loans and two different types of loans to give to each business, short term and long term loan, the

durations for repayment the loan are: short term loan is six months and long term loan is one year. The re-payment for short term loan is paying off

the loan at its maturity date, and long term loan is monthly payment.

It is vital that we intensify the pace of implementation. There are no “off the shelf “models for the implementation of micro-lending for poverty alleviation in Viet Nam under present condition. It is important that we proceed to implement the pilot program as soon as possible, so we can benefit from the evaluation and 'learning by doing' on our own soil.

Risk Factor
The lending service program is an alternative for the charitable donation program; therefore, the risk is much minimized and will not effect to our ultimate goal.

Note:

* Short Term Loan
** Long Term Loan

September 21, 2007