Luận văn some solutions to improve micro savings product in vietnam bank for social policies

The Assoviation of Southeast Asian Nations Automated Teller Machines Board of Directors Bank Rakyat Indonesia Chief Lxecutive Officers Consultative Group to Assist the Poor Savings and C

“Some solutions to improve micro-savings product in Vietnam

Bank for Social Policies”

Author:Nguyen Thanh Phuong Chi Advisor: Dr Vu Duc Nghia

Hanoi, June 2017

ACKNOWLEDGEMENT

First of all, 1 would like to express the deepest gratitude to the teachers of the Intemational School, Vietnam National University and Nantes University of France during my participation in the Master of Fmance, Banking and Insurance Program

‘Through the lessons and experiences achieved during my master studyinghelps me further

referred to a variety of practical resources to complete the graduation research project

I would like to convey the sincerest thanks to my advisor, Mr Vu Duc Nghia for

providing me expert guidance, for reading this rescarch subject and offering constructive comments and for his support during, writing process of this assignment

L would like to thank to my colleagues and senior officers of Vietnam Bank for Social

Policies for praviding me helpful data, instructions and encouragement

T would like to make the commitment that this is the assignment that I try our best to

study and develop as well as it is published at the first time

Hanoi, June 2017

Nguyen ‘Thanh Phuong Chi

1.1.3 Chamels of ricro-savings mobilization

1.14, Main differences between micro-savings with other general savings products 1

1.2.1, Requircments for a miero-savines produg 12 1.2.2 Criteria to access a micro-savings product - 13 1.2 3 Faclars affecting micto-savings mobilization of MFT so 18 1.2.3.1 Internal £ACHOIS ccecssssseseserateesiaunsieisinimenianasienaeinsaasienass LS

1.3 Some suecessEtl institutions in mero savings in the w world a 1D 1.4 Miero-savings landseape Ìn Victwa se sceezearsrisrireereo, 2Í 1.#.Í Tarptledl CHEOMHEFS à cài hesee -Ö 2Í

2.1.3, Operation of Vietnam Bank for §oeial Policas - -

2.2.1 Backgronnd of micro-savings scrvicas in Vikram Bank for Sooial Polieos 39

The Assoviation of Southeast Asian Nations Automated Teller Machine(s)

Board of Directors Bank Rakyat Indonesia Chief Lxecutive Officer(s) Consultative Group to Assist the Poor Savings and Credit Groups

The Global Development Rescarch Center Information technology

Lifl Above Poverly Organization Microfinance Information Exchange, Ine Microfinance institution(s)

Return on Assets Return on Equity Rotating savings and credit associatian(s) State Bank of Vicar

Uniled States Dollar Vietnam Dong

Point of sale

In addtion to introductions, conclusion annsxes and references, the topic includes 3 chapters as

follows:

Chapter 1: Theoretical aspects of micro-savings

Chapter 2: Current status of micro-savings mobilization in Vietnam Bank for Social Policies

Chapter 3 Some solutions to improve the micro-savings product of Victnam Bank for Social Policies

In addtion to introductions, conclusion annsxes and references, the topic includes 3 chapters as

follows:

Chapter 1: Theoretical aspects of micro-savings

Chapter 2: Current status of micro-savings mobilization in Vietnam Bank for Social Policies

Chapter 3 Some solutions to improve the micro-savings product of Victnam Bank for Social Policies

mobilization in order to gradually reduce dependence on the Government’s subsidy With the nationwide operation network ranging to rural and remote arcas, micro-savings can be an effective and efficient channel of fimding mobilization from rural community for VBSP, But afler a few launching years, the micru-savings preduct is still nol alfractive lo customers,

‘Therefore, “Some solutions to improve micro-savings product in Vietmam Rank for Social Policies” is the topic chosen for analysis of the product and identify some solutions to improve with a view to help the poor take up savings behaviours and create owned capitals for emergency and investment into business and production Morcover, it also helps VBSP increase more capitals for providing loan programs for the poor, contribute to poverty reduction, bring about

sustainable development, for VRSP in near future

2, Research objectives

+ Resgarch on landscape of Micto-savings: definition of micro-savings, role of micra-savings and

channels to colfcet micro-savings, eriteria thal the dissertation usc to

a tiicro-savines product basing on experiences ftom previous study and some factors affecting micro-savings mobilization of an institution; brief information on micro-savings landscape in the world and

particularly in Victnam

+ Analysis and assessment on the cwrent status of nricro-savings mobilization in Vicinam Bank

for Social Policies

- Propose some solutions for Vietnam Bank for Social Polices to improve its mobilization of

