Mr. Alwaleed Alatabani, Lead Financial Sector Specialist Finance, World Bank (WB) in Vietnam made this comment in an online national conference recently held in Hanoi to review the 5-year implementation of Directive 40-CT/TW of the Secretariat of the Party Central Committee on strengthening the Party’s leadership for social policy credit.

He said that a credit model for development or policy credit with the support of the Governments is the model that has been applied in many countries around the world. However the number of successful models is few thus far.  And VBSP is one among them, which is currently the leading microfinance provider in Vietnam and one of the largest microfinance providers in Asia.

Mr. Alwaleed Alatabani, Lead Financial Sector Specialist Finance, World Bank  in Vietnam

He stressed that this success is thanks to Vietnam’s careful study of global experience and finding its own path that is suitable for Vietnam's culture, history and social structure. It is the establishment of a strong leadership and partnership relationship between the Party committees, the Government authorities with VBSP and socio-political organizations from the central to local levels in the provision and supervision of policy credit

It is also the combination of credit with national target programs and projects to encourage economic development and application of new science and technology. The success of the implementation of social policy credit in Vietnam also contributes to Vietnam's early achievement of the millennium goals.

In recent years, VBSP is extending loans to more than 6.5 million households through a nationwide network including 63 provincial branches, 631 district transaction offices, more than 10,400 transaction points at the commune level and nearly 175,000 savings and loan groups. Through this network, VBSP has accessed to about 92% of the total number of borrowers and accounts for 87% of the total value of loans in Vietnam’s microfinance market (MIX 2018).

Mr. Alwaleed Alatabani stressed that VBSP has become a very important organization with coverage throughout Vietnam, playing a key role in building a comprehensive financial system in Vietnam. Without the key role of VBSP, the promotion of financial inclusion in Vietnam would not be a reality.

From 2018, within the Financial Inclusion Support Framework (FISF), the WB has conducted an assessment of the VBSP, the purpose of which is to evaluate the effectiveness of the implementation of the goals in the bank’s development strategy for the period of 2011-2020 and propose solutions for the strategy in next phase of VBSP.

Now VBSP has been providing a set of various credit products, with more than 20 credit programs for different types of lending needs, offered at preferential interest rates or close to the market rates. Credit is the main product of VBSP, but savings are gradually increasing from low to significant level.

“VBSP wishes to publicize the Report on the WB website in order to promote knowledge sharing and exchange regarding state-owned financial institutions across the globe. As a leading microfinance provider in Vietnam, the development journey of VBSP offers valuable experience and lessons learnt to other governments,” he shared. 

The expert believed that VBSP can basically continue to modernize the operating model and improve the products in the direction of automation. For example, it is possible to consider investment in the development of electronic payments, digital payments and other services that VBSP can provide to better serve the poor and other policy beneficiaries.

“I think that it is extremely important for the future of VBSP to strengthen the ability and potential of serving more and more vulnerable groups, focusing on the segments not served by commercial credit institutions such as providing modern banking services to customers in remote areas. This helps VBSP take advantage of its network and customer coverage, maintain its ability of serving more clients in spite of the decreasing ratio of State subsidy, and move towards financial sustainability./.”