Sowing the seeds of social investment in Vietnam

Monday, October 7, 2013

An Duong Craft Cooperative provides jobs and vocational training for women who are disabled, poor or HIV-positive in Vietnam’s third largest city, Haiphong. Unemployment is high and job choices limited for the city’s women and 27,000 disabled residents, so the salaries and training An Duong has given its 500 current and former employees have often provided a significant boost to their family incomes and social status.

Founded in 2004, this social enterprise produces traditional handicrafts, furniture and fashion for the domestic and export markets. An Duong’s revenue reached £113,000 in 2012, up 38% year-on-year, and turnover is expected to reach £180,000 in 2015. As part of its growth strategy, it plans to invest £108,000 to build a new factory and retail stores, train workers, and build housing for its disabled staff. It can cover 40% of this total expenditure but seeks investment funding to cover the balance.

The challenge An Duong faces is how and where to obtain such funding. In this, it is not alone. All the social enterprises that participated in a recent investment needs survey will seek external capital in the next three years, but 95% believe that securing investment will be a challenge. Conducted by Centre for Social Initiatives Promotion (CSIP), Vietnam’s leading social enterprise intermediary, and LGT Venture Philanthropy, a Lichtenstein-based social investor, the survey found a number of barriers to securing investment. These include the modest amount of external funding sought by Vietnamese social enterprises, which falls well below the USD $1m minimum threshold that most impact investors apply (given the cost of due diligence and legal fees). Other reasons include uncertainty among social enterprises about available funding sources, funding requirements, and standards for financial statements and operation plans.

Source: The Guardian (link opens in a new window)

social enterprise