INTRODUCTION

1 Necessity for topic research

Over several past decades there has bean a constant growth in local resident's savings deposit in

aitractful savings products sorving various customers However, almost these savings preduets

are just aimed to respond with demands of better-oif individuals and enterprises mainly living in urban areas ‘here still lacks convenient and flexible savings products serving poor households, low-income houscholds and other vulnerable populations living in rural, romote and mountainous areas where commercial banks ignore or are unwilling to mvest due to high operating costs and

low inobitivalion source Meanwhile, Ihere is an increasingly high needs of saving small amount

of monzy lo be accumulated #s capilal lo tnooL with business and production invastment from poor houscholds, low-income houscholds and other vulnerable population, especially in rural

of poverty reduction, Spending over 15 opcration years, VBSP has now become one of the leading microfinance banks in Vielnam serving around seven million household customers, out of which more than gighly percentage of them living in rural, remote and mountzinous areas, Nevaitheless, fifteen years is not enough to ensue the future of sustainably operational and

financial development for VBSP in the current context of complex economic fluctutations and

arisis al horuc and abroad Meanwhile the more ina

sing operation scale and growing customer dcmands of using financial services, VBSP is facing with limited funding source serving business operation So far, almost funding source for VBSP’s operation mainly stems from the government budget and stale-mandated mobilization for providing financial inchusion for th poor and other vulnerable populations, However, within the cwrent situation of domestic and

LIST OF TABLES AND CHARTS

‘Lable 1: Profile of Formal Micro-savings in Vietnam (amount in millions) soo BB Table 2: Funding of VBSP as of 31th December 2016 - eo

‘Yable 3: Loan outstanding of VBSP as of 31th December 2016 —

'Table 4: Institutional Characteristics, Outreach, Balance Sheet and financial performance and of

= Space: The topic focuses on researching Vietnam Bank for Social Policies in comparative rclationship with some commercial banks and microfinance institutions operating in Vietnam + Time: Within the Vietnam market with data rescarch {rom 2007 - 2016

4, Research questions

The topic will answer some following questions

- Overview on theorelical aspects on micro

- Figure out obstacles and reasons tor obstacles in mobilizing micro-savings in VBSP?

- Some feasible solutions to improve and scale up the microsavings product in VBSP in future?

5, Rescarch methodology and topic approach

‘The thesis is based on statistical analysis to identity research objectives; data collective method, the tables and figures to do the research ‘The thesis collected and sed the secondary data, which arc published by VBSP and olher official institutions in analysis

This unatysis is bascd ơn dosk sindy using sccondary daia and experionces of myself, as a senior officer working for VBSP for twelve years up to now The desk study focused on theories about the savings practices of the poor and existing programs in same countries in the would 1 usc theorics and information fiom publications of reputable organizations in anicro- savings such as CGAP, MIX, GDRC and BWTP Network, including researches, magazines and websites, Talso lake experiences from previous sludy on this maller

Data on VSP operation was referred from internal sources and documents posted in the website

of the bank, Analysis and revormendations of the rescarch is based on my selunt expertences in

working for the bank and of internal reports for the bank from external consultants

6 Topic structure

The Assoviation of Southeast Asian Nations Automated Teller Machine(s)

Board of Directors Bank Rakyat Indonesia Chief Lxecutive Officer(s) Consultative Group to Assist the Poor Savings and Credit Groups

The Global Development Rescarch Center Information technology

Lifl Above Poverly Organization Microfinance Information Exchange, Ine Microfinance institution(s)

Return on Assets Return on Equity Rotating savings and credit associatian(s) State Bank of Vicar

Uniled States Dollar Vietnam Dong

Point of sale

The Assoviation of Southeast Asian Nations Automated Teller Machine(s)

Board of Directors Bank Rakyat Indonesia Chief Lxecutive Officer(s) Consultative Group to Assist the Poor Savings and Credit Groups

The Global Development Rescarch Center Information technology

Lifl Above Poverly Organization Microfinance Information Exchange, Ine Microfinance institution(s)

Return on Assets Return on Equity Rotating savings and credit associatian(s) State Bank of Vicar

Uniled States Dollar Vietnam Dong

Point of sale

= Space: The topic focuses on researching Vietnam Bank for Social Policies in comparative rclationship with some commercial banks and microfinance institutions operating in Vietnam + Time: Within the Vietnam market with data rescarch {rom 2007 - 2016

4, Research questions

The topic will answer some following questions

- Overview on theorelical aspects on micro

- Figure out obstacles and reasons tor obstacles in mobilizing micro-savings in VBSP?

