Frequently Asked Questions:


1. What is the VBCF?

The Vietnam Business Challenge Fund (VBCF) is a specialised fund designed to support the private sector in Vietnam to develop innovative models that deliver both commercial benefits for the company and social impact for the low income population.

The mandate of the VBCF is to develop models that deliver both financially sustainable returns for the private sector and developmental benefits for the low income population. Developmental benefits include creating jobs, increasing incomes and improving access to basic goods and services.


2. What is the size of VBCF investment?

Total VBCF funding to be dispersed is approximately 7 million pounds. 

The VBCF will provide non-reimbursable funding of up to 49% of the total investment in selected projects up to a maximum of US$800,000    

VBCF will provide funding based on the following ranges:

Min : USD 100,000

Max: USD 800,000

The VBCF’s investment will depend on innovation, business viability and largely on social impact potential of the selected projects.


3. What kind of return VBCF is expecting from its investment?

Funding from VBCF is non-reimbursable. The return VBCF is looking for is not financial (in $), but sustainable social impact such as:

  • Jobs created for low income people
  • Income improvement for low-income family
  • Affordable goods and services for low-income people


4. What is meant by the “innovation” requirement?

The VBCF interprets “innovation” to mean “something new in Vietnam”. It could be new technology to be applied, a new product or services to be offered, a new way of organising the supplier’s network or a new way of incorporating low-income people in the value chain.


5. What is the minimum impact achievement that the applicant must target? 

We expect the small size project (USD 100.000 investment from VBCF) will benefit preferably thousands but at least hundreds of beneficiaries. The higher impact outreach, the better a project proposal is evaluated.


6. What kind of companies and projects are eligible to apply?

In order to evaluate and select Inclusive Business Executive Summaries, the first filter to be applied is the review for compliance to the following criteria. VBCF grantees should fully meet all the following criteria to be eligible for assessment:

  • The business proposes to work with poor people in Vietnam either as suppliers, distributors, producers and/or consumers for mutual benefits of both the business and the low income segments of population.
  • Investment proposals should be relevant to any of the three sectors of application (agriculture, low carbon growth, infrastructure and basic services), and address one or more of the challenges established by the VBCF second call for applications.
  • The business, and/or its main shareholders or management team should have proven experience of at least two years, in a relevant sector to the proposed project. The two years will be counted until the date of submission of the Inclusive Business Executive Summary, and individual experience should be full time equivalent.
  • The applicant business is able to finance at least 51% of the project budget.
  • The applicant business has one of the following legal status:
  1. Private and Limited liability companies (LLC) registered and operating in Vietnam
  2. Joint stock companies (JSC) registered and operating in Vietnam
  3. Cooperatives registered and operating in Vietnam


7. What are the sectors the VBCF is targeting?

Click here for a breakdown of the VBCF’s target sectors.

In addition applicants can submit cross-cutting inclusive business ideas that connect with more than one of the three sectors.


8. What are the sectors where the VBCF will not invest?

 VBCF will not invest outside the three targeted sectors of (1) agriculture, (2) Low carbon growth and (3) infrastructure. Eligible business ideas should specifically address one or more of the challenges defined for the call for applications.


9. How will the project proposal be evaluated?

We will use a standardised set of assessment criteria to evaluate key elements of the Inclusive Business Executive Summary and Full Business Plan proposal, including:

  • Compliance with the eligibility criteria;
  • The innovation of the project;
  • Long term commercial feasibility and sustainability;
  • The number of low income beneficiaries and the level of benefit. Projects with large (thousands of beneficiaries) and medium (hundreds to a couple of thousands) scale impact potential will be prioritized by VBCF;
  • The cost effectiveness of the investment: The social impact valuation should be greater than the requested funds to VBCF.
  • No environmental harm or negative impact is generated by the project;
  • Assurance of gender equity of beneficiaries. Those projects with more than 50% of women’s participation will be positively evaluated;
  • Up-scaling potential. Those projects with proven potential for significant scale ups will be positively evaluated;
  • Business’ capacity (financial and technical) to implement the investment needed for the project. Those applicants with a private co-investment greater than 51% will be positively evaluated.

The short-listed applicants will be asked to develop and submit a full inclusive business plan.


10. What will the applicant have to invest as counterpart funding?

  • The applicants must be able to demonstrate their commitment and financial capacity to the project by contributing a minimum of 51% of the total inclusive business investment size. Those applicants with a higher contribution ratio will be positively evaluated.
  • The VBCF will not consider pre-existing investments and pre-existing capital expenditures older than January 2012 as counterpart funds from companies. Companies will need to demonstrate this with verifiable evidence.
  • The VBCF will not consider as an investment counterpart from companies, funds and/or financial resources from third parties like NGOs or other non-profit organisations.
  • At least 50% of the private business investment has to be in cash.


