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International Relation

Updated: 2017-01-04 11:04:19


Among three credit institutions providing microfinance and rural development services (the Vietnam Bank for Social Policies, the Bank for Agriculture and Rural Development and the Cooperative Bank) and 7 official microfinance institutions in microfinance market in Vietnam, Vietnam Bank for Social Policies (VBSP) has taken the lead in the number of customers and the nationwide coverage. In 2013, VBSP continues to obtain remarkable achievements over the past eleven years with the poor and other policy beneficiaries in Vietnam. Contributing to the overall success of the whole system, international cooperation has made remarkable  achievements in attracting external supporting resources for poverty reduction and social welfare in Vietnam.


Foreseeing the new sponsoring trend of donors moving from project lending to program lending, VBSP has timely changed the ODA mobilization manner to suit the new situation.  In 2013, in addition to taking advantage of all the support from international institutions in available relationship with VBSP and using multiple channels to connect with new donors, VBSP has promptly shifted to ODA mobilization through government programs. The result is VND 3,200 billion to be arranged by the Government through mobilizing sources of lending programs in 2013. This amount is larger than the amount of VND 1,300 billion funded over the projects from 2003 to 2012 of VBSP.

  1. Support for capital

In 2013, VBSP has received VND 2,500 billion from the capital source  of the Poverty Reduction Support Credit (PRSC 10) of the donors community in Vietnam coordinated by the World Bank to support the deployment of the disadvantaged students credit program, including VND 1,465 billion of borrowing capital and VND 1,035 billion of non-refundable grant capital.

  1. Technical Assistance

The Project “Supporting from State Budget for training savings and credit groups according to microfinance sector development program – ADB” values at USD 1.5 million funded by the Asian Development Bank (ADB). The objective is to strengthen the capacity of group management board and members of savings and credit groups.

ADB has approved funding for project DA 46482-001 on strengthening supervision and administration activity of the microfinance sector worth USD 01 million, including component of training to strengthen the capacity for 240 management staffs of VBSP.

  2. The Forest Sector Development Project

Under the Forest Sector Development Program (FSDP) signed between the Vietnam Government and the World Bank (WB), VBSP is responsible for financing Production Forest Plantation component. The goal of this component is to develop 56,000 ha of production forest in four provinces of central Vietnam: Thua Thien Hue, Quang Nam, Quang Ngai, Binh Dinh.

In 2005, the Ministry of Finance (MOF), on behalf of Vietnamese Government, signed a sub-agreement with VBSP to give a sub-loan of USD 27.2 million for commercial forestation loans (production forestation) with the preferential lending rate of 0.75% per year.

In 2012, the WB gave the supplementary aid for this project to complement 25,000 ha of production forest plantation in 06 provinces, including Thanh Hoa, Nghe An, Thua Thien Hue, Quang Nam, Quang Ngai, Binh Dinh period 2012-2015. The total capital allocated for VBSP is about USD 13,273,000, including funds for lending, funds for mobile banking vehicles, and funds for domestic training.

As of 31 December 2013, this project deployed in 27 districts of 6 provinces, including: Thanh Hoa, Nghe An, Thua Thien Hue, Quang Nam, Quang Ngai, Binh Dinh, the total outstanding loans reached more than VND 452 billion with 17,627 active borrowers.

  1. The Rural Income Diversification Project in Tuyen Quang province

Under an agreement between the Socialist Republic of Vietnam and the International Fund for Agricultural Development (IFAD) to implement the Rural Income Diversification Project in Tuyen Quang province (RIDP), the Vietnamese Government gave VBSP a sub-loan of SDR 1,12 million (equivalent to USD 1,43 million) with the lending rate of 0.75% per year (2003-2022).

The project aims at socio-economic development of its target groups, who are the poor and small-scale business households, suppliers of seedlings and agriculture materials at Region II and III in project area. New lending methodology of wholesale through the credit and savings groups is employed under the project.

  1. Lending program for small and medium enterprises (KFW project)

Within the Small and Medium Enterprises Development Program’s framework, VBSP was allowed by the Prime Minister to take out a loan of an amount equaling to EUR 10 million from the German Government source, which is funded through the German Reconstruction Bank (KfW) in 2 phases with 0.75% interest rate and 0.25% commitment fees.

The project aims at setting up a credit revolving fund to provide loans to small and medium enterprises (SMEs) in 22 project areas.

Up to now, the total outstanding loans were nearly VND 169 billion and 478 active borrowers.

  1. Participatory Resources Management Project in Tuyen Quang province

The International Fund for Agricultural Development (IFAD) and the Government of Vietnam (GoV) has the consent to select VBSP to implement the Participatory Resources Management Project in Tuyen Quang province (PRMP) with an amount of USD 3,724,000. The interest rate is 2/3 of the calculated rate, which is equal to the average lending interest rate to VBSP borrowers minus the operation expenditure and the norm profit.  

