MICROCAPITAL BRIEF: Asian Development Bank Invests $40m in Vietnam’s Microfinance Sector

The Asian Development Bank (ADB), a development finance institution based in the Philippines, recently lent USD 40 million to the government of Vietnam in an effort to improve the country’s microfinance sector. As part of ADB’s Microfinance Development Program, an initiative focused on microfinance sectors in emerging markets, the disbursement is intended to make financial services more accessible to poor people and more sustainable, especially in rural areas of Vietnam. As part of the effort, ADB intends to “focus on regulatory reforms, supervisory capacity building, institutional development, and financial infrastructure development.” [1,2]

Comprising 67 member countries, ADB aims to support inclusive growth, facilitate regional integration and ensure environmentally sustainable growth within Asia. As of December 2011, ADB reports total capitalization of USD 71 billion, outstanding loans of USD 78.1 billion and approved equity investments of USD 239 million. The Vietnamese microfinance institutions (MFIs) reporting to the US-based nonprofit Microfinance Information Exchange (MIX) hold USD 5.5 billion in loans disbursed to 9 million active borrowers and USD 1.6 billion in deposits from 623,000 customers as of 2011.

By Sarah Benali, Research Associate

About Asian Development Bank
Established in 1966 and headquartered in Manila, the Philippines, the Asian Development Bank (ADB) is a development finance institution that consists of sixty-seven members, of which forty-eight are located in the region. ADB has three strategic priorities: to foster inclusive growth, to facilitate regional integration and to ensure environmentally sustainable growth. To accomplish these objectives, ADB uses loans, technical assistance programs, grants, equity investments and guarantees to private companies in member countries in the region. As of December 2011, ADB reported outstanding loans of USD 78.1 billion and total approved equity investments of USD 239 million.

Sources and Additional Resources

[1] Viet Nam News Story: “ADB lends $40m for micro-finance,” September, 2012,
http://vietnamnews.vnagency.com.vn/Economy/229797/adb-helps-viet-nam-develop-inclusive-market-and-oriented-microfinance-sector.html

[2] Asian Development Bank: “42235-013: Microfinance Development Program Subprogram 1,” http://www.adb.org/projects/42235-013/details

MicroCapital.org Story: “MICROCAPITAL BRIEF: Asian Development Bank, IFMR Capital to Guarantee $27m in Loans from Ratnakar Bank to Microfinance Insitution in India,” August 29, 2012, https://www.microcapital.org/microcapital-brief-asian-development-bank-ifmr-capital-ratnakar-bank-provide-partial-credit-guarantee-for-loans-to-microfinance-institutions-in-india/

MicroCapital.org Story: “MICROCAPITAL BRIEF: International Finance Corporation, BNP Paribas to Loan $25m to Vietnam’s Orient Commercial Joint Stock Bank for Small and Medium-sized Enterprises, Women-owned Businesses,” May, 2012, https://www.microcapital.org/microcapital-brief-international-finance-corporation-bnp-paribas-to-loan-25m-to-vietnams-orient-commercial-joint-stock-bank-for-small-and-medium-sized-enterprises-women-owned-businesses/

MicroCapital Universe Profile: Asian Development Bank https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Asian+Development+Bank+%28ADB%29

Microfinance Information Exchange (MIX) Country Profile: Vietnam http://www.mixmarket.org/mfi/country/Vietnam

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