ADB starts $600,000 project to help Vietnam develop microfinance

This technical assistance project helps the Vietnamese government deploy the national microfinance development strategy focusing on building a comprehensive legal framework for a diverse body of financial institutions and stakeholders, improving the regulatory capacity of the State Bank of Vietnam (SBV) and establishing an infrastructure capable of supporting the sustainable development of the microfinance industry.

“The Vietnamese government highly appreciates the ADB’s support, which helps the SBV implement the MDP on schedule and hopes to expand cooperation with the ADB in the future,” said Le Trung Kien, deputy director of the Department of Banking Operation Safety Policy at the Banking Inspection and Supervision Agency.

The project is one of the ADB’s five technical assistance instruments to help the Vietnamese government deploy the MDP. The remaining items include a grant project for formalising microfinance institutions worth $1.5 million, a technical assistance package for preparing the MDP worth $0.5 million, and assistance packages for supporting the MDP (worth $0.5 million) and for strengthening microfinance sector operations and supervision (worth $1.0 million).

The MDP, which is implemented over the 2010-2020 period, aims to provide easy, safe and effective help to financial services targeting the low income-segments of the populace.As of the end of 2013, about 10.4 million low-income people approached the MDP for assistance.

The ADB has lent the Vietnamese government $90 million in instalments to deploy the MDP. This sum includes a $40 million policy-based loan for the first subprogramme approved in July 2012, which aimed to support the Vietnamese government to improve the quality and efficiency of the programme. The remaining $50 million policy-based loan received in December 2014 aimed to help the Vietnamese government to create a dynamic microfinance sector and expand the programme’s scale as well as improve the poor’s access to quality and safe financial services.