Is Microfinance a Potential Solution to Extreme Poverty of Ethnic Minorities Inhabiting the Central Highland of Vietnam?

Is Microfinance a Potential Solution to Extreme Poverty of Ethnic Minorities Inhabiting the Central Highland of Vietnam?

Global Studies

Since the economic reform "Đổi Mới" in 1986, Vietnam's economy has made remarkable progress, which has increased Vietnam’s standard of living significantly. However, the additional wealth has not been shared equally between ethnic groups. The ethnic Vietnamese majority, known as the Kinh, have a poverty rate of only 9 percent, while other ethnic groups have a 51 percent poverty rate in 2010. Among the most impoverished are the Degar, also known as Montagnards or Highlanders, the ethnic minorities that inhabit the Central Highlands of Vietnam. Several Vietnamese social scientists and policy-makers share a common belief that the persistent poverty of the Degar can be explained by alleged shortcomings in the cultures of ethnic minorities. However, by examining the consequences of significant events in the past that still haunts the development of the Degar till today, I will argue that the poverty experienced by the Degar is being conditioned by social and political factors. The second part of the paper explores the potential of microfinance as a tool for poverty alleviation. Despite its potential, the microfinance industry in Vietnam is faced with several constraints that limit its impact such as low interest rate set by state-owned banks and the legal framework surrounding the operation of Microfinance Institutions.

Ngan Tran

Senior Showcase Oral Presentation

Ripon College

April 18, 2017

The author reserves all rights.

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English

Majors: Global Studies and Economics
Minors: French and Mathematics