Review of Projects Financed by the Vietnam Challenge Fund

The Vietnam Challenge Fund (VNCF) is an initiative financed by the Ford Foundation. VNCF provides financing for selected enterprises of the purpose of job creation and economic development, with geographic emphasis on remote and underprivileged areas. The financing by VNCF is to cover the risks born by the enterprises in investing in innovative business ideas or in less privileged regions. It enables enterprises to materialize the projects since without the financing, the enterprises would not have implemented the projects due to the too their high risks. 

The financing decision is made on the basis of fair and transparent competition between enterprises. VNCF was launched in March 2008 and has been managed by the Enterprise Development Foundation, VCCI. 

Phasclosoma esculenta farming in Quang Ninh - a project funded by VNCF

The overall objective of the Fund is to encourage the participation of the business sector into economic development, income generation, improve market access for the poor, and thus contributing to sustainable poverty reduction. The financing from the Fund serves as catalyst for enterprise to undertake new business ventures and to invest into innovation, creative business ideas. 

Higher risk business ventures, inspite of their high feasibility and innovative ideas, are often not preferred by commercial banks. It is in projects of this sort that VNCF has ventured in. To date, eight projects in different fields, e.g. fishery, agro-business, natural resource conservation, skill development, training, etc. in five provinces have been selected and received financing from the project. 

In order to improve the project performance and to spread the knowledge acquired from the process, Economica Vietnam has reviewed the eight projects financed by VNCF. Economica team has undertaken analysis on financial performance of the beneficiary enterprises, the financed projects, the emerging social and economic impacts, business models, innovativeness, and possibility for replication. 

The report has been be published by VNCF for the purpose of sharing experience and knowledge with other businesses, donors, governmental agencies and other stakeholders operating in the same area.