ADB, Japan Help Viet Nam on Micro-Finance

Oct 2009
Manila, Philippines, October, 10 2009 - The Asian Development Bank and Japan are helping Viet Nam bring its unregulated micro-finance programmes into the formal sector so that it can provide increased financial support for the poor.

The Japan Fund for Poverty Reduction is extending a US$1.5 million grant to help the Government formalise the micro-finance sector.

Five programmes will be implemented to develop the sector’s capacity to join the formal sector. Staff training and supplementary matching funds will be provided to enable targeted institutions to deliver modern, diverse financial products and services.

Currently micro-finance is dominated by Government-subsidised programmes led by the State-owned Viet Nam Bank for Social Policies. However, they have struggled to meet the financial needs of the poor and offer limited services.

At the same time the growth of informal providers has been constrained by their inability to mobilise significant amounts of money because they lack the capacity to comply with regulations on taking deposits, says an ADB press release.

The Government, supported by previous technical assistance from ADB, has developed a legal framework that paves the way for informal operators to enter the regulated sector, helping to make the industry more diverse, viable, and sustainable.

The Government will provide counterpart funds equivalent to around $150,000 with participating micro-finance institutions supplying matching funds of $800,000 equivalent. — VNS

Source : VNS

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