The Vietnam Business Challenge Fund (VBCF) is a specialised fund initiated and capitalised by the United Kingdom Department for International Development (DFID). VBCF will provide technical assistance, mentoring and non-reimbursable funding of up to 49 percent of the total investment in selected projects through competitive open applications. VBCF recently organised a seminar to call for businesses to submit production and business plans. Being a communication partner of VBCF, VBCSD in collaboration with the Vietnam Business Forum interviewed Mr Javier Ayala, Executive Manager of Vietnam Business Challenge Fund (VBCF). Thu Ha reports.
Can you talk more about the VBCF? What are the differences between VBCF and recently completed Vietnam Challenge Fund (VCF) and other funds?
The overall purpose of VBCF is to support the private sector in Vietnam to develop innovative Inclusive Business models that deliver both commercial benefits for the private sector and measurable social benefits for low income population, in terms of job creation, income improvements and availability of more affordable goods and services. VBCF is funded by the UK Department of International Development (DFID) and managed by SNV.
In the case of the VBCF, besides agriculture, new sectors are included now like Low Carbon Growth and Infrastructure & Basic Services. Furthermore, the size of the fund now is US$11 million. Of course, the expected social impact is also more ambitious in terms of job creation, income increase and basic services access.
Compared to VCF, which is engaged with State and private owned enterprises, VBCF is going to focus only on private enterprises or those with less than 20 percent of state contribution. What do you think about this?
The VBCF mandate, as defined by DFID, is to promote inclusive business opportunities in the private sector working with companies operating in Vietnam. We would like to help to remove barriers and improve the operation of value chains to facilitate inclusion of low income people in the core business of participating companies and also to overcome business risks and reduce transaction costs associated with Inclusive Business.
Why does VBCF choose three fields, namely Agriculture, Low-carbon growth, Infrastructure and Basic Services, for your assistance? What do you expect for the success of these fields in Vietnam?
According to DFID experience these three sectors represent remarkable market-driven opportunities for measurable social impact in terms of job creation, income increase and basic services access. In terms of job creation and income increase we expect these will be driven by the Agriculture sector, mainly. At the same time, Low Carbon Growth, Infrastructure and Water & Sanitation will promote important social impact in order to ensure affordable and better access to goods and basic services for low income population.
What kind of business model will be supported by VBCF?
VBCF will support business models that demonstrate the following key factors: Innovation, Inclusiveness and Commercial Viability. We are looking for companies willing to follow the global trend for inclusive business and social entrepreneurship, creating a competitive environment and an improved business climate in Vietnam.
So what are plans of VBCF in the coming time?
In the short term we already published the call for proposals. Companies need to submit the executive summary of the inclusive business plan on January 28th, 2013. After that we will conduct an screening and selection process and then shortlisted companies will be asked to submit the full inclusive business proposal. For more information we encourage companies to visit our website: www.vbcf.org.vn
VBCF capitalized at £7 million is managed by the SNV Netherlands Development Organization.
The VBCF is designed to support the private sector in Vietnam to develop innovative business models that deliver both commercial benefits for the company and social impact for the low income population using Inclusive Business models. Inclusive Business models generate profit for companies by bringing low income populations into the core business of the company as employees, producers, distributors and/or consumers. Profit is generated by increased efficiency in the business or the creation of new markets. At the same time, the low income population benefits due to opportunities for jobs, increased incomes or an improvement in their quality of life. In this way, Inclusive Business models are win/win.
VBCF is specifically looking for inclusive business models that are: Innovative; Inclusive and Commercially viable.
The VBCF is built on the success of the recently completed Vietnam Challenge Fund (2009 – 2012), also supported by the UK.
Source Vietnam Business Forum
