Viet Nam: Financial Sector Development and Inclusion Program

Sovereign (Public) Project | 49331-001 Status: Proposed

ADB will use a programmatic, policy-based lending modality to support the government's reform agenda. This approach, which combines extensive policy dialogue with technical assistance (TA), recognizes the long-term time horizon required for financial sector development, the need to sequence reforms, and the catalytic role played by ADB.

Project Details

Project Officer
Nguyen, Duong T. Southeast Asia Department Request for information
Country
  • Viet Nam
Sector
  • Finance
 
Project Name Financial Sector Development and Inclusion Program
Project Number 49331-001
Country Viet Nam
Project Status Proposed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan: Financial Sector Development and Inclusion Program
Ordinary capital resources US$ 200.00 million
TA: Financial Sector Development and Inclusion Program
Technical Assistance Special Fund US$ 900,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Finance - Finance sector development - Inclusive finance - Insurance and contractual savings - Money and capital markets

Gender Equity and Mainstreaming Some gender elements
Description ADB will use a programmatic, policy-based lending modality to support the government's reform agenda. This approach, which combines extensive policy dialogue with technical assistance (TA), recognizes the long-term time horizon required for financial sector development, the need to sequence reforms, and the catalytic role played by ADB.
Project Rationale and Linkage to Country/Regional Strategy To achieve middle-income country status and further reduce poverty by 2020, Viet Nam will need to continue reforms under the Socio-Economic Development Strategy (SEDS) 2011 2020, including efforts to develop its financial sector and broaden access to finance. The Financial Sector Development and Inclusion Program will continue ADB's support to financial sector development and will: (i) enhance financial sector stability, (ii) continue developing and deepening the domestic capital markets, and (iii) promote financial inclusion. The program is consistent with ADB's interim country partnership strategy and is included in the country operations business plan, 2016 2018, approved in 2015.
Impact The program is aligned with the Socio-Economic Development Strategy (SEDS) 2011 2020 and will support the government's efforts to increase the role of the nonbank financial sector and deepen the financial markets in Viet Nam.
Outcome A deeper, more inclusive financial sector.
Outputs

1. Financial sector stability increased.

2. Nonbank financial sector deepened.

3. Financial inclusion promoted

Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

International NPL resolution expert (Individual Consultant 4 person-months). The expert will support the government's efforts to increase financial stability. The expert will brief SBV's drafting group on international experience on NPL resolution and problem bank resolution, including the likely structure of an enabling legal and regulatory framework, as well as solutions and sound resolution processes. The expert will review the draft law package and provide comments and recommendations to strengthen the documents in line with international practices. Finally, the expert will lead two workshops to share international experience on NPL and problem bank resolution with stakeholders.

National NPL resolution expert (Individual Consultant 4 person-months). The expert will support the government's efforts to increase financial stability. The expert will provide support to the international NPL expert with regard to research of current laws covering NPL and problem banks, as well as any associated laws which may impact of the resolution of either. The expert will also provide translation and logistical support.

International capital market expert Taxes and fees (Individual Consultant 2 person-months). The expert will support the government's efforts to deepen the capital market. The expert will analyze and prepare a report on the current friction costs in the domestic market in two discrete areas; government bonds, and all other securities. For the purpose of this assignment, friction costs will include taxes, regulatory compliance costs, fees for participation, and any other unusual costs that serve to deter investors. If necessary, coats can be grouped by category of investor (e.g. domestic vs. foreign, retail vs. institutional investors).

National capital market expert Taxes and fees (Individual Consultant 2 person-months). The expert will support the government's efforts to deepen the capital market. The expert will provide support to the international capital market tax expert with regard to research of current taxes, regulations, practices and conventions. The expert will also provide translation and logistical support.

International securities market expert (Individual Consultant 3 person-months). The expert will support the government's efforts to deepen the capital market. The expert will review and assess the current Law on Securities law, its implementing regulations, and any proposed draft of an amended law on Securities. The expert will contrast the proposed amendments, and propose amendments to broaden and deepen the Vietnamese capital market.

International derivatives market expert (Individual Consultant 2 person-months). The expert will support the government's efforts to deepen the capital market. The expert will design, develop, and deliver training to market stakeholders and regulators on the following topics: i) derivatives products and their definitions, ii) pricing methodologies and structures, iii) usage and applications in the financial sector, iv) pre-conditions required to support the introduction of derivatives to Viet Nam, including the introduction of short-term benchmark rates, ISDA legal opinions, etc., v) the role of OTC markets, exchange and clearing houses, vi) accounting and taxation applied to derivatives products; and vii) recent regulatory developments in the global OTC derivatives markets.

International insurance regulatory expert (Individual Consultant 3 person-months). The expert will support the government's efforts to build an institutional investor base. The expert will provide an assessment on the capital level of life insurance companies in consideration of their size, operation and risk profile, identify the gaps and impediments to the adoption of risk-based capital in Viet Nam, and propose an implementation roadmap and action plan provide necessary trainings for staff of ISA on RBC.

International Fintech expert (Individual Consultant 2 person-months). The expert will support the government's efforts to broaden financial inclusion. The expert will conduct an assessment of the current Fintech ecosystem including the regulatory environment, business landscape, sub-sectors, market trends, existing impediments, opportunities and risks. The expert will then propose recommendations to create an enabling environment for Fintech and how to regulate the sector.

International microfinance expert (Individual Consultant 2 person-months). The expert will support the government's efforts to broaden financial inclusion. The expert will assess the training needs of microfinance practitioners (e.g. boards, management, and staff) on governance, accounting, information systems, credit management, risk management, regulatory and reporting requirements, and other practices needed for a sound microfinance operation. The expert will then design and deliver training programs based on SBV's prudential regulations and provide mentorship support to meet the specific prudential requirements of the MFI operators, as necessary.

International micro-insurance expert (Individual Consultant 1 person-month). The expert will support the government's efforts to broaden financial inclusion. The expert will assess the training needs of the sociopolitical organizations engaged in micro-insurance and develop appropriate training modules and materials based on the related Prime Minister's Decision and MOF-ISA's regulations of micro-insurance operations by sociopolitical organizations.

National project coordinator (Individual Consultant 6 person-months). The national project coordinator will work closely with resident mission staff to organize meetings, training workshops and events, and liaise with government counterparts and different stakeholders. In addition, the national project coordinator will arrange travel and logistics for missions of international consultants and the ADB project team, translate any reports, briefs, and other material as requested by the consultants, ADB project team or government counterparts, and will assist consultants and the ADB project team complete relevant research.

Procurement The executing agency for the TA will be the SBV. The implementing agencies for the TA will be the SBV, the MOF and the SSC. The TA will be implemented over 36 months from October 2017 to September 2020. The consultants will work on an intermittent basis and will be engaged in accordance with ADB's Guidelines on the use of Consultants (2013, as amended from time to time).
Responsible ADB Officer Nguyen, Duong T.
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
State Bank of Vietnam
47-49 Ly Thai To Street
Hanoi
Vietnam
Timetable
Concept Clearance 22 Apr 2016
Fact Finding 13 Feb 2017 to 17 Feb 2017
MRM 23 May 2017
Approval -
Last Review Mission -
Last PDS Update 03 Apr 2017

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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