Stay Connected:

News & Events

Updated: 2020-10-09 09:35:10

Preparing the poor for digital transformation

(VBSP News) Viet Nam has emerged as one of the most digitized economies in the ASEAN group. Recent data shows that nearly 67% of the population has access to the internet and that there are over 140 million mobile phone subscribers, representing more than 70% of the adult population (Asia Foundation 2020).

Viet Nam has emerged as one of the most digitized economies in the ASEAN group

However, despite Viet Nam’s good internet coverage, use of technology to conduct financial transactions remains low and most people rely on cash for payments and banking. To remain competitive in an increasingly digital marketplace, local financial service providers are accelerating their efforts to develop digital financial products and services for their clients. This includes Viet Nam’s largest microfinance provider, the state-owned Vietnam Bank for Social Policies (VBSP), which mainly serves poor and marginalized groups. VBSP views digital transformation as a way to increase its operational efficiency while enabling greater economic opportunities for those at the base of the economy, especially women and other marginalized groups.

Government response

Much of Viet Nam’s success in developing its digital economy stems from government efforts to promote and enable digital transformation. Following the government strategy, which includes a dedicated scheme to progress non-cash payments, in 2017 VBSP launched the program Mobile Banking - Financial Inclusion and Economic Empowerment for the Low-Income Population and Women in Viet Nam. This initiative aims to support the digitization of VBSP and its capability to provide a full range of digitally enabled financial products and services to clients, especially women running microenterprises, who lack access to traditional banking services.

VBSP launched the program Mobile Banking - Financial Inclusion and Economic Empowerment for the Low-Income Population and Women

To achieve success, VBSP must overcome the unique challenges faced by its clients, such as low literacy levels and lack of experience with digital technology. VBSP’s approach focuses on gradually building client capability and demand for digital finance by first establishing basic connections between digital technology and clients’ banking experiences. For Phase 1 (2016 - 2018), the project piloted an SMS notification service to enhance communication with clients. Initially, notifications were limited to basic information such as reminders about payment of principal, changes to loan accounts, overdue debt rescheduling etc. Importantly, these SMS notifications have represented the first time many of VBSP’s clients have ever experienced any connection between digital technology and banking. This is viewed by VBSP and its partners as an important first step in raising awareness among clients and building trust and confidence in the use of mobile phones for banking.

As part of Phase 2 (2019 - 2021), the SMS service has been improved to include more features, such as issuing e-receipts for loan interest collection, and customer support via SMS. A dedicated financial literacy application for smart phone users has also been developed to drive greater understanding of financial products and services and financial management, encourage savings etc. Each of these actions are important steps that VBSP and its partners have taken to prepare the client base and develop demand for DFS, including digital payments and deposits, which will become available when VBSP launches a full mobile banking platform during the final stage of the project.

Program impact

To date, VBSP has reached over 5 million clients (51% being women) with SMS notifications (BPP 2020). These notifications have helped clients by enhancing transparency in loan management, improving planning for debt payment and encouraging saving. They have also been instrumental in raising awareness of the potential of mobile phones and other technology for accessing financial products and services. By building this foundation, VBSP expects that clients will be better prepared to accept digital finance products and services that will become available when additional mobile banking services are launched, and to use them effectively.

The Foundation for Development Cooperation



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