- Some feasible solutions to improve and scale up the microsavings product in VBSP in future?

5, Rescarch methodology and topic approach

‘The thesis is based on statistical analysis to identity research objectives; data collective method, the tables and figures to do the research ‘The thesis collected and sed the secondary data, which arc published by VBSP and olher official institutions in analysis

This unatysis is bascd ơn dosk sindy using sccondary daia and experionces of myself, as a senior officer working for VBSP for twelve years up to now The desk study focused on theories about the savings practices of the poor and existing programs in same countries in the would 1 usc theorics and information fiom publications of reputable organizations in anicro- savings such as CGAP, MIX, GDRC and BWTP Network, including researches, magazines and websites, Talso lake experiences from previous sludy on this maller

Data on VSP operation was referred from internal sources and documents posted in the website

of the bank, Analysis and revormendations of the rescarch is based on my selunt expertences in

working for the bank and of internal reports for the bank from external consultants

6 Topic structure

LIST OF TABLES AND CHARTS

‘Lable 1: Profile of Formal Micro-savings in Vietnam (amount in millions) soo BB Table 2: Funding of VBSP as of 31th December 2016 - eo

‘Yable 3: Loan outstanding of VBSP as of 31th December 2016 —

'Table 4: Institutional Characteristics, Outreach, Balance Sheet and financial performance and of

In addtion to introductions, conclusion annsxes and references, the topic includes 3 chapters as

follows:

Chapter 1: Theoretical aspects of micro-savings

Chapter 2: Current status of micro-savings mobilization in Vietnam Bank for Social Policies

Chapter 3 Some solutions to improve the micro-savings product of Victnam Bank for Social Policies

INTRODUCTION

1 Necessity for topic research

Over several past decades there has bean a constant growth in local resident's savings deposit in

aitractful savings products sorving various customers However, almost these savings preduets

are just aimed to respond with demands of better-oif individuals and enterprises mainly living in urban areas ‘here still lacks convenient and flexible savings products serving poor households, low-income houscholds and other vulnerable populations living in rural, romote and mountainous areas where commercial banks ignore or are unwilling to mvest due to high operating costs and

low inobitivalion source Meanwhile, Ihere is an increasingly high needs of saving small amount

of monzy lo be accumulated #s capilal lo tnooL with business and production invastment from poor houscholds, low-income houscholds and other vulnerable population, especially in rural

of poverty reduction, Spending over 15 opcration years, VBSP has now become one of the leading microfinance banks in Vielnam serving around seven million household customers, out of which more than gighly percentage of them living in rural, remote and mountzinous areas, Nevaitheless, fifteen years is not enough to ensue the future of sustainably operational and

financial development for VBSP in the current context of complex economic fluctutations and

arisis al horuc and abroad Meanwhile the more ina

sing operation scale and growing customer dcmands of using financial services, VBSP is facing with limited funding source serving business operation So far, almost funding source for VBSP’s operation mainly stems from the government budget and stale-mandated mobilization for providing financial inchusion for th poor and other vulnerable populations, However, within the cwrent situation of domestic and

2.2.1.1 The Pilot Savings Program - eo Al 3.2.1.2 Natiomwide roll-ouf of miero-saviles seTViC§ eeoeiesioioe để 2.3 Business figures on micro-savings mobilization of VISP so AT 2.4 Analysis of VBSP’s micro-savings product

SOME SOLUTIONS TO IMPROVE THE MICRO-SAVINGS PRODUCT IN VIETNAM

3.1.2, FBSP% orkenlalian of capital mobilization in future - - 59 3.2 Some solutions to improve micro-savings product in VBBP 60 3.2.1 Improve internal procedureadf tmiero-savings deposit program in V8ỀP BỠ 2.2 Capacity building for V“BSP siafÿ quả staheholier co ceeeeiereriirierie đí

