Microfinance Industry Report: Vietnam

This report presents an overview of the microfinance sector in Vietnam. It describes the financial and business environment and the regulatory and policy initiatives of the government.

The formal financial sector in Vietnam is supervised by the State Bank of Vietnam. The country’s banking sector is considered concentrated and fragmented, and the supply market is crowded and complex. Most poor and low-income households have some access to credit and the formal banking system appears to reach a significant number.

The report examines funding sources, trends and innovations and the impact of the sector. It identifies opportunities for development, and lists the following challenges faced by the microfinance industry:

• Absence of an enabling policy framework;
• Smooth transition of mass organizations from microfinance providers to facilitators;
• Lack of level playing field in microfinance provision, due to limited understanding and inherent ideological divide;
• Weak governance and ownership structures of most MFIs;
• Limited market for training and business support services;
• Microfinance services provision is fragmented, with limited coordination among stakeholders.