15:02 | 04/11/2016 Economy
(VEN) - Vietnam needs to strengthen microfinance development, said Asian Development Bank (ADB) Senior Financial Sector Specialist Eiichi Sasaki in a talk with the State Bank of Vietnam (SBV) on October 6, 2016, referring to a draft report on the microfinance sector going towards comprehensive financial development.
The Vietnam Bank for Social Policies will promote loans for the poor
The report is within the framework of the project on policy and advisory technical assistance for the microfinance development program, funded by the ADB.
Eiichi Sasaki said that the ADB wants to focus on assisting the government of Vietnam to issue Circulars 04 and 32 on assuring safety and operation of microfinance institutions. The ADB is working hard to further enhance the capabilities of these institutions, he added.
Le Trung Kien - Deputy Director of the Prudential Regulations and Policies Department of the Banking Supervisory Agency - the State Bank of Vietnam said that microfinance plays a very important role in poverty reduction in Vietnam. Having acknowledged this issue, the government of Vietnam and the ADB have built two loans worth US$90 million for a microfinance development program that was designed for overall reform of microfinance in Vietnam. The project on policy and advisory technical assistance for microfinance development aims to build a Vietnam microfinance sector assessment report. The report is expected to outline an overall picture of the Vietnamese microfinance sector and provide recommendations for the government of Vietnam to continue having policies and orientations for microfinance reform and development in the country, Kien said.
Consultants have been working with the State Bank of Vietnam, ministries, sectors and microfinance institutions to draft a microfinance sector assessment report towards comprehensive financial development. The report is expected to give foundation and recommendations for construction of policies and orientations for microfinance development in Vietnam. It would be also an important base for the ADB to build a new loan program worth US$200 million for microfinance development in Vietnam.
Eiichi Sasaki said that it is necessary to further promote support activities for the Vietnam Bank for Social Policies, as well as stimulate assistance and comprehensive finance for such organizations as microfinance institutions and people’s credit funds. He added that the ADB is also taking into consideration commercial banks with new development orientations and will support their microfinance-oriented activities through new modes. “The ADB has been working with the State Bank of Vietnam to review and adapt supervisory and regulatory models, which it is providing for a better environment, in compliance with Vietnam’s conditions. Since then, private agencies and institutions can participate in a broader financial market than their traditional markets,” Eiichi Sasaki said.
According to the State Bank of Vietnam, the project on policy and advisory technical assistance for microfinance development’s management unit and ADB specialists will gather suggestions to release recommendations for comprehensive microfinance development in Vietnam.