Village Development Funds in the GMS

In Guangxi, near the border with Viet Nam, a concrete slab was laid in a small village to give its children somewhere to play basketball. A long way to the east, a Dai ethnic man in southern Yunnan Province was able to buy 500 chickens to start a new livelihood. Down south to the Tenasserim Mountains in western Thailand, local people gathered on a royal holiday to plant trees to help restore a damaged forest. These are just a few examples of how people are using village development funds (VDFs)—revolving funds that provide low interest loans to local people in some of the poorest areas of the GMS—to improve livelihoods.

Since 2006, the CEP has set up VDFs in pilot villages in biodiversity conservation corridors to help the poorest households have access to cash in times of need, and to be able to seize livelihood opportunities when they arise. These isolated communities and their households have little or no access to formal lending: informal money lenders are an option, but the high interest rates that are charged often do more harm than good.

 

The CEP provided the seed capital to set up VDFs. Depending on the size of the village, fund amounts range from $5,000 to $30,000. Community members elect VDF committees who are then trained in basic financial management. The rules for lending are clarified and beneficiary households identified. In some countries, all the seed capital can be lent out, while in others it is capped, for example at 60% in Viet Nam. The amount each household can borrow, the repayment period, and the interest rate also varies between countries. Interest is usually 2%–3% a month. On occasion, the funds are used for community projects such as improving village roads, but far more common are loans to households for rice production, cash crops, and livestock.

 

VDFs are one of the most valued poverty reduction interventions in the CEP’s biodiversity corridors initiative. In Cambodia, the Lao PDR, and Viet Nam, more VDFs have been established since 2012 through the Biodiversity Conservation Corridors Project. Today, nearly 200 VDFs throughout the six GMS countries are helping prevent or reduce poverty for thousands of poor households living in the biodiversity corridors.

 “The money has really helped. I bought pigs with it and now farm them. Before I worked in construction, but this is much better.”
-- Villager in Genglao, Guangxi


Publish Date: 31st March 2018

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See also

GMS Working Group on Environment 24th Annual Meeting

1st April 2019
Event

The 24th Annual Meeting of the Greater Mekong Subregion (GMS) Working Group (WG) on Environment reviewed the achievements of the GMS Core Environment Program Phase II and discussed the way forward. WGE AM-24 was hosted by the People’s Republic of China’s Ministry of Ecology and Environment (MEE) with support from ADB through the GMS Environment Operations Center.

 

The WGE AM-24 was followed by thematic discussions that covered the proposed new programs entitled: "GMS Climate Change and Environmental Sustainability Program (CCESP)" and "GMS Sustainable Agriculture and Food Security Program (SAFSP)" which are aligned with three out of seven operational priorities of Strategy 2030 approved by the Asian Development Bank’s (ADB) Board in 2018.

 

The CCESP will focus on ADB Strategy 2030’s operational priority: tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability, while SAFSP will focus on ADB Strategy 2030’s operational priority: promoting rural development and food security. Both programs will support ADB Strategy 2030’s operational priority: fostering regional cooperation and integration.

 

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Consultation Workshop on GMS Sustainable Agriculture and Food Security Program (SAFSP)

3 to 4 April 2019
Event

GMS Sustainable Agriculture and Food Security Program (SAFSP): The proposed TA will build on accomplishments of the two phases of the Core Agriculture Support Program and support the implementation of Strategy for Promoting Safe and Environment-Friendly Agro-Based Value Chains in the GMS and Siem Reap Action Plan, which was endorsed by the GMS Agriculture Ministers in late 2017. The SAFSP interventions will focus on areas such as (i) climate-smart and gender-conscious agricultural value chains, (ii) food safety and quality, and (iii) water-food-energy nexus in a warming world (through the adoption of climate-friendly agricultural adaptation practices and technologies).

 

SAFSP will focus on ADB’s value addition in advancing the use of advanced digital technologies, leveraging investments and applying integrated solutions on the safe, environment and climate-friendly agro-based value chains in the GMS. The TA will assist GMS towards becoming a more integrated, prosperous, inclusive, resilient and sustainable subregion, by focusing on principles such as “food safety for all, climate-friendly agriculture, inclusiveness of small farmers, gender empowerment, corporate social responsibility, good governance, benefits for all GMS countries, and integration with ASEAN”.

 

The SAFSP will have the following themes to be implemented over 5 years:

 

      1.          Greening of agribusiness supply chains

      2.          Inclusive and gender-conscious food value chains

      3.          Financing climate-friendly agribusinesses

      4.          Food safety and quality standards, certification and traceability

      5.          Cross-border animal health and value chain development

      6.          Water for food security in a changing climate

      7.          Agricultural adaptation in the context of water-food-energy nexus

 

The Asian Development Bank (ADB) organized a workshop on the GMS SAFSP on 3-4 April 2019in Kunming, People’s Republic of China. The workshop was divided into six sessions, where each session discussed (i) key challenges for each seven themes, (ii)  current status (e.g. policies, building capacities and mobilizing investment for infrastructure), and best practices that could be replicated, (iii)  key priorities for action, and (iv) advantages or disadvantages in adopting a regional approach.

More than 80 participants attended. Delegates included senior government officials from 6ADB developing member countries, senior staff from international and regional development organizations, including ADB, non-government organizations, academia, and the private sector.

The agenda and presentation materials can be downloaded below.

 

More details
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