Local Societies and Rural Development
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Local Societies and Rural Development

Self-organization and Participatory Development in Asia

Edited by Shinichi Shigetomi and Ikuko Okamoto

The importance of community-based and participatory approaches to rural development in developing countries has long been emphasized. Rural people, who are economically and politically weak as individuals, can only participate in development projects when they are collectively organized. However, this is no easy task. This book aims to identify the mechanisms in each local society through which rural people can best organize themselves to meet their development requirements. It stresses the need to find local mechanisms that motivate and control the members of a new organization in order to achieve organizational goals.
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Chapter 3: Rural development in a multi-layered local system: a poverty reduction program case in Central Vietnam

Misaki Iwai


Similarly to other developing countries, the rural poverty in Vietnam has still been one of the social and economic problems to be urgently solved. The National Program for Hunger Eradication and Poverty Reduction (HEPR, xoa doi giam ngheo) was launched by the central government in 1998 and has strengthened under the national policy for Comprehensive Poverty Reduction and Growth Strategy since 2002 (Bo Lao Dong – Thuong Binh va Xa Hoi va UNDP 2004). Microfinance has the most important role to play in fostering sustainable development in the HEPR. Microfinance managed by a state-owned bank, or the Vietnam Bank for Social Policies (VBSP, ngan hang chinh sach xa hoi), which provides low-interest credit without collateral, is the main scheme of this program and has successfully provided credit to the poor and other social policy beneficiaries. The VBSP provides six programs of credit loan with the following objectives: (1) loans for poor households; (2) scholarships for poor students; (3) employment for the disabled; (4) loans for guest workers; (5) loans for living conditions1 improvement; and (6) housing for poor households. Microfinance in rural Vietnam has succeeded in achieving very high loan repayment rates. According to the VBSP’s website, the overdue rate among total outstanding loans to poor households was only 1.39 percent in August 2012, and at the end of that year total credit amounts for ten years rose to 113 921 billion VN dong.

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