Climate change impacts on Microfinance – Case study: The Mekong delta in Vietnam

This post is also available in: Tiếng Việt (Vietnamese)

It is widely agreed by the scientific community that climate change is already a reality worldwide. The multifaceted impacts of climate change are affecting the livelihoods of microfinance institutions’ (MFI) clients and undermining the sustainability of MFIs. According to the Ministry of Natural Resources of Vietnam (2009) and the Inter-government Panel on Climate Change (2007b), the Mekong Delta in Vietnam is identified among the three areas in the world most affected by climate change. However, limited research has been done on the impacts of climate change on microfinance and their clients, especially in the Mekong Delta in Vietnam.

To raise the awareness of different microfinance stakeholders on the impacts of climate change to MFIs and livelihoods of their clients, the Vietnam Microfinance Working Group has commissioned this rapid qualitative study in the Mekong Delta to provide insights into the issue.  The study looked at a sample of three MFIs operating in Long An, Tien Giang, and Soc Trang provinces in the Mekong Delta in Vietnam.

Readers will find in this report (a) the description of the recent trends of the weather phenomena based on both scientifically recorded data and observations by the locals in the study areas, (b) perception of the clients of MFIs on how the weather abnormalities have affected their livelihoods, and (c) the current projections of climate change and sea level rise for the Mekong Delta to the end of the 21st century.

Based on this information, the report presents recommendations to enhance the sustainability of MFIs and reduce the vulnerability of MFIs and their clients to climate change.

As this is a rapid qualitative study, although it discovers issues and generates insights into the issues, due to the small size of the sample the scale of the issues have not been assessed.  To quantify the magnitude of the issues requires further studies.

The VMFWG hereby presents the report to the readers.  We welcome your comments and ideas for improvement in the next studies.

Please download the research report here: here