Note: The data are provided for informational purposes only and in some cases, the information may be incomplete, not fully accurate or out of date. For more information on how data are compiled, see "A Note About Sources." The date of the last update for each country is marked in the section "Country Indicators." We welcome updates and comments. Click here to write to us.
Vietnam
Country Indicators
Information Last Updated
July 2005
Population (Millions)
83 [2005]
Population Density (per sq km)
225 [2005]
GNI per capita (US$)
620 [2005]
GNI per capita (PPP US$)
3010 [2005]
Total Unemployment (% of labor force)
2 [2004]
Employment in Agriculture (% of total employment)
60 [2003]
Gross domestic saving (% of GDP)
28 [2004]
% Population under $2/day (PPP)
34 [2002]
Depth of Financial Sector (M2/GDP)
68 [2005]
Ownership structure of banks (and financial institutions if available)
State-owned and private banks, shareholding banks, joint-venture, and completely foreign-owned banks all exist.
Formal and Semi-Formal Sources of Microfinance
Banks, including state-owned banks and shareholding banks; NBFIs; microfinance institutions; cooperatives, including credit cooperatives, people’s credit funds (commune-level savings and credit cooperatives), and cooperative banks. The government uses the Vietnam Bank for the Poor (VBP) to provide subsidized loans to poor households. It is regulated as a commercial bank with some key exceptions. NGOs and other government programs are also semi-formal sources of microfinance.
Moneylenders, ROSCAs, relatives, friends. In addition, MFIs that (i) do not mobilize non-member deposits; or (ii) have savings (in terms of number of savers and/or total deposits) that do not exceed a certain threshold are not regulated by the State Bank of Vietnam (Decree on Organization and Formation of Microfinance Institutions in Vietnam, Art. 37, as amended by Decree 165/2007/ND-CP, Article 1.12.
In March 2004, the Vietnamese Government issued a decree concerning the organization and operation of microfinance institutions. Organizations that are implementing micro credit activities in Vietnam have to follow the procedures to be licensed by the State Bank of Vietnam in accordance with stipulations in this Decree or stop micro finance activities.
» Vietnam in The Role of Central Banks in Microfinance in Asia and the Pacific
Gilberto Llanto (2002)
John Conroy, et al., eds.
Manila: Asian Development Bank
State-owned commercial banks: For implementing government poverty alleviation programs, largely employ a joint liability system to reach poor rural households through the Vietnam Bank for the Poor
State Bank of Vietnam (SBV), the central bank, which regulates and supervises the financial system. It is also tasked with fulfilling other policy directives (such as the use of poverty alleviation funding through microfinance).
Institution engages in full range of banking activities, including deposit-taking and payment services
An organization that uses owner’s equity, loan capital and savings to provide small and simple financial and banking services to low income households and people. (Decree, Art. 2)
An institution is allowed to engage in some banking business provided capital requirements are met.
State Bank of Vietnam (SBV), the central bank, which regulates and supervises the financial system. It is also tasked with fulfilling other policy directives (such as the use of poverty alleviation funding through microfinance).
Institution engages in limited range of banking activities, not to include demand deposits or payment services
An institution that conducts some banking services and is established on a voluntary basis to provide mutual assistance (See Law on Credit Institutions (1997), Art. 20)
State Bank of Vietnam (SBV), the central bank, regulates and supervises the financial system. It is also tasked with fulfilling other policy directives (such as the use of poverty alleviation funding through microfinance). Credit cooperatives are licensed and monitored by Local People’s Committees. (Llanto 2002)
Institution engages in banking activities with members only.
Founding members must have financial capability; founding members, directors, and executives must have professional qualifications evidenced by CVs and other certification. (See Law on Credit Institutions (1997), Art. 22, 23). Board must consist of at least three members (See Law on Credit Institutions (1997), Art. 37). Bank director must have expertise, must not be under criminal prosecution, or have been convicted of serious crime. (See Law on Credit Institutions (1997), Art. 39, 40)
Major shareholders (owning more than 10% of charter capital or voting shares) must present financial information (See Law on Credit Institutions (1997), Art. 23).
None required
Non-bank Financial Institutions
Microfinance Institutions
MANAGEMENT BOARD AND AUDIT COMMITTEE: Min. 3 members each; max. 5 year term per member. Board members, audit committee, and General Director have to meet requirements on qualifications, ethics, and profession set by the State Bank of Vietnam. (Decree, Art. 16, as amended by Decree 165/2007/ND-CP, Article 1.8)
Feasibility study required. Must include two previous years of audited financial statements for microfinance-related activities (Decree, Arts. 8-9, as amended by Decree 165/2007/ND-CP, Article 1.6.