11. How will the funding be dispersed and what will be covered?

  • A maximum of 49% of the total investment size will be financed by VBCF funds.
  • VBCF will operate on a reimbursable basis against the milestones achieved by the business implementing the project; VBCF will refund pre-approved budget items spent in accordance with the approved VBCF investment proposal.
  • The VBCF non-reimbursable funding can be used to finance both public and private items in the selected and contracted projects. Those applicants directly investing VBCF Funds in favour of the low-income population, via training and technical assistance, supply of equipment, inputs, infrastructure, amongst others will be positively evaluated

At the same time the following are not eligible for the VBCF non-reimbursable funds:

  1. Purchasing and rent of land or existing buildings;
  2. Leasing of equipment, land and facilities;
  3. Bank charges, cost of guarantees and similar charges;
  4. Value of intellectual property rights;
  5. Value of existing inventory used for the production of the project goods and/ or services;
  6. General costs involved in an investment project proposal development (architects’, engineers’, consultants’ and general legal fees, costs of feasibility studies for preparing the investment and costs for acquisition of patents and licenses, etc.);
  7. Costs related to attendance of trade/commercial/industrial fairs in Vietnam or  overseas;
  8. Costs relate to FDI attraction activities;
  9. R&D costs;
  10. Cost for new inventions and patents registry


12. When should the proposal be submitted and how does the selection process work?

The deadline for the first round of proposal submission was January 28th, 2013. The second call for proposal is effective until 30 August, 2013. However, applications can be submitted at any time until then, and they will be evaluated on a first-come-first-served basis.

Click here for an explanation of the process.


13. My company has received funding from VBCF in the first phase, are we eligible for the second phase?

No, companies who have received funding from the first phase (Vietnam Challenge Fund) are not eligible for the second phase. We believe that those companies need to focus on their existing project to maximize the social return generated by the previous investment and let other companies have a chance to innovate. However, they can take part in applications led by other companies for the second round of call from VBCF.


14. Our company has received assistance from other development projects in the past 3 years, are we eligible to apply?  If yes, can we use the funding from other projects as our counterpart funding?

The applicant cannot use funding from other development projects/organisations as counterpart funding. Companies are welcome to submit their proposal if they have received financial assistance in the past from other development funds, but the project under proposal should be new and independent from those projects that received funding support.


15. We have a project which could significantly reducing the carbon emission in large industrial complex (example steel mills, power plants), are those project eligible for the funding under low carbon growth?


We have a project on community tourism, which could help famers to earn additional income and sell more of their agricultural products in a sustainable way. Are we eligible?


We are developing a training centre which will benefit farmers. Are we eligible to apply?

Companies are welcome to submit a proposal if their project relates to any of the 3 sectors listed in the project guidelines (agriculture, low carbon growth, infrastructure and basic services) so long as the proposed idea is not in the subsector exclusion list.  If you are unsure, please call us. 


16. We have a very good project under development. But it might take 3 to 4 years to complete the project although some of the first results and social impact could be seen in year 2. Are we eligible?

You are welcome to submit a proposal if the project could generate a significant quick win in terms of social impact within two years.


17. The guidelines state that the company/applicant should have at least 2 years related experience. We have this experience but is it possible to create a new separate subsidiary with our partners to run this project (we want a clear governance structure for this project)?  

Yes, but we expect the parent company continue to provide support and expertise. The parent company should be the lead applicant and the one who will sign the investment agreement. The parent company will be responsible for project implementation and success.


18. Should we submit the application in English or Vietnamese?

The application can be submitted in English or Vietnamese. They are going under the same review process. 


19. What if we cannot submit the proposal before 30/8/2013?  It may take some time to develop a good business plan.

In the initial process, applicants are only being asked to submit a summary of the business plan.  It should not take too long to develop the summary. Short-listed companies will be invited to develop full business plan at a later stage. So you will have more time to finalise the business plan in more detail later if you reach the short list.


20. Who are the people doing the actual evaluation of the proposals? Can we do a presentation to the evaluation team to make our ideas clearer?  When would we know the results of our application?

The executive summary applications must in a written form.  Our project team may request additional information to be supplied from the applicant later if we see a need for further clarification. Recommendations will be sent by the VBCF team to an independent investment panel to make the final investment decision. In this process, the applicants will be able to exchange information with the VBCF project team only.


21. Should we provide evidence to prove our financial status, financial position, and HR capacity to implement project in our proposal?

Applicants do not have to provide this evidence at the initial stage when they submit their summary proposal. However more information will be requested when full business plans are submitted. The VBCF team will also conduct due diligence to evaluate the feasibility of the business plan including factual accuracy of the information provided. 


22. How do you ensure transparency during the screening and selection process?

First of all, the whole VBCF team, advisors and external consultants have signed and will sign our Code of Conduct.

Second, we will implement a multi-player independent review process, so  that non-single person can influence the process and/or the final outcome, in any way.

If you have some other questions or comments related to this important issue please send an email to Mr. Javier Ayala, VBCF Executive Manager: jayala@vbcf.org.vn


23. Can you share Inclusive Business case studies in Vietnam and other countries?

Yes, you can read some typical Inclusive Business case studies here.