Microfinance Program:
Vy Da Ward, Hue City
sponsored by DOVE Fund

The Vy Da Ward, Hue City Microfinance Program is the first of Hearts for Hue’s Microfinance Projects. It was established to assist fishing households achieve sustainable financial independence through the provision of loans for small enterprises. The programme also develops the capacity of marginalised members of the community to improve their livelihoods with training and education programs.

With an initial budget of US $35,000 this Program is sponsored by DOVE Fund, a non-profit organization, founded in 2000. DOVE aims to provide humanitarian and development assistance to the impoverished areas of Vietnam.

The interest rate charged in Vy Da is just 1% per month. This is lower than commercial bank rates.


Case Study


Program Evaluation: 

During 2019, H4H conducted a comprehensive review of our microfinance programmes, using best practice evaluation in the microfinance industry, as developed by the World Bank (see here for technical details).

We are proud of the results which show that our programmes are highly effective by global standards and that they have continued in their mission to serve the poorest. Moving forward, we will update and publish the results of this evaluation process every six months.

This evaluation is correct as of July 2019.


Default Rate

Our default rate is 0%. Since the beginning of the program in 2011, there have only been two instances of default, both occurring due to illness or death in the family. The loans were then forgiven at the discretion of H4H.


Portfolio at Risk (30 Days)

Our PAR(30) is 0%. No borrower is more than a month in arrears in repayment.


Financial Self-Sufficiency

H4H has been serving borrowers in its microfinance program since 2011 and we are committed to serving borrowers for many years to come. For this reason, the program cannot be making a loss.

To assess the financial self-sufficiency (FSS) of the program, we take the ratio of the total program income to total program costs, including inflation costs. A ratio of above 100% indicates the program is self-sufficient.

Since 2013, the program has been self-sufficient.

Retention Rate

For microfinance programs with very low default rates, an important indicator of the health of the program is the retention rate of borrowers. That is, the per cent of borrows who decide to take a new loan with us after repaying their current loan.

Our retention rate over the last year remains high. The average retention rate from round 1 to round 2, round 2 to round 3 and so forth to round 6 is around 80%.


Number of Borrowers

The number of program beneficiaries is capped by the available finances for the program. There is a waiting list for new borrowers, and these will be served when funds become available.

The programme currently has 289 borrowers.

Client Poverty Level

At H4H, we have strict screening mechanisms to ensure that we are serving the poorest clients. Nevertheless, “mission drift” (when a microfinance institution drifts from serving the poor to profiting from the poor) is something we must avoid. Therefore, we look at the average outstanding balance per client over time. It grew a little in the early years, as borrowers shifted from the 1st to the 2nd (and subsequent rounds) but now that our composition of borrowers in each round has stabilised, the average outstanding balance per client has not changed by much.

Furthermore, the average outstanding loan balance per client, is just 7.5% of Vietnam’s per capita GNI. These two indicators strongly suggest that we have not drifted from our mission to serve the poorest. 

Cost Per Client

The cost per client is calculated as the total personnel and administrative expenses incurred by H4H divided by the total number of clients.

It is currently the lowest it has been in 2 years at 599,133 VND per client per year (or 27 USD per client per year).

This translates to an annual operating expense ratio (calculated as the total personnel and administrative expenses divided by the period-average gross loan portfolio) of just 12%. This is very low compared to the international standards for microfinance programmes which is around 19%.


Hearts for Hue believes in complete transparency. Please contact us for a copy of the de-identified repayment history of every loan given in either of our programmes. For the benefit of microfinance clients, H4H encourages other microfinance providers to provide the same.