Overview of CEP Clients | CEP Vietnam - Quỹ trợ vốn cho người lao động nghèo tự tạo việc làm

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Targeted clients

Overview of CEP Clients


The target clients for CEP are the poor and poorest (as defined by CEPs poverty classification). Within Ho Chi Minh City this target group includes migrants from other provinces in Vietnam residing in HCMC without residency permits. The communities of primary focus in HCMC are those living in non-permanent living conditions in urban slums and less developed areas on the fringe of urban zones. In the provinces outside HCMC, CEP targets poor labourers living in non-permanent living conditions in villages, on the periphery of towns, and in rural areas.

Clients are prioritised on the basis of their poverty ranking, with a minimum of 80% of new clients coming from the poor and poorest categories as outlined in the table below. However, on-going CEP clients that graduate into the moderately poor category are still provided with credit until they choose to leave the CEP program. The table provides an overview of each classification, and permutations across categories commonly occur. To ensure that a minimum of 80% of new clients are from the poor and poorest categories, as part of CEP’s initial credit assessment of clients, each CEP branch records the poverty classification of all new clients.

In addition to the poverty ranking that CEP employs to identify clients, approximately 75% of new clients receiving loans are female. This is done to empower poor women by providing women with both greater financial responsibility and greater income-generating capacity. It also is done to increase the likelihood that all proceeds from the income-generating activity established with CEP credit will be prioritised on the primary needs of the household as identified by the woman generating the income.

The CEP client poverty classification categorises clients into poorest, poor and moderately poor on the basis of a composite indicator incorporating income, assets, housing condition, and dependency level. This indicator is used by CEP as a poverty targeting tool to ensure that CEP’s branches are providing their services to the poor. CEP developed this poverty classification system because it wanted to incorporate non-income based measures of poverty into its system to target clients, and because it could not use the predominately income-based measures that were being used in Vietnam in the 1990’s (due to the discrepancy between income levels and the cost of meeting basic needs across the different provinces of Vietnam). The income measure used in the CEP poverty classification is based on the poverty line set by the Hunger Eradication and Poverty Reduction program in HCMC, which is set at USD 2.60 per person per day (VND 21,000,000 per person per year for the period from 2016) with no differentiation made between urban and rural areas.

CEP Poverty Classification Summary

Household Classification

Dependency Ratio


(USD per day)




3 or more

Less than

USD 1.35

None to minimal, and of low quality

Low quality, non-permanent housing, lacking access to water / electricity



2 and 3

USD 1.35 –

USD 2.60

Old and of low quality

Low quality, semi-permanent, but with access to electricity / water

Moderately Poor

Less than


More than

USD 2.60

Low to medium quality

Permanent, owned outright, direct access to electricity / water



Vietnam is predominantly a rural society with agriculture providing the livelihood of the majority of its people. This being said, agriculture, forestry and fisheries as a share of GDP in 2012 only accounted for 20%, which has significant implications for rural poverty given the distribution of people weighted towards rural areas. An estimated 68% of Vietnamese reside in rural communities, though increased urbanisation and urban migration are causing this percentage to decline, with the resultant crowding of the cities and urban spaces creating significant issues of concern for policy makers and welfare agencies. The level of poverty in Vietnam is relatively high, especially in rural and marginal urban communities. According to the World Bank, in 2008 43% of households lived on less than USD 2 per person per day (adjusted for purchasing power parity), and the General Statistics Office of Vietnam reports that 11% of the population lived below the national poverty line in 2012 (which in 2012 was an average income of less than VND 530,000 per month in rural areas and VND 660,000 per month in urban areas). In terms of GDP, Vietnam is a lower-middle income country with a GDP per capita of USD 1,900 in 2013.   

In regard to other indicators of social development Vietnam fares relatively well in comparison to other developing countries. A life expectancy of 76 years; infant mortality rate of 18 deaths per 1,000 live births; maternal mortality rate of 67 deaths per 100,000 live births; adult literacy of 94%; and ranked by the UNDP on its human development index 121 out of 187 countries in 2014. However, the prevalence of HIV remains a concern in Vietnam and in 2012 0.5% of the adult population aged between 15 and 49 had contracted the virus.




The situation in Ho Chi Minh City and the surrounding provinces reflects that of the national picture, in that there is considerable poverty among a sizeable proportion of the population. Geographically, HCMC is located in the provinces of Southeastern Vietnam, with the other Southeastern provinces lying to the north and east and the Mekong Delta provinces lying to the south and west. In 2012 the General Statistics Office of Vietnam reported that 1.4% of the official population of the Southeastern provinces and 10.6% of the population of the Mekong Delta provinces lived below the national poverty line. However, estimates of the number of people living in poverty in HCMC and the surrounding areas based on the national poverty line are not truly applicable in an area where the living costs are considerably higher than elsewhere in the country. Consequently, in 2016 the HCMC authorities announced the poverty line in HCMC for 2016 to be VND 21 million per person per year (USD 2.60 per person per day). This is likely to be a conservative estimate of the number of poor households after incorporating the quantity of undocumented poor immigrants in the city.


Over recent years the level of urban migration within Vietnam has increased markedly. Official estimates of the population of HCMC are in the vicinity of 7.7 million residents (this figure is the 2012 population of HCMC reported by the General Statistics Office of Vietnam), however unofficial estimates have the population as high as 10 million. The difference between the two figures being the quantity of migrants in the city, many of whom have migrated from other provinces of Vietnam in search of employment opportunities and a means to support their families. These migrants are often among the poorest members of society and hence the actual proportion of people living in HCMC in poverty is likely to be larger than is reflected in official statistics.

In terms of the living standards of residents of HCMC and the surrounding areas, they vary markedly depending on location, with rural areas having generally less access to basic utilities such as potable water and electricity than do urban areas. Also, communities that are based in rural areas and those that have developed on the fringes of urban areas and industrial zones are likely to consist of housing made of non-permanent materials and lack access to basic services. 


Despite the significant economic and physical growth of HCMC and the surrounding areas over recent years a great many of the residents, whether they are residents of long established communities or are newly arrived from outerlying provinces, live their lives in a state of tremendous instability and poverty. The cost of living in such a densely populated area is very high and despite the perceived greater economic opportunities that exists it is very difficult for labourers and unskilled workers to generate sufficient income to support themselves and their families. In percentage terms the rate of poverty in HCMC and the surrounding provinces is lower than other parts of Vietnam, though due to the large concentration of people living in the area and the higher cost of living, the absolute number of poor people living in the area remains considerable.

It is in the context of such large numbers of people living in poverty that CEP implements its mission of poverty alleviation, through community development and the provision of saving and credit services. The geographical focus of CEP is HCMC and the surrounding provinces, encompassing both rural and urban districts. The high concentration of the poor in HCMC, undertaking economically marginal activities in order to sustain themselves and their families, taken together with the increasing urban migration of unskilled labour, adds to the growing demand for the types of social assistance that CEP provides.



14C Cach Mang Thang Tam St., District 1
Ho Chi Minh City - Vietnam
Tel: 84 - 028 – 38 220 959 / 38 239 100
Fax: 84 - 028 – 38 245 620
Email: cephcm@cep.org.vn

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