Prioritizing the vulnerable in financial inclusion

11:00 | 09/04/2017 Economy

(VEN) - The State Bank of Vietnam (SBV), in collaboration with the Citi Foundation and the Foundation for Development Cooperation (FDC), held the Asia-Pacific Financial Inclusion Summit themed “Advancing Financial Inclusion in a Digital Age” on March 21 and 22 in Hanoi. Vietnam Economic News’ Thuy Linh spoke with SBV Deputy Governor, Nguyen Thi Hong, about the government’s role and orientations in financial inclusion development in Vietnam.  

Could you tell us about the government’s role in financial inclusion development in Vietnam?

prioritizing the vulnerable in financial inclusion
SBV Deputy Governor, Nguyen Thi Hong

More than 60 million people are living in Vietnam’s rural areas, accounting for 52 percent of the country’s labor force. This population should be supported, especially through financial inclusion. The party and the state have attached importance to, and mobilized resources for, promoting financial inclusion in recent years, considering it one of the key socioeconomic development areas for the years to come.

The government is building a national strategy for financial inclusion development, which is expected to be issued in 2020. Government resources are mainly used for building and improving legal frameworks; development of financial and technological infrastructure; diversification of financial products and services; and construction of consumer protection and financial education policies.

Financial inclusion will be developed with priority given to the vulnerable, such as micro, small and medium enterprises, rural poor people and women, among others. These groups will have better access to financial and banking services.

Could you tell us about the SBV’s role and contributions to financial inclusion development? The SBV is assigned by the government as the focal point for building a national financial strategy. The SBV works closely with government agencies, local authorities, and relevant organizations to provide comprehensive, true and timely information about financial inclusion in Vietnam.

The SBV coordinates effectively with international organizations and donors to utilize their financial and technical resources to help Vietnam develop and implement financial inclusion.

The SBV reviews and improves the necessary legal frameworks to pave the way for credit institutions to expand their operations and provide more banking services, especially in remote areas with a low socioeconomic ranking.

What programs do the government and the SBV have to promote financial inclusion? The party has resolutions, while the government has projects, all on agricultural and rural development, improvement of rural people’s lives and agricultural restructuring. The SBV has been doing a good job in implementing policies related to the resolutions and projects. The SBV told credit institutions to arrange capital in order to meet the demand for rural development capital while providing preferential loans and increasing the rate of loans for this sector. Loans have been diversified and are handled through people’s credit funds, microfinance organizations and capital borrowing teams.

In addition, the banks provide credit for such specific agricultural activities as offshore fishing, coffee re-cultivation in the Central Highlands and agricultural loss reduction, as well as loans for the poor, for production and trading businesses in localities with a low socioeconomic ranking, people on welfare benefits, households above the poverty line and households that have just escaped poverty.