Paper

Vietnam Microfinance Country Profile

Encapsulating the Vietnamese microfinance sector
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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.

About this Publication

By Asia Resource Centre for Microfinance (ARCM)
Published