MicroSave and MetLife launches financial health programme in Vietnam

MicroSave and MetLife will support financial institutions and digital innovation to extend the financial market to low- and miedium-income households

The i3 programme, which stands for Innovate, Implement, and Impact, aims to help these communities by supporting financial services institutions that focus their digital transformation initiatives on this particular segment.

Since 1986, various reforms under doi moi spurred rapid economic growth and development in the country, lifting more than 40 million people out of poverty in the process. However, access to and use of formal financial services have been minimal in Vietnam, which continues to be a cash-dominant economy – cash payments account for over 90 per cent of all transactions. The government has urged a shift in digital payments to encourage safer transactions that also enable people to plan, save, and borrow.

There is immense potential in digital financial services to meet this need given the high percentage of internet users and mobile subscribers combined with low banking penetration and an emerging and strong set of FinTech companies. These conditions provide an opportunity to develop targeted products to better meet the personal and business financial needs of low- to moderate-income people in Vietnam.

Manoj Sharma, managing director, Asia of MicroSave, delivered a keynote presentation at the launch. He said: “While basic access to banking services and products remains a challenge in Vietnam, the government has shown firm commitment through conducive policies that aim to advance financial inclusion. Through the i3 programme, MicroSave aims to work with strong and capable financial services and fintech institutions to design and deliver financial products and services that meet the needs of low and moderate income people who aspire to lead financially healthy lives.”

More than 80 industry experts on financial inclusion, including regulators, bankers, microfinance institution leaders, mobile financial service providers, and fintech entrepreneurs attended the launching event. Pham Xuan Hoe, deputy director general of the Banking Strategy Institute of the State Bank of Vietnam (SBV); Ha Hai An, deputy director general of SBV’s Department of International Co-operation; Bui Quang Vinh, deputy general director of Vietnam Bank for Social Policies (VBSP); Nguyen Ba Diep, executive vice chairman of MoMo (M_Service JSC); and Gaurav Sharma, CEO and general director of BIDV MetLife Life Insurance LLC participated as special guests.

A lively panel discussion on the importance of financial health was undertaken by leaders from the SBV, BIDV MetLife Life Insurance LLC, VBSP, MoMo, and The Asia Foundation, all of whom are committed to building financial health for all.

The signing of a Memorandum of Understanding between Vietnam Bank for Social Policies and MicroSave

Speaking at the event, Pham Xuan Hoe, deputy director general of the SBV’s Banking Strategy Institute, said: “The State Bank of Vietnam aims to leverage the accomplishments of the Fourth Industrial Revolution with regards to digitalising activities in the banking sector and creating quick access to financial resources for the people and businesses. Micro-financial products provided on digital platforms will be very convenient for people living in remote areas, hence being the key instruments in realising the national digital financial inclusion strategy currently being developed by the State Bank.”

Gaurav Sharma said: “Vietnam is undergoing a historic and exciting growth phase, making this the right time and a perfect opportunity to ensure that the growth is inclusive and equitable. MetLife Foundation is very well aligned with the Vietnamese government’s priority of improving financial health for low- to moderate-income people, and the i3 programme is a great example of this. We hope to create a positive impact on the financial lives of 2 million people across Vietnam with this initiative.”

Bui Quang Vinh, deputy general director of VBSP, said: “VBSP is a government-owned bank taking the lead in policy and microfinance in Vietnam. We have the largest network coverage in the banking system that ensures that the poor policy holders in rural, mountainous, remote, and isolated areas can easily access financial and banking services at 63 provincial branches, 630 district transaction offices, and 10,962 transaction units opened at the communal People’s Committee offices nationwide.”

With 183,000 savings units and over 6.7 million customers, together with more than 20 preferential credit programmes and other services, total outstanding loans have reached over VND185 trillion ($8 billion). The disbursed funds have then been 100 per cent invested in communes, wards, and towns across the country.

VBSP has aided over 31.8 million poor households and beneficiaries to gain access to the funds they need, lifting 4.5 million households above the poverty line, while attracting and creating jobs for some 3.4 million labourers. Over 3.5 million students, in addition, have benefited from the funds to complete their study and over 9.7 million clean water and rural environmental sanitation projects have been built.

“With the goal of not letting the Fourth Industrial Revolution ignore the poor, through the co-operation with MicroSave at the i3 programme we expect to raise digital financial literacy for the poor, help increase and improve access to the full range of digital financial services to those who lack access to traditional banking services, accelerating economic opportunities for low-income households and women-led microenterprises,” Vinh added.

The representative of Momo introducing fintech services

Diep from MoMo said: “I highly appreciat MicroSave’s efforts and focus on the Vietnamese market and hope we could together change low-income people’s lives. MoMo would like to contribute its efforts to increase financial inclusion in Vietnam through its mobile e-wallet and physical distribution system.”

Through the i3 programme, MicroSave has partnered up with banks, MFS providers, fintechs, and other financial service providers that are using technology to build products and services specifically for the financially excluded and underserved people of Vietnam.

The three-year programme, funded by MetLife Foundation, is being implemented across four Asian countries, led by MicroSave in Bangladesh and Vietnam and by UNCDF in China and Malaysia. The programme will have a shared learning platform to ensure that lessons learned are shared across the markets.