Illustrative image (Source: VNA) Hanoi (VNA) – Amidst the growing demands for microfinance in Vietnam, thepotential of expansion for the sector is high, but experts have advised that microfinanceorganisations should work harder to develop in a sustainable manner.
Microfinanceis one of the more effective tools for poverty reduction, especially amonglow-income, disadvantaged and vulnerable groups, including women.
Accordingto Deputy Governor of the State Bankof Vietnam (SBV) Nguyen Kim Anh, with its prominence of simple borrowingconditions, no mortgage needed, flexibility in payment, and preferentialinterest rates, microfinance is considered a leverage for women to strengthentheir confidence.
The capital resources also enable women to engage inproduction activities to increase incomes and get rid of poverty.
Statistics show that up to 85 percent of microfinancecustomers are poor women.
Dr. Dang Thu Thuy from the Vietnam Academy of Bankingsaid that women have fewer chances than men to access services from officialorganisations or credit institutions. Meanwhile, statistics show that the ratioof repaying the loans among female customers is higher than that among maleborrowers.
In Vietnam,microfinance is provided through three sectors – financial institutions;non-governmental organisations, political-social organisations, and charitiesand social funds; and private financial activities.
BySeptember 30 last year, Vietnam had seen four microfinancial organisationslicensed by the SBV, with a total capital of over 1.37 trillion VND (???). Atthe end of 2017, the four organisations had a total of 438,534 customers. Depositsin the organisations reached nearly 2.7 trillion VND, a surge of 185 percentover 2016, helping maintain a low ratio of bad debts at 0.3 percent of their totaloutstanding balance.
However,many economists pointed out that microfinance’s scale remains small with few productsand services, while the legal framework for the sector has not yet beencompleted with modest support in financial management for customers.
SBV DeputyGovernor Dao Minh Tu said that the demand for microfinance capital is increasing,while the capital growth of microfinance projects and programmes is facing difficultiesdue to limited support from the State budget.
Accordingto experts, obstacles in accessing official microfinance resources may leadpeople to unofficial resources with the latent risk of “black credit” expansion.
Tu heldthat it is necessary to issue regulations giving more favourable conditions forthe connections of credit institutions with microfinance organisations, whilefostering collaboration among ministries, sectors and localities as well associo-political organisations to shorten the time of issuing licences formicrofinance programmes and projects.
The SBV deputygovernor also stressed the need to continue standardising the management ofmicrofinance organisations through the completion of the sector’s legalcorridor and encourage its sustainable growth, while designing new services tosuit Vietnam’s real life conditions.
In acountry with around 9 million poor households, or about 7 percent of the population,that have difficulty in accessing financial resources, there is room formicrofinance to further develop. Experts held that the sector is eying up opportunitiesto complete its organisation and management method towards safer and more sustainablegrowth.–VNA
Microfinanceis one of the more effective tools for poverty reduction, especially amonglow-income, disadvantaged and vulnerable groups, including women.
Accordingto Deputy Governor of the State Bankof Vietnam (SBV) Nguyen Kim Anh, with its prominence of simple borrowingconditions, no mortgage needed, flexibility in payment, and preferentialinterest rates, microfinance is considered a leverage for women to strengthentheir confidence.
The capital resources also enable women to engage inproduction activities to increase incomes and get rid of poverty.
Statistics show that up to 85 percent of microfinancecustomers are poor women.
Dr. Dang Thu Thuy from the Vietnam Academy of Bankingsaid that women have fewer chances than men to access services from officialorganisations or credit institutions. Meanwhile, statistics show that the ratioof repaying the loans among female customers is higher than that among maleborrowers.
In Vietnam,microfinance is provided through three sectors – financial institutions;non-governmental organisations, political-social organisations, and charitiesand social funds; and private financial activities.
BySeptember 30 last year, Vietnam had seen four microfinancial organisationslicensed by the SBV, with a total capital of over 1.37 trillion VND (???). Atthe end of 2017, the four organisations had a total of 438,534 customers. Depositsin the organisations reached nearly 2.7 trillion VND, a surge of 185 percentover 2016, helping maintain a low ratio of bad debts at 0.3 percent of their totaloutstanding balance.
However,many economists pointed out that microfinance’s scale remains small with few productsand services, while the legal framework for the sector has not yet beencompleted with modest support in financial management for customers.
SBV DeputyGovernor Dao Minh Tu said that the demand for microfinance capital is increasing,while the capital growth of microfinance projects and programmes is facing difficultiesdue to limited support from the State budget.
Accordingto experts, obstacles in accessing official microfinance resources may leadpeople to unofficial resources with the latent risk of “black credit” expansion.
Tu heldthat it is necessary to issue regulations giving more favourable conditions forthe connections of credit institutions with microfinance organisations, whilefostering collaboration among ministries, sectors and localities as well associo-political organisations to shorten the time of issuing licences formicrofinance programmes and projects.
The SBV deputygovernor also stressed the need to continue standardising the management ofmicrofinance organisations through the completion of the sector’s legalcorridor and encourage its sustainable growth, while designing new services tosuit Vietnam’s real life conditions.
In acountry with around 9 million poor households, or about 7 percent of the population,that have difficulty in accessing financial resources, there is room formicrofinance to further develop. Experts held that the sector is eying up opportunitiesto complete its organisation and management method towards safer and more sustainablegrowth.–VNA
VNA
