Preparing Microfinance Sector Development Program for Vietnam: Project Preparatory Technical Assistance Concept Paper

This project preparatory technical assistance (PPTA) concept paper outlines Asian Development Bank’s (ADB) plan for microfinance sector development in Vietnam.

Vietnam’s microfinance sector is dominated by large state institutions such as Viet Nam Bank for Social Policies, Viet Nam Bank for Agriculture and Rural Development and People’s Credit Funds. Independent MFIs are few in number, small in size and play a negligible role. Challenges to development of the microfinance sector include lack of institutional capacity and policy and regulatory environment for microfinance. ADB aims to support development of a market-oriented formal microfinance sector in Vietnam that is linked to the formal banking sector and is able to provide affordable and safe financial services to the poor. ADB’s strategy focuses on:

• Creating a policy environment conducive to microfinance;
• Developing financial infrastructure;
• Building viable institutions;
• Supporting pro-poor innovations.

The paper outlines ADB’s strategy, intended impact, outcome, output, assumptions, risks and implementation arrangements.