None required
None explicitly prohibited. Decree allows voluntary and compulsory savings, loans from domestic financial institutions, and equity. Loans from foreign organizations must be approved by the SBV. (Decree, Art. 22)
Non-bank Financial Institution
Team of experts knowledgeable about banking operations must be working for the organization. CVs and other certification of qualifications for board and director (if any) must be provided. (See Law on Credit Institutions (1997), Art. 22, 23)
Feasible business plan of banking operations for the first three years required. (See Law on Credit Institutions (1997), Art. 22, 23)
Financial condition of the institution filing for NBFI status over the last three years must be provided (See Law on Credit Institutions (1997), Art. 23)
Minimum CAR is 8% (See SBV Decision 297, 25 August 1999). Capital adequacy defined as ratio of own capital to risk-adjusted assets, including off-balance sheet commitments, to be determined by State Bank of Vietnam. Own capital includes charter capital, reserve funds, and other liabilities as stipulated by the central bank. (See Law on Credit Institutions (1997), Art. 81 and Decision 1035/QD-NHNN5 dated 18 August 2001 on revision of Decision 297/1999/QD-NHNN5 dated 25 August 1999)
Minimum liquidity ratio is 1 (See State Bank of Vietnam (SBV) Decision 297, 25 August 1999). Liquidity ratio defined as current assets to current liabilities to be determined by SBV (See Law on Credit Institutions (1997), Art. 81). 5% of after-tax profits shall be allocated to a reserve fund, annually (See Law on Credit Institutions (1997), Art. 87). VBP is exempt from compulsory reserve deposits. (Fallavier 1998) (See Decision 51/1999/QD-NHNN1 dated 10 Feb. 1999 on compulsory reserve requirements and Decision 560/2001/QD-NHNN dated 27 April 2001 on compulsory reserve ratios.)
Non-bank Financial Institutions
Microfinance Institutions
For deposit-taking microfinance institutions: approx. US $320,512 (5 billion VND.) In November 2007, the MF Decree was amended to eliminate credit-only institutions. (Decree, Art. 3, as amended by Decree 165/2007/ND-CP, Article 1.2).
To be determined by SBV.
To be stipulated by SBV, exact amounts unknown
To be determined by SBV regulations. (Decree, Art. 27)
Non-bank Financial Institution
Unknown. See Decree 82 dated 3 October 1998.
Minimum CAR is 8% (SBV Decision 297, 25 August 1999). Capital adequacy defined as ratio of own capital to risk adjusted assets, including off-balance sheet commitments, to be determined by State Bank of Vietnam. Own capital includes charter capital, reserve funds, and other liabilities as stipulated by the central bank. (See Law on Credit Institutions (1997), Art. 81 and Decision 1035/QD-NHNN5 dated 18 August 2001 on revision of Decision 297/1999/QD-NHNN5 dated 25 August 1999)
Minimum liquidity ratio is 1 (See SBV Decision 297, 25 August 1999). Liquidity ratio defined as current assets to current liabilities to be determined by SBV (See Law on credit institutions, Art. 81). 5% of after-tax profits shall be allocated to a reserve fund, annually (See Law on Credit Institutions (1997), Art. 87).
Permitted: Deposit-taking; issuing CDs, bonds, etc.; loans, guarantees, leasing (See Law on Credit Institutions (1997), Art. 46, 49, 50), investment in other enterprises or the money market, foreign exchange and gold exchange, insurance, consultancy services (See Law on Credit Institutions (1997), Arts. 69-74)
Interest rates are decided by the SBV, with a range of flexibility surrounding the set rate. As of 2002, lending interest rates ranged from 1.7-2.8% per month (see Decision 546/2002/QD-NHNN dated 30 May 2002).
Total outstanding loans to a single entity shall not exceed 15% of the bank’s own capital, except when loans are financed by government funds (See Law on credit institutions, Art. 79; SBV Decision No. 324, 30 Sept. 1998)
Cannot extend loans to members or relatives of the board of directors, the director or deputy director, any staff member responsible for appraising or approving loans. Preferential treatment on loans shall not be given to these related parties: any auditors or auditing companies, shareholders owning more than 10% of capital or voting shares, any enterprise that a board member or director owns more than 10% stock in. Loans to related parties shall not exceed 10% of charter capital. (See Law on Credit Institutions (1997), Art. 77, 78; SBV Decision No. 324, 30 Sept. 1998)
Non-bank Financial Institutions
Microfinance Institutions
Permitted: Deposit-taking (voluntary and compulsory); making loans; acting as agents in banking and insurance fields; providing payment services on a limited basis (in accordance with State Bank regulations) (Decree, Art. 22-26, as amended by Decree 165/2007/ND-CP, Article 1.9).
