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Updated: 2018-11-22 21:39:55

VBSP support the provision of financial services to rural and remote areas

(VBSP News) Over the world, there have been various successful models of mobile banking/ digital banking service. In Vietnam, this kind of modern financial service has recently been applied in order to improve financial inclusion for people in rural and remote areas.

Financial technology to approach remote areas

In fact, many people in remote areas in Vietnam has started enjoying these services. An example for this is the project “Mobile banking – financial inclusion and economic empowerment for the poor and women in Vietnam” implemented by the VBSP in association with Asian Fund and MasterCard, funded by the Australian Government.

The VBSP revealed that the project despite being under implementation stage has initially brought about huge and measurable economic effects for not only customers but also banks.

Regarding this issue, Mr Ha Hai An – Deputy Director of the International Cooperation Department of the SBV shared that there have been various models of mobile banking successfully applied over the world, typically in Africa, where solutions of digital currencies and agent banks have facilitated the access of people and small enterprises in rural and remote areas to banking services such as payment, saving, credit and even insurance in a safe, reliable and prompt manner with reasonable costs. These models have made a remarkable contribution to raising the account ownership in Africa to 43% of adults in 2017 from 23% in 2011.

Improving transparency

A senior officer of the VBSP affirmed that through the SMS service for reminding due date, debts and monthly outstanding balance, banks would improve their transparency and efficiency, then earn more confidence of customers who would be assured to access financial inclusion services.

At the same time, the service would help improve credit quality and cost efficiency for both banks and customers, ease the burden of cross checking, minimize time and cost for travelling, detect violations of borrowing under false names or arrogation in capital lending. Besides, the SMS service has positively affected customers’ awareness of their debts, responsibility to repay, saving… and then time and printing costs would be saved much.

The SMS service is a tool for customers to check their own information without regularly travelling to commune headquarters at the end of the year. Moreover, the customers have not to pay fees for the SMS service. That’s not to mention through this channel, customers have access to modern financial services and get familiar with digital technology facilitating the VBSP to diversify its products/ services, improve its operational efficiency in order to better serve more customers. 

“Why Mobile Banking for Vietnam? I see a great potential here in Vietnam with 65% of the population is under 30, young and active, while the current cash utilization is not effective and safe enough with risks of loss during transfer.”, shared Ms Winnie Wong from MasterCard.

Easily measurable economic effects

In fact, before using the SMS service for checking balances, the VBSP had to do it face-to-face with customers. That means it had to deliver a notice to customers demanding them to be present at the commune transaction point for the check. In case customers could not come, the bank staff had to meet the customers at home for the check.

Practically, a customer needs an average of ¼ working day for a traditional check, while an average working day of a local labourer costs 200,000 dongs. Thus a total cost for 856,608 customers to check their balances at bank counters is 42,830,400, 000 dongs.

With the SMS service, customers no longer bear an opportunity cost of half working day for checking at bank counters. On receiving messages from the VBSP, customers check the balances themselves. Then in case of differences or inquiries, customers should contact the VBSP for information and explanation. The economic benefit gained for 856,608 customers in 10 provinces is 42,830,400,000 dongs saved thanks to using this service.

For the bank, in recent time, the total messages sent to customers for checking balances amount to 856,608 with a total cost of 214,152,000 dongs for the messaging. 

With the traditional method, it takes a bank staff 1 working day to check 3 saving and borrowing groups, each group consists of 50 members. A bank staff in charge of the check is paid with an average amount of 450,000 dongs per day. Therefore totally the checking cost for 856,608 customers with the traditional method is 2,569,950,000 dongs. While with the SMS service of 250 dongs per message, it would take 10 bank branches only 214 million dongs to check with their customers, 12 times cheaper than the traditional method.

Narrowing the distance

With the actual demonstrating data, Mr Ha Hai An asserted that: “Up to now, the application of digital technology in providing banking products and services has showed many advantages in minimizing costs and maximizing benefits of customers, especially those who have limited access to basic banking services.

In Vietnam, mobile banking/ digital banking has become a hot trend among banks for broadening their scope of operation and optimizing services to customers not only in urban areas but also in under privileged regions”.

However, citing information from a Vietnamese report, Mr Justin Baguley shared that by 2025, the financial inclusion would be improved but many under privileged people may be still out of access to banking services due to geological distance and costs.

“Hopefully the better improved technology and infrastructure would support the provision of financial services to rural and remote areas, help narrow distance and minimize costs”, said Mr Justin Baguley.  



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