Vietnam Microfinance Country Profile
Encapsulating the Vietnamese microfinance sector
This paper presents the microfinance profile of Vietnam. It describes the:
- Need for microfinance services since 40% of the households do not have access to formal financial services;
- Development of microfinance sector marked by government interventions through the state-owned banks and programs;
- Growing presence of formal and semi-formal sector in the provision of financial services to rural poor;
- Delivery models for credit with adapted group lending and Grameen Bank methodology, and deposit mobilization with compulsory savings as popular trends;
- Efforts to enact a decree on regulation and supervision with the support of Asian Development Bank.
The paper also discusses the challenges that the sector faces:
- Lack of comprehensive regulatory framework;
- Government intervention and, thus, unsustainable banking practices like subsidized interest rates;
- Credit-focus with regulatory constraints for deposit mobilization;
- Lack of funds;
- Lack of institutional capacities.
Finally, the paper concludes with the efforts of the various organizations to support the microfinance sector.
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