Stay Connected:

Press Release

Updated: 2017-02-27 21:34:14

Press Release: Mobile Phone banking – Financial inclusion and economic empowerment for the low income population and women in Vietnam

Over the past decade, Vietnam has undergone a process of information technology development with coverage of telecommunications network throughout the country. According to the Ministry of Information and Communications, by the end of 2015, the number of mobile subscribers reached nearly 130 million, in which 3G mobile broadband subscribers was approximately 33 million. The use of mobile electronic transactions such as banking services through mobile phones has been deployed by commercial banks in Vietnam, however, cash transaction is still the primary means of payment and banking. The Government of Vietnam is encouraging the use of information technology to gradually replace the habit of cash transactions and the government has issued a number of documents regulating basis for electronic transactions.

Image result for nong dan viettel

                                                                                                                                Photo source: Internet

The use of mobile phones is to create favorable conditions for small scale financial transactions which are increasingly used and recognized as a tool to expand the access of financial services to the poor and low-income households in many countries around the world. However, in Vietnam, there has not yet microfinance service providers deploying mobile banking services via mobile phones in serving their clients. This technology is also seen as a potential solution to help service providers improve governance capacity through reducing costs, improving transparency and diversifying services.

 The technology of electronic banking including Mobile Phone Banking is expected to contribute to support Vietnam Bank for Social Policies (VBSP) to improve management capability, enhance information transparency, extend coverage of community outreach and diversify products and services to better meet financial needs of various customer groups, especially the poor and other policy beneficiaries, low-income households and women in rural, mountainous, remote areas and islands.

 Network and operation of VBSP

 Founded in 2002 as a state-owned credit institution, VBSP quickly becomes the biggest microfinance service provider in Vietnam and one among five biggest microfinance institutions in the world, providing preferential loans and savings products for the poor, near-poor households and other policy beneficiaries. Currently, VBSP is serving nearly 07 million active customers (of which nearly 80% of customers is living in rural areas), with more than 08 million loans and 06 million savings accounts. VBSP headquarters is in Hanoi, with 63 branches in provinces/cities, 629 district transaction offices and over 9,000 employees nationwide.

 To expand access to the poor at a maximum level, VBSP collaborates with four mass organizations - Women's Union, Farmers ‘Association, Veterans’ Association and Youth Union - to establish and manage nearly 200,000 Savings and Credit groups in more than 11 thousand communes nationwide. VBSP conducts  transactions with customers at least once a month (in a fixed date of every month) at commune transaction points all over the country, making service delivery system become friendly, accountable and accessible to the community, saving time, travel costs and transaction cost for customers and policy beneficiaries.

 Results of feasibility study of Mobile banking service application

 In 2014, VBSP has collaborated with The Asia Foundation - the sponsor, to perform a pre-feasibility study: "The application of new technologies in banking services via mobile phones for the poor and policy beneficiaries." The results of the study showed that, with favorable input conditions and a positive environment, the deployment of banking services via mobile phones for VBSP should lead the bank to become more effectiveness, helping VBSP to achieve its sustainable development goals. As recommended by the feasibility study and according to VBSP’s the plan on enhancing technology application, VBSP will deploy the application of new technologies in its banking services via mobile phones steps by steps to facilitate the bank itself and its clients to be familiar with new changes in the system as well in using mobile phone to transact with the bank.

 Public - private cooperation projects “Mobile banking – Financial inclusion and economic empowerment for the low income population and women in Vietnam” (referred to as Mobile Banking Project Phase 02)

 After successful implementation of the pre-feasibility study on mobile application, VBSP collaborates with The Asia Foundation and MasterCard to implement the Project “Mobile banking – Financial inclusion and economic empowerment for the low income population and women in Vietnam” supported by the Australia Government under the Business Partnership Platform (BPP). 

Long-term goal of the project is to enhance and improve access to comprehensive financial services for the poor and other social policy beneficiaries, particularly micro-enterprises managed by women.

 Specific objective of the project is expected to achieve by the end of five years period of project implementation, when VBSP complete pilot implementation and expand mobile banking services:

(i) Business goals: Deploying banking platform via mobile phone is a requirements needed to increase efficiency and transparency of information between VBSP and customers, reducing time and costs of transaction; improve debt reconciliation process, reduce the rate of delinquency and risk of fraud by simplifying processes and providing additional products and services to customers.

