Vietnam among top 10 unbanked nations in the world

Vietnam ranks second place in the top 10 unbanked nations

Insufficient access to financial services has made Vietnam one of the region's most appetising markets for fintech companies.

Vietnam ranks second among the top 10 unbanked nations, as 69 per cent of the population failed to approach traditional banking services and other financial institutions, according to the latest data published by UK-based Merchant Machine last Thursday.

The Philippines and Indonesia placed fourth and ninth with the rates of 66 and 51 per cent, respectively.

The common features of the countries are high cash usage, low card penetration, and scarce traditional access points such as ATMs, the data showed.

The findings partially match the report of Fitch Ratings last year. Accordingly, about half of the Southeast Asian population have no bank accounts and cannot approach financial products and about 18 per cent of the region's population have little access to financial services without bank accounts.

Along with the limited access to financial services, Vietnam’s golden population structure is one of the main reasons behind fintech investors accelerating their penetration in the market.

Local fintech startup MFast in late June successfully mobilised $1.5 million from two investment funds, Do Ventures and Jafco Asia.

The recent years saw a string of successful fintech investment deals in Vietnam. In January 2019, MoMo received $100 million in Series C from Warburg Pincus. Four months later, FPT and SBI Holdings also invested $3 million in Utop. In July, VNPAY mobilised $300 million from GIC and SoftBank. In late 2019, Phoenix Holdings sponsored $500,000 to Interloan. Wee Digital last September also received an undisclosed investment from Intervest and VinaCapital Ventures.

Vietnam is currently home to 115 fintech startups, a significant increase against the 29 in 2015. According to UK-based market research company Tellimer, the Southeast Asian country has been a magnet to fintech investors, luring in up to 36 per cent of total fintech capital across the region in 2019.