Lending a Helping Hand for Safer Houses

Over the past decade, economic reforms in Vietnam have had a large positive effect on many families, while many activities were increasingly monetized. This growth and change are vital if families and the community are to achieve more stable and better living conditions. In turn, the improvement of family economies is vital for local and regional development.

But the often-tenuous improvement in family and community conditions is frequently eradicated by the destruction caused by the annual round of storms, typhoons and flooding.

Among the many changes in the past decade, a tangible change has been the increase in private expenditure in housing and small-scale rural infrastructure. Families have rebuilt a vast percentage of rural housing in recent years to replace previous thatch and bamboo houses.

Regrettably, this investment in new homes has not been matched by a parallel increase in their resistance to the effects of floods and storms. This weakness is largely because storm-resistant building details have been neglected. This level of vulnerability is unnecessary. Preventive action to strengthen community and domestic buildings is an effective and cost efficient manner of reducing economic and material vulnerability, and families and communities can do it themselves.

Development Workshop France (DWF) has implemented projects in Thua Thien Hue Province, central Vietnam, since 1999, to raise the prevention awareness among the population and decision makers, through animation, training and demonstration of housing and small public facilities reinforcement.

For housing, in the beginning, DWF provided a subsidy, combined with cash participation. But it has become clear that poorer families turn to local moneylenders in order to engage in strengthening their home. While this was a positive sign of commitment, it also created pressure on some families because of high interest rates exacted by informal lending.

In 2002, DWF organized a credit system for the families, combined with a partial subsidy of reinforcement works, in four communes.

The global credit scheme is managed by the Commune Damage Prevention Committee (the number of beneficiaries can be doubled with the revolving fund, as a part of the subsidy can also be allocated).

The available funds (credit/subsidy) are managed by the "family prevention group", organized at hamlet or village level (5 to 10 families). The group decides the priorities, and the allocation of credit/subsidy amongst the families.

The credit system for housing reinforcement has contributed to a real progress, and demonstrates that people repay short-term affordable loans for house strengthening even though this does not have a direct connection to income generation. This is because the safety of the houses and reducing vulnerability represent a key component in economic security.

Future projects must continue to demonstrate a credit system for those in most need, which can in turn encourage other donors and banks to make credit available.

The target is to achieve loan rates of up to 80% with low subsidy, (taking into account subsidies written into the loan system). In a commune, it is generally considered that until the poorer and most vulnerable families have been helped, a subsidy is needed to enable these families to strengthen their homes.

Transfer of prevention costs to the families DWF has encouraged a progressive shift from total subsidy (Phase 1, 1999–2000 Project), through a mix of project subsidy and family contribution (Phase 2, 2000–2001 Project), to a pilot loan program supported by the Fund Aids Vietnam - Canada and Canadian International Development Agency with 50% subsidy and 50% credit in 2002.

Guillaume Chantry is Project Coordinator, Development Workshop, Hue/Vietnam. He can be contacted at chantry@laotel.com or dwvn@dng.vnn.vn