Money Pools (Hụi/Họ) in the Mekong Delta

Across Vietnam, and for poor people in particular, there is demand for loans that are below market rates and less risky than those given by private lenders. The rural financial sector in Vietnam presently has three sub-sectors: formal, semi-formal, and informal. All of these sub-sectors have provided poor households with microfinance services in different forms and approaches. While examining rural finance in Vietnam in general, this chapter pays particular attention to one aspect of it—the informal sub-sector. Through hundreds of years, informal saving has existed in every corner of Vietnam, from rural to urban, and is getting more diversified in its structure. However, until 2006, rotating savings and credit associations (ROSCAs) were not recognized as legal activities. While ROSCAs or money pools have brought positive results to a number of people, they have also been seen as an evidence of trust degradation and a rotten morality in many other cases. Based on interviews with local people, focus-group discussions, and government and non-governmental organization (NGO) documents, the authors examined the ROSCAs system in Vietnam. Findings show how popular ROSCAs have been in rural Vietnam, especially in the Mekong Delta, and that even though incidents happen, ROSCAs remain a good way for women in that region to create an income and to help their families out of poverty. This practice will keep proliferating through time, and help strengthen tight connections among local communities.