The Japan Fund for Poverty Reduction is extending a US$1.5 million grant to help the Vietnamese Government formalize the country’s microfinance sector, the Asian Development Bank (ADB) announced Oct. 6.
A statement ADB released from Manila, where the bank is headquartered, said five microfinance programs would be helped to develop the capacity to join the formal sector.
The extension of the grant also aims to boost services and provide increased financial support for the poor, ADB said.
“The Government [of Vietnam] recognizes microfinance as a potentially important means for poverty reduction, especially in rural areas, and is seeking to develop a robust sector with diversified, formal microfinance sources and strong private sector participation that can offer sustainable and affordable financial services to the poor,” Binh Nguyen, finance specialist (rural and microfinance) in ADB’s Southeast Asia Department, said in the announcement.
The Vietnamese Government will provide counterpart funds equivalent to around US$150,000 with participating microfinance institutions supplying matching funds $800,000 equivalent, making the Japan Fund for Poverty Reduction total cost of US$2.45 million, according to ADB.
The Japan Fund for Poverty Reduction is financed by the Japanese Government and administered by the bank.