Changes in name, amount of charter capital, location of head office/branches, scope of operations, and members of Board of Directors may be made only after written approval from the SBV. (Decree, Art. 28) New branches will require approval of the State Bank of Vietnam. (Decree, Art. 5, as amended by Decree 165/2007/ND-CP, Article 1.3).
MFIs are subject to limits on (i) maximum size of a microcredit; and (ii) maximum loan to a single client. These limits will be determined by SBV regulations. (Decree, Art. 27, as amended by Decree 165/2007/ND-CP, Article 1.10).
To be determined by SBV regulations. (Decree, Art. 27)
Interest rates are decided by the SBV, with a range of flexibility surrounding the set rate. As of 2002, lending interest rates ranged from 1.7-2.8% per month (see Decision 546/2002/QD-NHNN dated 30 May 2002).
Total outstanding loans to a single entity shall not exceed 15% of the bank’s own capital, except when loans are financed by government funds (See Law on Credit Institutions (1997), Art. 79)
Cannot extend loans to members or relatives of the board of directors, the director or deputy director, any staff member responsible for appraising or approving loans. Preferential treatment on loans shall not be given to these related parties: any auditors or auditing companies, shareholders owning more than 10% of capital or voting shares, any enterprise that a board member or director owns more than 10% stock in. Loans to related parties shall not exceed 10% of charter capital. (See Law on Credit Institutions (1997), Art. 77, 78)
Cooperatives/Credit Unions
Cooperatives
Permitted: accepting deposits from members, provide loans to members. Loans given to non-members must be approved by the members and cannot exceed a ratio to be determined by the State Bank of Vietnam (Law on Credit Institutions (1997), Art. 64)
Interest rates are decided by the SBV, with a range of flexibility surrounding the set rate. Cooperatives are granted higher rates than banks or NBFIs(see Decision 546/2002/QD-NHNN dated 30 May 2002).
Depositor protection mechanisms (e.g., deposit insurance or lender of last resort)
Banks
Commercial Banks
Off-site supervision based on monthly returns. On-site supervision done at branch or sub-branch level.
Monthly returns and annual audited financial statements. Internal control and auditing systems must be established with reports given to the director and board (See Law on Credit Institutions (1997), Chap. 2, Sec. 4)
Deposit insurance is offered. Banks may also borrow on a short-term basis from the State Bank of Vietnam for refinancing (See Law on Credit Institutions (1997), Art. 48, Law on SBV, Art. 30 and Decree 89 dated 1 Sept. 1999)
Non-bank Financial Institutions
Microfinance Institutions
Off-site supervision based on monthly returns. On-site supervision done at branch or sub-branch level.
REPORTING: To be determined by SBV regulations. (Decree, Art. 32). DISCLOSURE: Once an application for license is approved, a microfinance institution must disclose the contents of the license in central or local newspapers Decree, Art. 12.1, as amended by Decree 165/2007/ND-CP, Article 1.7).
Micro finance institutions that can take deposits must insure their deposits as required by law. (Decree, Art. 27.3)
Non-bank Financial Institution
Off-site supervision based on monthly returns. On-site supervision done at branch or sub-branch level.
Monthly returns and annual audited financial statements
Available for deposits with terms exceeding three months.
Tax Treatment
Taxes on Income
Taxes on Transactions
Taxes on Payroll
Treatment of costs, provisions, reserves
Other
Banks
Banks
State-owned banks are exempt from profit and capital tax.
General Applicability
General Applicability
Corporate income tax rate (2005): 28%; individual income tax rate: progressive, up to 40%; capital gains are taxed as income. [All information in this section from Deloitte, 2005.]
VAT: 10% (Standard); 0%, 5% (Others)
Employers: 17% (social insurance and pension contributions)
Any amount of loans that are written-off that are recovered shall be treated as revenue (See Law on Credit Institutions (1997), Art. 82)
Dividends: 0%; Interest and Royalties: 10%; General services: 10%
MFI-specific
MFI-specific
VBP is exempt from profit and capital tax
Other Relevant Business Legislation
Credit Rating and Reporting Requirements, Services
Security interests: Forms accepted
Competition/Consumer protection rules: standard disclosure formats
General Applicability
General Applicability
Public credit registry exists
General assets, mortgages, land-use rights, third-party guarantees, joint liability.
