A thesis submitted in partial fulfillment of the requirements for the degree of Master of Science, School of Environment, Resources and Development

Thesis (M.Sc.) - Asian Institute of Technology, 1999

Phongsaly district is mountainous with slash and bum farming zone. Most people are still living in poverty. The local government and PDDP are focusing to develop this area to improve the living condition of the people. The study aims to explore and analyze the change of the living condition of households as a result of VCSB. The research focused on the effect of organization groups, how to deal with problems, in-groups formation to get loans and causes for lack of experience. Income earning from agriculture and livestock has improved due to setting up of VCSB. Rice still becomes the main source of earning. Non-farm economic activities serve as alternative sources of income. There is still much to be improved in the marketing system of products. The environment is not only affected by the negative impacts of shifting cultivation but also impacts of promoting tea plantation. Gender relations in households have changed. After receiving some training and participating in projects, the household economic condition improved. There was a better involvement of women in decision-making. However, the women position is still lower than men. Some suggestions focused on reducing shifting cultivation in the long run taking into consideration the condition of the area. The change of living pattern results from improving the household income and gender relations in households. The future of the program depends on the support for the program. To achieve good results after finishing the project, credit federation has to be created and seek pennanent juridical recognition like the Bank of Lao PDR.