Financial Sector Policy Issues Note: Vietnam Bank for Social Policies

This policy note explores the operations of the Vietnam Bank for Social Policies (VBSP) and the financial sector policy implications raised by the VBSP's operations in Vietnam. It aims to inform the Vietnam Government about the future direction of VBSP development.

The note identifies some issues faced by NBSP:

• Weak supervision by the Government of the VBSP operations;
• Confused corporate governance of the VBSP;
• Unclear protection of public deposits being channeled into the VBSP;
• Inefficient intermediation of public savings and government funds by the VBSP;
• Distortions in the microfinance and commercial banking credit and savings markets;
• Unclear fiscal implications for the costs and liabilities associated with the VBSP's operations.

Finally, the note provides the details of assistance requests made by the VBSP to various international donor agencies.