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Population (millions) |
80.5 |
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Gross domestic savings (% of GDP) |
28.1% |
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% Population under $2/day (PPP) |
64% |
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Regulated microfinance institutions |
Banks, including state-owned banks and shareholding banks; NBFIs; 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. |
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Non-regulated sources of microfinance |
NGOs, government programs |
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Predominant informal finance mechanisms (ROSCAs, tontines, etc.) |
Moneylenders, ROSCAs, relatives, friends |
General Approach to Regulating
Based on the Comparative Database on Microfinance Regulation by the IRIS Center of the University of Maryland|
Commercial Banks (including Regional Banks) |
Non-Bank Financial Institutions (NBFIs) |
Savings and Credit Cooperatives |
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Microfinance Companies |
NBFIs |
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| Definition or description of institution | Financial institutions permitted to conduct all banking activities | 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 | An institution is allowed to engage in some banking business provided capital requirements are met | An institution that conducts some banking services and is established on a voluntary basis to provide mutual assistance |
| Guidelines & restrictions on financial services | Permitted: Deposit-taking; issuing CDs, bonds, etc.; loans, guarantees, leasing, investment in other enterprises or the money market, foreign exchange and gold exchange, insurance, consultancy services Prohibited: Real Estate |
Permitted: Deposit-taking; making loans, acting as agents in banking and insurance fields. For an organization to begin taking savings, it must have been collecting compulsory savings for at least three years, and meet other conditions Prohibited: Payment services on a limited basis |
Permitted: Some banking activities, such as loans and leasing, provided capital requirements are met; May receive deposits with less than one-year terms Prohibited: Demand deposits, payment services |
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 Prohibited: Payment services |
Dinh Quan Project Evaluation of the economic impact of the savings-credit program in Dinh Quan Project, 2000
By Bernard Kervyn
The paper presents the report of the evaluation of a microfinance programme in Vietnam that was discontinued, after some five years of operations, because of political interference. It evaluates the economic impact of the savings-credit program - Dinh Quan project, which is an adaptation of the Grameen formula. The main component is the savings-credit program, whose goal is also to foster community organization and solidarity, but the project includes several other programs:
- agriculture and livestock to increase their profits or at least to reduce their losses
- health education via the savings-credit groups and in primary schools
- education theatre, community libraries, literacy classes, employment creation through small community works
The paper concludes that despite the discontinuation, the members of the savings and credit groups have benefited from their membership. Family income and income from livestock increased and, while the agriculture extension program is presumed to have made some impact, the livestock has done much better. It provides technical support at cost (no subsidy) by para-vets, trained by the project amongst other benefits.
See also:
McCarty, A., Microfinance in Vietnam: A Survey of Schemes and Issues, 2001