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International Relation

Updated: 2016-08-03 14:46:11


(i) Project on subsidies to mobilize sources for lending for safe water and rural environment sanitation funded by Department for International Development (DFID) and valued at 4 million pounds (in equivalent with 140 billion dongs); (ii) Technical Assistance Project “Rural household sanitation: Linking demand with supply” for VBSP and Ministry of Health funded by DFID and valued at USD 450,000; (iii) Supplement funds for Project of Forest Sector Development: supplemented funds for lending estimated at USD 13,680,207 and supplemented funds for technical assistance estimated at USD 1,880,000 funded by the World Bank (WB); (iv) Successful pilot and nationwide scale-up of remittance service as an dealer of Western Union in 52 provinces among total 62 provinces all over the country. Besides approved projects, many other proposals in processing are very promising, including: (i) Under the loan for program of Microfinance Development valued at 40 million USD, Asia Development Bank (ADB) schedules around USD 900,000 for technical assistance for VBSP, People’s Credit Fund and Banking Academy under the agreed funds structure; (ii) Project“Microfinance plus  services for business owned by people with disabilities” piloted in Da Nang funded by Nippon Foundation and valued at 10 billion dongs; additionally VBSP has received many international delegations for study programs as well as sent its delegates to international events.

As limit in sources is challenging not only VBSP but also other microfinance institutions, VBSP has directions to become more self-sufficient in funds through diversified mobilization channels and sources for subsidies for the gap between mobilization rate and lending rate. Under the framework of supporting grants for the National Targeted Program on Rural Water Supply and Sanitation (NTP on RWSS),VBSP submitted DFID the proposal on subsidies to mobilize funds for SWSS lending  valued at 4 million pounds (in equivalent with 140 billion dongs) under the prevailing regulations of Vietnam’s Government. VBSP has designed and finalized the proposal “Project for subsidies to mobilize funds for RWSS lending of VBSP” and sent to the donor and relevant ministries. In the approval process, VBSP has faced with many challenges not only in persuading the donors but also in looking for support from state agencies in policy and mechanism for project implementation. After a long time of negotiations and discussion with the donor and relevant ministries (Ministry of Finance, Ministry of Agriculture and Rural Development, Sate Bank of Vietnam), the proposal was officially approved on 31 May 2012. It is estimated to support funds mobilization for the outstanding loans of around 3,000 billion dongs in RWSS lending from 1st June 2012 to 31 December 2013. The project prioritizes its lending to poor households, especially ethnic minorities, who would like to take out loans to pay for latrines. Therefore, the project is thought to make contribution in realizing general goals of NTP on RWSS and VBSP’s credit targets in the situation of funds shortage and to improve the living standards of the poor and other policy beneficiaries as well. 

Also in the framework of NTP on RWSS phase III 2011-2015, international donors scheduled one part for technical assistance for RWSS agencies of Vietnam, including Ministry of Health and VBSP. VBSP actively and constructively discussed with the donors and designed the technical assistance proposal on RWSS. The project “Rural household sanitation: linking demand with supply” was officially approved on 1st March 2012, in which Health Environment Management Agency (VIHEMA) in charge and VBSP in collaboration. The project is now completing some procedures for officially launch. Many activities in the project will be implemented to increase the number of poor households in rural areas taking out loans to pay for latrines, in contribution to successful realization of general goals of NTP on RWSS.

Besides newly approved proposals, WB has decided to allocate VBSP with supplemented funds for the project of Forest Sector Development to scale-up funds volume and project areas. Based upon the effective and efficient implementation of project over the past years, VBSP is selected to receive estimated USD 13,680,207 as the supplemented funds from WB for plantation of around 25,000 ha of production forest in six provinces in the middle region, namely: Huế, Quảng Nam, Quảng Ngãi, Bình Định and two new provinces Thanh Hóa, Nghệ An for period 2012-2015. Additionally USD 1,880,000 will be used for technical assistance. VBSP has currently completed required procedures to receive the supplemented fund. It reveals the fact that the situation and prestige of VBSP is improved on the view of international donors.

To implement the strategy to diversify products and services, international activities of VBSP focus not only on looking for grants for piloting but also on scaling-up new products after project finish. In the framework of project “Strengthening capacity of VBSP through improving skills of district branch management, piloting a new oversea remittance service in rural communes and testing the progressive poverty index as a targeting and evaluation tool” funded by Ford Foundation (known as Ford II), VBSP successfully piloted new remittance service in Thanh Hoa province. After successful piloting, VBSP has scaled-up the Western Union service in 52 provinces among 62 provinces nationwide to provide remittance service for the poor and policy households, rural households and those who are borrowers of lending program for overseas working for limited term and to mobilize more funds in the area. This is the second successful piloting and nationwide scale-up of new services, in addition to the savings product for the poor. VBSP’s capacity in designing and developing new financial products and services is recognized.

Besides newly approved or expanded projects, VBSP is hard-working to ask for approval for many other proposals.  Under the structure of ODA sources forVietnam’s Government, ADB offers the loan for program of Microfinance Development valued at 40 million USD. ADB, VBSP, State Bank of Vietnam and Ministry of Finance has got an agreement on the technical assistance funds for VBSP, People’s Fund and Banking Academy at around USD 900,000. The funds will be used to finance technical assistance activities at deeper and broader approach to ensure higher quality, more extensive and more practical training. Although VBSP currently has faced with some difficulties, VBSP actively works with the donors and relevant ministries to find out propitiate solutions in line with requirements and purposes of the donors as well as of Vietnam’s Government.

Currently many big donors have trend in offering grants through Vietnam’s Government to require more innovations in mechanism and policy, VBSP pays more attention to work with donors who are non-government organizations to implement pilot projects. Therefore VBSP has worked with the Nippon Foundation of Japan – a foundation with the goal of peaceful and prosperous global society and many charity supporting activities in 100 countries all over the world and in Vietnam for the past 10 years. VBSP has had a meeting and worked with experts from the Nippon foundation to design and submit the proposal ““Microfinance plus  services for business owned by people with disabilities” in Da Nang. The Nippon Foundation will offer VBSP around 10 billion dongs for a revolving fund for lending to people with disabilities in Da Nang city. The proposal which was appraised and highly appreciated by the Nippon Foundation is promising to be approved in 2012.  

As the leading microfinance organization in Vietnam, VBSP has continuously received many international delegations for study tour programs on microfinance and poverty alleviation in the first six months of the year. For the forth and fifth times VBSP designed the study tour programs for Palli Karma Sahayaka (PKSF) -Bangladesh (in April and June 2012). VBSP not only shares its experiences and best practices but also holds training on professional skills and knowledge for the delegations of Policy Bank of Lao People’s Democratic Republic (Nayoby Bank). VBSP successfully held two training courses on VBSP’s professional knowledge and IT for Nayoby Bank in May and June 2012.   

In addition, VBSP actively participated in international forums and meetings for experience exchange and potential cooperation in the coming time. VBSP sent the delegation to attend meetings and activities of Asia-Pacific Rural Agriculture and Credit Association (APRACA) in Cambodia by the end of May and at the beginning of June 2012. During the trip, VBSP staff has learned a lot of experiences in supporting the poor households and rural households stably with many other assistance in production, processing, transporting and marketing products etc,. in addition to credit support. It is expected to apply these valuable lessons for operation in the coming time.

The international cooperation activities are remarked with many approved, expanded or promising projects in the first six months of 2012. Although there are still many challenges for microfinance sector in general and VBSP in particular, international cooperation activities actively and creatively overcome every difficulties and make contribution in gaining general goals of the whole network.



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