State Bank of Vietnam Governor, Nguyen Van Binh, and ADB Country Director for Viet Nam, Tomoyuki Kimura, on September 7 signed an agreement for a $40 million loan to support the government’s policy reforms to improve the quality, accessibility, efficiency, and competitiveness of country’s microfinance sector under the Microfinance Development Program.
In response to the Government’s commitment to developing a market-oriented microfinance sector, ADB has approved the first microfinance development program with technical assistance grant for Vietnam as a continuous support to a sustainable sector development. The program is a pipeline project in the latest ADB’s Country Partnership Strategy with the Government of Viet Nam.
The $40 million policy-based loan from ADB’s Special Funds resources for Subprogram 1 aims to increase access to sustainable financial services for the poor, especially in rural areas.
The Microfinance Development Program (MDP) will seek to integrate microfinance into the formal financial sector by nurturing emerging microfinance institutions to become formal financial institutions licensed by the State Bank of Viet Nam, and at the same time, encouraging reform and restructuring of microfinance-involved state financial institutions – the VietnamBank 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 financial infrastructure including a training institute, advocacy programs, and a consumer protection scheme, as well as a credit information exchange system.