(ii) Social development goals: This project represents an important step in renewing the financial sector in Vietnam, and it is consistent with the recommendation of the Government of Vietnam to boost digital payment to achieve universal finance. The construction and expansion of the first banking platform via mobile phone in VBSP will help this largest microfinance service provider to provide flexible, safe and convenient financial services to seven million customers, most of whom live in rural areas with low-income and to facilitate millions of others who are working in urban areas to easily transfer money to family in remote areas.

(iii) Partnership Goals: The cooperation between VBSP, MasterCard and The Asia Foundation is expected to last for five years before eligible deployment and scaling up nationwide, with the first three years focusing on piloting and application of technology at selected branches. With support and cooperation from the Fund, VBSP will establish cooperation with MasterCard to help improve implementation of social and business goals for both sides. This will be the first public-private partnership between VBSP - the State-own bank and MasterCard Ltd.

 Business model and project implementation approach

 The project will be implemented in two stages as follows:

 Stage 1: VBSP shall launch SMS notification (messages via mobile phones) to periodically update transaction information to clients for transparent communication, helping the clients to collate transaction information with group leaders, remind them of interest and debt payment etc. VBSP started preparation for deployment of the SMS notification service in 63 provinces and cities nationwide by the end of 2016 (Information Technology Center is in charge of implementing, within the framework, this project will support some capacity building activities, training and communication on SMS banking service).

 Stage 2: VBSP shall pilot Mobile Phone Banking services for clients (group leaders or borrowers) to use their mobile phone to firstly effect some transaction as payment of interest, loan installments, making deposits. Then, VBSP shall gradually expand services to effect payments on mobile platforms such as money transfers, bill payments, utility payments, insurance premiums etc. VBSP will deploy the mobile banking services - providing banking transactions via mobile phone use shall be deployed in mid 2017. This phase shall be pilot to evaluate effectiveness and gradually expanding value-added services on mobile platforms to serve its clients’ needs.

 From practical experiences in providing mobile banking services by different commercial banks in Vietnam, VBSP chooses the option of partnering with a reputable technology partners who already have a firm telecommunications infrastructure instead of building a new one. This option will reduce difficulties, save a lot of investments in equipments and large upfonts and human resource development costs. In addition, building a new one will also not advisable if the investment period last long or the technology become obsolescence, the investment shall be a waste and cannot offset. This will be also the first public-private partnership in Mobile banking, in which VBSP cooperates with technology partners having available telecommunications infrastructure. VBSP plans to cooperate with feasible technology partners having advance technology infrastructure in the pilot phase, and one of them is MasterCard.

 The Project is tentatively last for a period from 3-5 years. Implementation timing in the first year is from January to end of November, 2017. This is public-private partnership so VBSP will work with MasterCard on agreements of amount investments and contributions from each side. In addition, related costs for all capacity building for VBSP staff, planning process and communication about the new services to clients are supported by the the Australia Government.

 The application and expansion of banking platform via mobile phones will facilitate VBSP in providing flexible, safe and convenient financial services to seven million customers. In the long run, the project will contribute to digital payment promoting process to achieve universalisation of finance, particularly for low-income households in rural and remote areas, orienting to gradually reducing payment by cash in society.

 In addition, the project also has a tremendous social impact to economic empowerment for women. In details, through training and capacity building, the project will provide knowledge and enhance opportunity to use information and communication technology and banking services via mobile phones to customers and SCGs leaders who are mostly women. The application of Mobile banking in VBSP also helps many women operating micro-enterprises to increase access to formal financial services and business improvement.

The Hon Julie Bishop MPMinister for Australia Foreign Affairs made a speech at ANU Australasian Aid Conference, 15 Feb 2017 “a Business Partnerships Platform is launched to boost work with business to tackle development challenges in our region. Under the Business Partnerships Platform, the department of Foreign Affairs and Trade is working with MasterCard, Vietnam’s Bank for Social Policy and The Asia Foundation to deploy the first mobile banking platform for low income populations in Vietnam”.

Minister for Australian Foreign Affairs 





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