3.2.3 Incentives to group leadars, customers and bantk staff - 62

3.2.6 Revelop other methads and channels of mobilizing savings besides SC 65 3.2.7 Expanding opportunities for non-member of SCG at commune level - _-.85 3.2.8 Modernisation of information technology and digital solution for more flexible low-cost,

CONCLUSIOX

= Space: The topic focuses on researching Vietnam Bank for Social Policies in comparative rclationship with some commercial banks and microfinance institutions operating in Vietnam + Time: Within the Vietnam market with data rescarch {rom 2007 - 2016

4, Research questions

The topic will answer some following questions

- Overview on theorelical aspects on micro

- Figure out obstacles and reasons tor obstacles in mobilizing micro-savings in VBSP?

- Some feasible solutions to improve and scale up the microsavings product in VBSP in future?

5, Rescarch methodology and topic approach

‘The thesis is based on statistical analysis to identity research objectives; data collective method, the tables and figures to do the research ‘The thesis collected and sed the secondary data, which arc published by VBSP and olher official institutions in analysis

This unatysis is bascd ơn dosk sindy using sccondary daia and experionces of myself, as a senior officer working for VBSP for twelve years up to now The desk study focused on theories about the savings practices of the poor and existing programs in same countries in the would 1 usc theorics and information fiom publications of reputable organizations in anicro- savings such as CGAP, MIX, GDRC and BWTP Network, including researches, magazines and websites, Talso lake experiences from previous sludy on this maller

Data on VSP operation was referred from internal sources and documents posted in the website

of the bank, Analysis and revormendations of the rescarch is based on my selunt expertences in

working for the bank and of internal reports for the bank from external consultants

6 Topic structure

= Space: The topic focuses on researching Vietnam Bank for Social Policies in comparative rclationship with some commercial banks and microfinance institutions operating in Vietnam + Time: Within the Vietnam market with data rescarch {rom 2007 - 2016

4, Research questions

The topic will answer some following questions

- Overview on theorelical aspects on micro

- Figure out obstacles and reasons tor obstacles in mobilizing micro-savings in VBSP?

- Some feasible solutions to improve and scale up the microsavings product in VBSP in future?

5, Rescarch methodology and topic approach

‘The thesis is based on statistical analysis to identity research objectives; data collective method, the tables and figures to do the research ‘The thesis collected and sed the secondary data, which arc published by VBSP and olher official institutions in analysis

This unatysis is bascd ơn dosk sindy using sccondary daia and experionces of myself, as a senior officer working for VBSP for twelve years up to now The desk study focused on theories about the savings practices of the poor and existing programs in same countries in the would 1 usc theorics and information fiom publications of reputable organizations in anicro- savings such as CGAP, MIX, GDRC and BWTP Network, including researches, magazines and websites, Talso lake experiences from previous sludy on this maller

Data on VSP operation was referred from internal sources and documents posted in the website

of the bank, Analysis and revormendations of the rescarch is based on my selunt expertences in

working for the bank and of internal reports for the bank from external consultants

6 Topic structure

The Assoviation of Southeast Asian Nations Automated Teller Machine(s)

Board of Directors Bank Rakyat Indonesia Chief Lxecutive Officer(s) Consultative Group to Assist the Poor Savings and Credit Groups

The Global Development Rescarch Center Information technology

Lifl Above Poverly Organization Microfinance Information Exchange, Ine Microfinance institution(s)

Return on Assets Return on Equity Rotating savings and credit associatian(s) State Bank of Vicar

Uniled States Dollar Vietnam Dong

Point of sale

In addtion to introductions, conclusion annsxes and references, the topic includes 3 chapters as

follows:

Chapter 1: Theoretical aspects of micro-savings

Chapter 2: Current status of micro-savings mobilization in Vietnam Bank for Social Policies

Chapter 3 Some solutions to improve the micro-savings product of Victnam Bank for Social Policies

