On November 28, 2012 in Hanoi, the Vietnam Business Challenge Fund (VBCF) was officially launched with a total fund of £7 million (US$11.2 million). This continuation programme is financed by the British Government via the Department for International Development (DFID) to promote innovative and sustainable business innovations involving low-income people.
In fact, outstanding economic achievements have made Vietnam a middle-income country, but the income gap and inequality remain increasingly pressing challenges. A lot of Vietnamese people, especially in the countryside, do not have access to market opportunities, income and basic services. Therefore, supporting low-income people becomes very important in the current difficult period, domestically as well as internationally, to maintain achievements reached and create opportunities for more sustainable development.
Speaking at the ceremony, Deputy Minister of Planning and Investment Dang Huy Dong said the strength of VBCF lies in creative access and deployment. Low-income people participate in companies’ business chains in the role of suppliers, employees, consumers and distributors on the basis of mutual benefit. This double benefit is becoming a global trend with popular concepts like "Business with low-income people" or "Sharing values".
Ms Fiona Louise Lappin, Head of DFID in Vietnam, said the launch of this second large-scale Vietnam Challenge Fund (VCF) reflects trust in the approach. The impressive impacts of the first Vietnam Challenge Fund shows the great creativity and innovation of the private sector in Vietnam. VBCF can help private enterprises turn their ambitions into real business initiatives. The fund also creates job opportunities and raises income for the poor as it states in the slogan “VBCF: Rich for business, good for community." Development benefits include employment, income increase and access to basic goods and services.
VBCF Managing Director Javier Ayala stressed that the economic development of the private sector in Vietnam is marked by remarkable growth, largely due to foreign investment, increased export, industrialisation and transition from an agriculture-based economy to an economy based on value added products. VBCF will open up an opportunity to approach the low-income market, create sustainable development of the private sector, and eradicate poverty. The very challenges and opportunities of doing business with low-income people help private companies to exploit the low-income market, which is estimated to make up more than half of the Vietnamese population, to provide affordable goods and services, create job opportunities and improve incomes that they do not have access to.
He said VBCF will award grants to provide partial technical, consulting and financial support, up to 49 per cent of accepted proposal budgets. The funding scale will depend on innovation, sustainability and commercial feasibility, and especially the potential social impacts of the project. The VCBF contribution can reach up to US$800,000 for a particularly promising project. VBCF will focus on three key areas of Vietnam’s sustainable development and pro-poor growth, namely agriculture, low-carbon growth, and small-scale infrastructure and basic services.
As regards small-scale infrastructure and basic services, VBCF defines this aspect to also include other necessary civil works. This aspect plays an important role in the success of any economy and this is also the priority of Vietnam’s socioeconomic development strategy towards 2020.
|
VBCF is administered by SNV Netherlands Development Organisation, an international organisation of sustainable business models for low-income people. VBCF is supported by the Vietnam Business Council for Sustainable Development (VBCSD),Vietnam Chamber of Commerce and Industry (VCCI), and the Spark Business Development Centre (SPARK Centre). VBCF is built on the success of the recently ended Vietnam Challenge Fund (2009-2012) and is financed and managed by the British Government and the Asian Development Bank (ADB).
|
Statistics show that although 97 per cent of population have access to electricity, the service is unstable or price is unsuitable for the people. Up to 70 per cent of rural population cook with biomass energy sources other than cheaper clean energy. VBCF is looking for initiatives that benefit low-income communities by helping them with access to clean energy, cost savings and livelihood improvement through more environmentally friendly production methods. Some business models are successful in Vietnam and other countries, like the production of ceramic water filters, solar energy technology, smart hydropower, and biogas initiatives.
In agriculture, VBCF defines agriculture to include farming, animal husbandry and fisheries. Opportunities for businesses in this market are the development and implementation of innovative models to: Increase revenue by increasing crop productivity; improve the sustainability of agricultural production and international market access; and enhance competitiveness by creating valuable products.
The Vietnam challenge Fund (VCF) was established in 2009 as a new financial instrument at that time to provide non-refundable grants for innovative projects undertaken by businesses with the aim of improving the participation and benefit of the poor in agricultural value chains. Ended in August 2012, VCF had supported 11 projects, of which seven were successful. Initial results show that 16,900 people had improved incomes and livelihoods and more than 2,100 jobs were created by VCF-funded projects.
Thu Ha
Source: Vietnam Business Forum
