Viet Nam: Microfinance Development Program Subprogram 1

Sovereign Project | 42235-013

Summary

The Micofinance Development Program will support the development of a market-oriented microfinance to increase access to formal financial services for the poor, especially in rural areas. It will focus on regulatory reforms, supervisory capacity building, institutional development, and financial infrastructure development. Planned regulatory reforms will be anchored by the integration of microfinance into the formal financial market, encouraging investment in microfinance, establishing standard sets of prudential and performance requirements and with fiscal and regulatory incentives. Strenthening operational and supervisory capacities will ensure sustainability and expand outreach of microfinance. State-owned financial institutions engaged in lending to the poor and microenterprises funded by the government budget will be reformed to become sustainable community-based financial institutions operating within market principles.

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Project Name Microfinance Development Program Subprogram 1
Project Number 42235-013
Country Viet Nam
Project Status Closed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 2877-VIE: Microfinance Development Program - Subprogram 1
Asian Development Fund US$ 40.00 million
TA 8108-VIE: Supporting Microfinance Development Program
Japan Fund for Poverty Reduction US$ 500,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Finance - Finance sector development - Inclusive finance - Insurance and contractual savings
Gender Equity and Mainstreaming Some gender elements
Description The Micofinance Development Program will support the development of a market-oriented microfinance to increase access to formal financial services for the poor, especially in rural areas. It will focus on regulatory reforms, supervisory capacity building, institutional development, and financial infrastructure development. Planned regulatory reforms will be anchored by the integration of microfinance into the formal financial market, encouraging investment in microfinance, establishing standard sets of prudential and performance requirements and with fiscal and regulatory incentives. Strenthening operational and supervisory capacities will ensure sustainability and expand outreach of microfinance. State-owned financial institutions engaged in lending to the poor and microenterprises funded by the government budget will be reformed to become sustainable community-based financial institutions operating within market principles. Finally, the program seeks to develop financial infrastructure supporting the formal microfinance training, the advocacy of financial literacy on sustainable microfinance and customer protection, and credit information exchange systems.
Project Rationale and Linkage to Country/Regional Strategy ADB, in its country partnership strategy for Viet Nam, supports the Viet Nam Socioeconomic Development Strategy, 2011 2020, which aims to transform the country into a modern, productive, and equitable economy. ADB's country strategy will pursue quality of growth, focusing on the reform and renovation process through good governance, capacity development, and development of the private and finance sectors. It is in this context that the Microfinance Development Program was formulated to support government efforts in improving the overall quality and capacity of microfinance, focusing on an improved policy and regulatory environment, increased operational and supervisory capacities, and financial infrastructure development in line with the national microfinance strategy. The program will address the existing constraints on nationwide access to formal financial services, and thus (i) develop an equitable economy by promoting a robust microfinance sector with an improved policy and regulatory environment supportive of the growth of private sector operations, (ii) promote wide adoption of microfinance best practices, and (iii) increase financial infrastructure development. It will enhance financial inclusion by improving access to financial services for traditionally underserved poor households, supporting inclusive growth in line with ADB's financial sector operational plan.
Impact Greater financial inclusion and deepened financial sector.
Project Outcome
Description of Outcome Increased access of the poor women and men to sustainable and affordable microfinance services.
Progress Toward Outcome In progress
Implementation Progress
Description of Project Outputs

Created a policy and regulatory environment conducive to the development of inclusive and sustainable market-oriented microfinance

Strengthened the supervisory and regulatory capacities of the microfinance sector regulators

Strengthened credit institutions involved in microfinance to provide affordable and sustainable services to the poor

Developed infrastructure supportive of the microfinance activities

Status of Implementation Progress (Outputs, Activities, and Issues)

The IT firm engaged under the TA is in the final stages of completing their tasks. Their contract is expiring mid of September 2014. Consultants' reports have been submitted.

For the TA, on CIC component, the recruitment of the IT firm to assist CIC in enhancing its server is ongoing. Almost all the other activities under the TA has been completed.

The program loan has been disbursed in Jan 2013.

Implementation is still on going. With the assistance of international and national consultants engaged under the project, there is good progress under the TA. The consultants also conducted several workshops and trainings on microinsurance.

Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The program does not trigger the safeguard policies and is categorized as C for environment.
Involuntary Resettlement The program does not trigger the safeguard policies and is categorized as C for involuntary resettlement.
Indigenous Peoples The program does not trigger the safeguard policies and is categorized as C for indigenous peoles.
Stakeholder Communication, Participation, and Consultation
During Project Design Various ADB missions in consulting with the concerend government agencies, microfinance operating financial institutions, and development partners were conducted during project preparation.
During Project Implementation During the project implementation, a number of consultations with micofinance stakeholders will be conducted.
Business Opportunities
Consulting Services All consultants will be recruited according to ADB's Guidelines on the Use of Consultants (April 2010, as amended from time to time).
Procurement All procurement of goods and works will be undertaken in accordance with ADB's Procurement Guidelines (April 2010, as amended from time to time).
Responsible ADB Officer Eiichi Sasaki
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
State Bank of VietnamADB@GOSBV.ORG47-49 Ly Thai To Street
Ha Noi, Viet Nam
Timetable
Concept Clearance 29 Apr 2011
Fact Finding 09 May 2011 to 23 May 2011
MRM 15 Jul 2011
Approval 05 Jul 2012
Last Review Mission -
Last PDS Update 11 Sep 2014

Loan 2877-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Jul 2012 07 Sep 2012 07 Jan 2013 31 Dec 2012 31 Mar 2013 31 Mar 2013
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 40.00 Cumulative Contract Awards
ADB 40.00 05 Jul 2012 39.83 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 05 Jul 2012 39.83 0.00 100%

TA 8108-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Jul 2012 12 Sep 2012 12 Sep 2012 28 Feb 2014 31 Dec 2014 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 500,000.00 0.00 0.00 0.00 0.00 500,000.00 05 Jul 2012 481,543.24

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


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