Microfinance in Vietnam: Policy Assessment

This document assesses the microfinance sector in Vietnam, and aims to identify areas of support for donors willing to aid expansion of access to finance in the country.

Donors could conduct research with State Bank of Vietnam (SBV) to identify factors that drive performance and growth potential of service providers. Further, donors should:

• Assess supply of pro-poor financial services;
• Assess legal and regulatory framework that governs the organization and scope of activities of microfinance providers;
• Conduct cost-benefit appraisal of current subsidized credit programs, and make recommendations for the future direction of these programs;
• Conduct feasibility study for a wholesale financing facility for MFI funding;
• Support definition of a legal and regulatory framework that enables institutions to provide financial services to currently underserved populations;
• Assist SBV to centralize its activities related to regulation and supervision of microfinance service providers;
• Develop specialized capacity of SBV around a regulatory and supervisory model appropriate for Vietnam.

Finally, donors that support access to finance in Vietnam must enlist the support of other key development agencies in the country like the World Bank and Asian Development Bank in their effort.