The project, which is supported by the Australian Government’s Business Partnerships Platform, aims to increase access to a full range of financial services for low-income households, especially women-led micro-enterprises that lack access to traditional banking services.
Hoang Minh Te, Deputy General Director of Vietnam Bank for Social Policies delivering a speech at the launching ceremony
The project will be implemented in co-operation between VBSP, Mastercard and the Asian Foundation over three years.
Improving access to financial services is increasingly recognized as key to creating greater economic opportunities for the poor. Unfortunately, in addition to credit, about two-thirds of Vietnamese people, particularly in rural areas, are disconnected from other formal banking services. This is partly due to the high cost of operating bank branches in remote areas where small frequent transactions are the norm.
Vietnam has undergone a rapid evolution in information and communications technology with telecommunications networks covering almost the entire country and adults owning mobile phones. However, the use of mobile technology for financial transactions is relatively rare and cash transactions remain pervasive.
“The project will help poor and near-poor households and other social policy beneficiaries to access sustainable and effective financial services, contributing to alleviating poverty and connecting the poor with the economy,” said Hoang Minh Te, VBSP Deputy Director.
He said applying new technology is in line with the Government’s socio-economic development strategy for the 2011-20 period. This will also be one of tools to diversify the bank’s products and services as well as increasing its efficiency in order to serve an increasing number of customers.
VBSP will send account-related information via SMS texts to clients, thus improving transparency and reducing delinquency rates. The bank will pilot mobile banking for customers to make its transaction procedures automatic.
“We want to make a real difference in reducing poverty and ensuring that poor people have access to financial system. Lessons drawn from other markets have shown that digital payments are cheaper, more efficient and ultimately more sustainable,” said Arn Vogels, chief representative of Mastercard Indochina.
Being a specialized and the biggest State-owned financial institution, the bank has provided financial services, especially loans to help reduce poverty and achieve social targets effectively.
VBSP’s strength is a nationwide network of 63 branches, 629 transaction offices, nearly 200,000 savings and credit groups in more than 11,000 communes.
It serves nearly seven million customers with total outstanding loans of VND 157 trillion. Nearly 80 percent of the debtors live in rural and remote areas.
Source: VNA