Efficiency of micro-finance activities improved

The State Bank of Vietnam (SBV) and relevant agencies have given their backing to a proposal to change the status of organisations involved in semiofficial micro-financial activities into officially recognised legal entities to help raise more funds for hunger eradication projects.

Semiofficial micro-financial activities are usually included in projects that are sponsored by non-governmental organisations or mass organisations, funded with budget capital or member contributions. These projects are considered successful in approaching poor customers.

The Vietnam Microfinance Working Group of the Vietnam Union of Friendship Organisations hosted a seminar to assess these activities on Feb. 26.

Deputy Head of the SBV Banks Department Truong Ngoc said that despite the advantages to the customer, compared with other financial organisations, the market share of semiofficial micro-finance activities is just 5-6 percent of the total value of organisations involved in micro-finance activities for the poor.

“If these organisations are changed into those with legal entity status to operate under the Business Law, they will be equal with the others in mobilising capital in the market to give better help to the poor,” Anh said. The SBV has received three applications from organisations that want their status changed into micro-finance organisations, he added.

Together with finalising the legal procedures necessary to boost the development of the micro-finance sector, the central bank is lending its weight to the establishment of the Vietnam Microfinance Association. The association is expected to protect the legitimate rights and benefits of micro-finance organisations. It will also coordinate with the SBV to lobby the Government regarding issues that concern microfinance activities.

The French Development Agency and the Asian Development Bank have pledged 3 million USD to help Vietnam’s micro finance sector fund personnel training for its professional organisations.

The Social Policy Bank, the Bank for Agriculture and Rural Development and other organisations licensed by and operating under the supervision of the SBV currently account for up to 90 percent of the country’s market share for micro loans./.

VietNamNet/VNA

>   Non-residents to pay income tax (27/02/2009)

>   Exchange rate to stay stable, says bank Governor (26/02/2009)

>   Shipbuilder plans to sell $400 million worth of bonds overseas (26/02/2009)

>   Disbursement slow, banks seeking borrowers (26/02/2009)

>   Ministries differ, milk tax issue put on PM’s table (26/02/2009)

>   Gold declines on slowing investment demand (25/02/2009)

>   No plan to adjust exchange rate (25/02/2009)

>   SBV Governor meets with Japanese Ambassador to Vietnam (25/02/2009)

>   ASEAN Stock Exchange Alliance Supports Regional Integration of Capital Markets (25/02/2009)

>   Compulsory reserves rate lowered (25/02/2009)