Vietnam sets up fund to support pro-poor business projects

The Vietnam Challenge Fund to lend to business start-ups that will directly benefit the poor was launched in Hanoi November 10 with a corpus of US$3 million.

It will focus on agro-processing linkages with the poor but will expand to other areas like infrastructure services if the start is successful.

The ceremony of the Viet Nam Challenge Fund, supported by the Ministry of Planning and Investment, the UK’s Department for International Development, and the Asian Development Bank., held in Hanoi yesterday

It will initially fund innovative projects by businesses that aim to improve poor people’s participation in and returns from agricultural value chains.

It will provide grants to encourage investment in different points along agricultural value chains, from production through increasing penetration of products in the domestic and international food retail systems.

The size of the grant will be $30,000-250,000, with a maximum of 49 per cent of the total investment.

The projects will be selected through a competitive process by the fund’s independent appraisal panel.

The fund is a major component of the "Making Markets Work Better for the Poor Phase 2 " (M4P2) initiative, supported by the Ministry of Planning and Investment, the UK’s Department for International Development, and the Asian Development Bank.

The intended outcome of M4P2 will be wider application of the M4P approach in Viet Nam, through replication, institutionalization, and capacity building.

By Hong Nhu

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