Microfinance from VBSP helps young entrepreneurs in Thanh Hoa

A young entrepreneur in Thanh Hoa at his farm, set up with the help of VBSP

Young people in Thanh Hoa often leave their hometown for work opportunities in major urban areas. However, many people under 40 years of age decided to stay at home and set up their own business – usually micro-sized household businesses. At least 1,500 family-owned companies have been established by young people, who take up half of the working population in the province.

A significant challenge to this entrepreneurial dream is lack of capital. Young people find it difficult to take out loans for their new business, which in turn also limits their ability to hire new employees. It is estimated that 35,000 young people in Thanh Hoa do not have a stable job and 25,000 college graduates cannot find employment yet.

To help young people achieve their goal of setting up a business and find a job, VBSP and the Thanh Hoa Province Youth Union have carried out a microfinance programme designed for young entrepreneurs between 2017 and 2020. After a year, this programme has helped 229 young people in the area to find jobs and financed 118 projects with a total of VND10 billion ($434,800).

Among the loan recipients is Hoang Anh Son in Thach Thanh district, who received help to launch a small factory with his family. Son specialised in mechanical engineering and has so far hired eight employees for his business. Nguyen Hoai Chau in Hau Loc district also received VND350 million ($15,200) for his food manufacturing firm, securing jobs for seven employees, and Pham Van Chau in Ngoc Lac district spent VND300 million ($13,000) of loans on expanding his husbandry business with six staff members.

Most notably, Trung Thanh JSC from Nong Cong district received a preferential loan of VND1 billion ($42,900), which was spent on hiring 40 employees on top of 32 staff members already working at the company.

Tran Ngoc Quang in Thach Thanh district expressed his gratitude for the loan package, saying that without the financial assistance, he and his family would not have had enough capital to expand their small farm. Two years after receiving the loan, Quang’s farm now incorporates agriculture, husbandry, and forestry and the family hires seven full-time employees for the upkeep.

Ta Van Phuong, deputy head of the VBSP transaction office at Thach Thanh district, was elated that VBSP microfinance has helped young entrepreneurs in Thanh Hoa fulfil their dream. Importantly, these young entrepreneurs were able to hire new people to expand their business, helping Thanh Hoa solve its unemployment problem.

“However, we still need to collaborate with other organisations besides the Youth Union to offer a comprehensive solution for young people in Thanh Hoa,” said Phuong.

By Nam Phuong - Vietnam Investment Review