The project has the goal to improving income and living standards of people in the project area, especially those who are the poor in ethnic communities and have limited access to banking services.

  1. Coastal wet land development project (CWPD)

VBSP received an amount from USD 650,000 of Supporting Social Fund  of DANIDA grant to implement Coastal wet land development project (CWPD).

The project objectives are to provide credit for the poor households in project area for income generation such as: planting, animal husbandry, small scale industry and small business that must be appropriate with the general target of wet forest protection.

The project scope includes 21 communes of 12 districts in four provinces: Tra Vinh, Soc Trang, Bac Lieu and Ca Mau.

  1. The Forestation and Sustainable Forestry Project

Under the financial agreement signed between the German Reconstruction Bank (KfW) and the Socialist Republic of Vietnam to implement project ”the forestation and sustainable forestry management of natural forests in Quang Nam, Quang Ngai, Binh Dinh and Phu Yen, VBSP takes charge of opening and managing deposit accounts for farming households and rural communities in the project areas. Each project beneficiary receives a non-refundable grant through the deposit account opened at VBSP district office.

It aims to support the forestation an sustainable forestry management of 32,700 hectare of natural forests in 4 project provinces. The total grant value for KfW6 project’s components is EUR 3,712,710.

VBSP followed and managed 14,640 deposit accounts for project beneficiaries.

  1. Project “Give subsidies to VBSP to mobilize funds for its rural water supply and sanitation lending program” funded by ODA source of the UK Department for International Development (DFID)

Under the support of the target program budget support (TPBS) donors for the National Target Program on  rural water supply and sanitation (RWSS),  DFID funded VBSP £ 4 million , equivalent to USD 6 million, to contribute to the Government subsidies for VBSP period 2012-2013 in order to  increase funds lending program in accordance with the bank's current mechanism. This support prioritizes the lending to the poor households, especially ethnic minority households, to build latrines.

After two years of Project implementation (from 2012 to 2013), the lending turnover reached VND 4,285 billion with nearly 600 thousand turns of borrowers from the capital generated from the interest rate support amount and management fee of VND 32 billion in 2012 and VND 98 billion in 2013. The maximum investment amount for each clean water work or sanitation work is VND 4 million. In 2014, it is expected that number of clean water and sanitation work are created nationwide from the project are 54,300 works.

  1. Technical assistance Project “Rural household sanitation: Linking demand with supply” financed by the Department for International Development (DFID)

DFID funded USD 410,000 for the Ministry of Health and VBSP to carry out the technical assistance project, namely "Rural household sanitation: Linking demand with supply". The training and communication activities of the project are implemented to increase the percentage of the poor and near-poor households in rural areas borrowed money from VBSP to build and use hygienic latrines in 5 provinces, including Hoa Binh, Phu Tho, Ha Tinh, An Giang and Kon Tum.

When the project ended in 2013, the project achieved the objective of increasing the percentage of the poor and near-poor households in rural areas borrowed money from VBSP to build and use hygienic latrines.

During the period of implementation of training and communication activities (from 01 January 2013 to 31 October 2013), number of borrowers in implementation communes increased 2,752 (increasing by 3 times as compared to 2012), of which 597 of the poor households and 428 the near poor households, number of the poor households approaching loans increased by 8 times as compared to 2012.

Particularly, the project strengthened the close and effective coordination between public health and VBSP in bringing capital to the poor and near-poor households to build hygienic latrines.

  1. Community Hygiene Output-Based Aid (CHOBA) funded by the East Meets West Foundation (EMW), USD 3 million

This project was funded by the East Meets West Foundation (EMW), in collaboration with the Vietnam Women's Union and VBSP through savings accounts for the poor and near-poor households who borrowed money from VBSP to build sanitation facilities.

Expectedly, around 100,750 to 125,750 the poor and near-poor households will be borrow money to build sanitation facilities in 8 provinces: Hai Duong, Ninh Binh, Thanh Hoa, Ha Tinh, Quang Binh, Tien Giang, Dong Thap, Tra Vinh.

In 2013, the project has signed the memorandum of understanding and issued the guidance to implement the project to send to 8 project provinces.

  1. Project “Disability-inclusive finance: small finance for businesses employing, serving or owned by persons with disabilities” funded by the Nippon Foundation of Japan with the grant of USD 600,000 is piloted in Da Nang city.

The overall goal of this grant project is to promote micro and small enterprises which employing, serving or owned by PWDs so that the PWDs can have steady jobs or they can start and expand their own micro or small businesses to generate income sustainably and have economic independence, sustainable livelihood.

In 2013, the project activities were successfully conducted in Da nang city. As of 31 December 2013, the project has disbursed 2,220 million dongs to 37 borrowers, who are the individuals and enterprises employing, serving or owned by persons with disabilities. 

In addition, the Project Management Unit has designed and compiled the handbook of the project for the borrowers and the credit manual of lending procedures and project implementation for systematic performance.

