ADB Pledges $40M for Vietnam’s Microfinance Sector

The Asian Development Bank (ADB) will provide a $40-million loan to help Vietnam improve its oriented-market micro-finance sector under the Microfinance Development Program (MDP). State Bank of Vietnam governor, Nguyen Van Binh, and ADB country director for Vietnam, Tomoyuki Kimura, signed an agreement for the loan on September 7. The funds are, “To narrow the development gaps and improve the poor’s access to opportunities and social services, Vietnam should address the need for more responsive and inclusive microfinance services,” said Kimura. The $40 million policy-based loan from ADB’s Special Funds resources aims to increase access to sustainable financial services for the disadvantaged people, especially in rural areas. The MDP will seek to integrate microfinance into the formal financial structure by nurturing emerging microfinance institutions to become formal financial institutions, licensed by the State Bank of Vietnam, and at the same time, encouraging reform and restructuring of State institutions involved in microfinance. These would include the Vienam Bank for Social Polices and the Central People’s Credit Fund. It also helps enhance operational and supervisory capacities of microfinance, and supports the development of the financial infrastructure, including a training institutes, advocacy programs, and a consumer protection systems, as well as a credit information exchange system. (vir.com.vn Sept 7)