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Fellows Blog

Stories from the field
 By Jon Fung 7 Questions on Growing Social Enterprises in Vietnam 

What inspired you to found CSIP?
It's been a long journey. After earning degrees in philosophy, sociology, and anthropology, my life has been focused on helping people and working as a development officer for many organizations.

In 2004, I went on a field visit in An Giang province. This was my first time having direct interaction with successful entrepreneurs. At that time I worked for ActionAid International, and then later with UNICEF in Vietnam. I got to know the founders of The One Foundation very well since they were both donors and funders. We shared our dreams, and our struggle on how to make development work more sustainable, effective, efficient, and innovative.

In late 2007, I learned about the concept of social enterprises and I was very inspired. It sounded wonderful to integrate a social mission with an entrepreneurial approach. I was also inspired by businesses in Vietnam such as KOTO International (based in Hanoi) and Mai Handicraft (based in Hochiminh City).

I quit my job at UNICEF in 2008 and with initial funding from The One Foundation, I was able to start CSIP. Our mission is to promote and grow the social enterprise sector in Vietnam. I would like to see more grass-root social and economic initiatives turn into social enterprises to bring impact to disadvantage population at a scale. Social enterprise is a vehicle for people to achieve their social goals. Changes need to happen here, and now is the right time. Civil society and NGOs need to adopt a more meaningful, sustainable, and efficient approach to business.

Looking at the profiles of SEs that CSIP has worked with in the past, it appears to be a very diverse mix. You've worked with people whose businesses focus on everything from HIV healthcare services to solar powered cookstoves. How do you choose which SEs to support?
We select them not by industry, but by the impact that they can bring to society. There are three key things we look for: Just a handful of the 40+ social entrepreneurs CSIP has supported over the past 4 years

What kinds of training does CSIP provide to SEs?
We work with startup SEs, so they are lacking many business skills. We start with very basic things - what is different about an SE vs. a normal business. We also talk about how to position themselves, what kind of skills and knowledge they need to build to succeed. One of the courses we teach is on financial strategy. Leaders need to know how to manage their financial perspectives and create a sustainable model for their organization.

We also emphasize marketing and HR development, which is very demanding and challenging for many organizations. In CSIP’s operating model, SEs are the core and we also have people working on SE support, fundraising, and mass media attention. Ms. Dinh Thi Huyen, founder and CEO of North West Development Company, which aims to create decent jobs for low income ethnic minority women, received CSIP’s award “Start-up Social Entrepreneurs 2010"

What are the biggest challenges faced by social enterprises in Vietnam?
The biggest challenge is the capacity in terms of business skills and knowledge. It is also hard for these entrepreneurs to market their products and service well.

The second challenge is capital. It has to be the right amount of money at the right time. SEs have different capital demands at different stages of development, and we need to build an SE ecosystem for the capital market to engage funders and lenders to fit the needs of each SE.

You've been advocating the development of the social enterprise sector to the Vietnamese government. How receptive have they been to your ideas and the role of SEs in Vietnam's development?
In some countries, like the US for example, government involvement is very limited and modest. They have strong entrepreneurial spirit and it can grow naturally. In a country like Vietnam, which operates in a very specific context, it's very hard to make things happen without permission and acknowledgement from the government.

If you do good things on a small scale, it's difficult to replicate if we don't have government support, as well as recognition from other big players (civil society, the donor community, mass media, etc). This is why we're targeting the mass media to raise awareness with these other big players. We need the government to recognize first, then support later by providing legal framework and policies. Advocating with the government is very important in Vietnam where we have to build from the bottom up and top down.

For example, from the bottom up: CSIP has worked with 40 SEs in the last 4 years and we have another 200 on our list. Social enterprise at the individual level is a movement. They may already be acting like one, but aren't recognizing themselves as one.

If possible, we need to have a specific strategy from the government to grow social enterprise in Vietnam – this is the top down. We want to see government officers start to talk about social enterprises as an innovative approach to address the country’s social and environmental issues.  It's starting to happen now. We’re working with the British Council for policy advocacy to see if it can help the government to better implement new policy, like laws for people with HIV and disabilities. What is your vision for CSIP? Where do you hope to be in 5 years?
CSIP is a pioneer in building the field of social enterprise in Vietnam. I want to see that social enterprise is well recognized across the sector and by the big players, embedded into government policies, and also embedded into civil society as part of the business. I hope that SEs can become reliable and trustworthy partners to the government, and to see organizations deliver on their social mission. Engaging more corporations to share knowledge and resources would also help SEs make things happen.

By the late 2000s, Vietnam has gradually lifted up to become a middle income country, and the amount of international aid will drop. Vietnamese programs need to be self-sustainable, and social enterprise should be one option for people to consider if this is to be the right time.

What role do you see Kiva playing in the social enterprise space?
CSIP’s vision is to create a capital market ecosystem in Vietnam. So far we have existing donors in Vietnam who provide grants, but Kiva is a new financial scheme for social enterprise. It is easier compared to some other impact investors who could expect a 20% interest rate. Kiva’s funding scheme is more suitable for early stage enterprises, which is wonderful. I love the philosophy of making funding more democratic between the lender and borrower. And the money, too! (laughs)

For more information on CSIP and their work with Vietnamese social enterprises, watch this video:


 

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