  1. Technical assistance project “Rural household sanitation: linking demand with supply” funded by the Department for International Development (DFID) with the grant of USD 450,000

With the aim to increase the proportion of poor and close-poor rural households among all households who use VBSP loans for building latrines; in 2013, under the project, the following activities are implemented: (i) Design and print the hand book for the motivators and training materials for the Savings and credit groups; (ii) Design and print the leaflet and posters for communication at grassroots; (iii) Conduct training courses for staff at provincial level to equip with knowledge and information on household sanitation, safe water supply and RWSS lending program. In addition, the project also conducted the  inter-parties meetings and supervision and evaluation trips to ensure the effective and efficient implementation of project at grassroots.

For the period of 01 January 2013 to 31 October 2913, there were 2,752 households received RWSS loans, including 1,025 poor and near-poor households building 997 hygiene latrines. In comparison to the number in 2012 (before the project implementation), the number of poor households accessing to RWSS loans to build latrines is eight fold increase. It is recognized as the initial achievements of the project.

  1. Project “Strengthen capacity of VBSP through improving skills of district office managements, piloting a new overseas remittance service and conducting the research on economic impact of VBSP policy credit” funded by Ford Foundation (Ford II) – the phase piloting Western Union overseas remittance service

In 2013, VBSP has collaborated with the Bank for Investment and Development of Vietnam (BIDV) to open 20 points of overseas remittance at VBSP provincial branches in Da Nang, Ninh Thuan, Thua Thien-Hue, Nghe An, Quang Binh and Phu Yen, increase the number of overseas remittance points up to 235 in 51 provinces and cities all over the country.

In 2013, a number of VBSP district transaction offices have received the award for the category of “Potential agent” for its outstanding achievements in Western Union overseas remittance.


Foreign relations with international organizations and associations

In 2013, VBSP has continuously enhance the membership at international organizations such as: the Asia-Pacific Rural Agriculture and Credit Association (APRACA), the Banking the the Poor (BWTP), the Global Microcredit Summit (MCS) and the Microfinance Information Exchange (the MIX) etc, through updating information and introduction of VBSP operation on their forums to attract and find out the potential supports from the donors all over the world.

Furthermore, VBSP also has actively contact the international finance institutions and international development agencies such as Asia Fund, United States Agency for International Development (USAID), Office for Development Cooperation of Luxemburg, Export-Import Bank of Korea (Kexim), Korea International Cooperation Agency (Koica) etc.,

Participate in the study programs abroad

In 2013, under the framework of cooperation with the Bank for Social Policies of Lao People’s Democratic Republic (NBB), VBSP sent a delegation to NBB for a study visit. During the trip, VBSP delegation had visit to NBB branches, jointly held a summing-up workshop for the cooperation period 2012-2013 and participated in the signing ceremony of the cooperation plan period 2014-2015.

Conduct the study tour programs for international organizations

VBSP always pays great attention to form its good image and improve its position in relationship with international organizations and become a bank to receive and implement effectively and efficiently the grant and investment from international donors. Over the past years, with the recognized position and reputation, VBSP is considered a good destination to hold the international study tour programs.

In 2013, VBSP has received the following delegations:

- 02 delegations with 26 participants from Palli Karma Sahayaka (PKSF)-Bangladesh to learn and exchange information, knowledge and experiences on microfinance and credit for medium and small enterprises in Vietnam.

- 02 delegations with 20 staff of NBB to attend the summing-up workshop for the cooperation between two banks and come to an agreement on the cooperation plan for the coming time.

- 01 delegation with 07 participants from Development Academy of the Philippines (DAP) – the Ministry of Agriculture to learn about VBSP operation and potential cooperation in the future.

In addition, VBSP also received many international agencies and organizations to learn about VBSP’s operation, such as: the World Bank, International Finance Cooperation (IFC), Nippon Foundation-Japan, TYM fund, Handicap International, International Monetary Fund (IMF), the National Agency for Credit Management of Algeria (ANGEM), the Health Council of Netherlands, the experts team form Chemonics organization, Swedish International Development Cooperation Agency etc,. These meetings are good opportunities for VBSP to introduce its operation, share experiences and explore the potential cooperation and support from the donors.

Through these activities, the foreign relations and project development and implementation of VBSP are acknowledged as an effective and closed cycle, which has made impact on many aspects of VBSP operation in particular and on the target groups of VBSP and VBSP social performance for the social welfare in general.



Poor Households

Lending to poor households 6,6%/year
Lending to poor households in 64 poor districts as stipulated by the Government Resolution No.30a in 2008 3,3%/year

Near Poor Households

Lending to near poor households 7,92%/year


Lending to disadvantaged students 6,6%/year

People in need of loans for job creation

Lending to business establishments owned by war invalids and handicapped persons 3,3%/year


Term Deposit Rate
Overnight 3,04%/year
1 week 3,23%/year
2 week 3,5%/year