INTRODUCTION

1 Necessity for topic research

Over several past decades there has bean a constant growth in local resident's savings deposit in

aitractful savings products sorving various customers However, almost these savings preduets

are just aimed to respond with demands of better-oif individuals and enterprises mainly living in urban areas ‘here still lacks convenient and flexible savings products serving poor households, low-income houscholds and other vulnerable populations living in rural, romote and mountainous areas where commercial banks ignore or are unwilling to mvest due to high operating costs and

low inobitivalion source Meanwhile, Ihere is an increasingly high needs of saving small amount

of monzy lo be accumulated #s capilal lo tnooL with business and production invastment from poor houscholds, low-income houscholds and other vulnerable population, especially in rural

of poverty reduction, Spending over 15 opcration years, VBSP has now become one of the leading microfinance banks in Vielnam serving around seven million household customers, out of which more than gighly percentage of them living in rural, remote and mountzinous areas, Nevaitheless, fifteen years is not enough to ensue the future of sustainably operational and

financial development for VBSP in the current context of complex economic fluctutations and

arisis al horuc and abroad Meanwhile the more ina

sing operation scale and growing customer dcmands of using financial services, VBSP is facing with limited funding source serving business operation So far, almost funding source for VBSP’s operation mainly stems from the government budget and stale-mandated mobilization for providing financial inchusion for th poor and other vulnerable populations, However, within the cwrent situation of domestic and

INTRODUCTION

1 Necessity for topic research

Over several past decades there has bean a constant growth in local resident's savings deposit in

aitractful savings products sorving various customers However, almost these savings preduets

are just aimed to respond with demands of better-oif individuals and enterprises mainly living in urban areas ‘here still lacks convenient and flexible savings products serving poor households, low-income houscholds and other vulnerable populations living in rural, romote and mountainous areas where commercial banks ignore or are unwilling to mvest due to high operating costs and

low inobitivalion source Meanwhile, Ihere is an increasingly high needs of saving small amount

of monzy lo be accumulated #s capilal lo tnooL with business and production invastment from poor houscholds, low-income houscholds and other vulnerable population, especially in rural

of poverty reduction, Spending over 15 opcration years, VBSP has now become one of the leading microfinance banks in Vielnam serving around seven million household customers, out of which more than gighly percentage of them living in rural, remote and mountzinous areas, Nevaitheless, fifteen years is not enough to ensue the future of sustainably operational and

financial development for VBSP in the current context of complex economic fluctutations and

arisis al horuc and abroad Meanwhile the more ina

sing operation scale and growing customer dcmands of using financial services, VBSP is facing with limited funding source serving business operation So far, almost funding source for VBSP’s operation mainly stems from the government budget and stale-mandated mobilization for providing financial inchusion for th poor and other vulnerable populations, However, within the cwrent situation of domestic and

mobilization in order to gradually reduce dependence on the Government’s subsidy With the nationwide operation network ranging to rural and remote arcas, micro-savings can be an effective and efficient channel of fimding mobilization from rural community for VBSP, But afler a few launching years, the micru-savings preduct is still nol alfractive lo customers,

‘Therefore, “Some solutions to improve micro-savings product in Vietmam Rank for Social Policies” is the topic chosen for analysis of the product and identify some solutions to improve with a view to help the poor take up savings behaviours and create owned capitals for emergency and investment into business and production Morcover, it also helps VBSP increase more capitals for providing loan programs for the poor, contribute to poverty reduction, bring about

sustainable development, for VRSP in near future

2, Research objectives

+ Resgarch on landscape of Micto-savings: definition of micro-savings, role of micra-savings and

channels to colfcet micro-savings, eriteria thal the dissertation usc to

a tiicro-savines product basing on experiences ftom previous study and some factors affecting micro-savings mobilization of an institution; brief information on micro-savings landscape in the world and

particularly in Victnam

+ Analysis and assessment on the cwrent status of nricro-savings mobilization in Vicinam Bank

for Social Policies

- Propose some solutions for Vietnam Bank for Social Polices to improve its mobilization of

The Assoviation of Southeast Asian Nations Automated Teller Machine(s)

Board of Directors Bank Rakyat Indonesia Chief Lxecutive Officer(s) Consultative Group to Assist the Poor Savings and Credit Groups

The Global Development Rescarch Center Information technology

Lifl Above Poverly Organization Microfinance Information Exchange, Ine Microfinance institution(s)

Return on Assets Return on Equity Rotating savings and credit associatian(s) State Bank of Vicar

Uniled States Dollar Vietnam Dong

Point of sale

2.2.1.1 The Pilot Savings Program - eo Al 3.2.1.2 Natiomwide roll-ouf of miero-saviles seTViC§ eeoeiesioioe để 2.3 Business figures on micro-savings mobilization of VISP so AT 2.4 Analysis of VBSP’s micro-savings product

SOME SOLUTIONS TO IMPROVE THE MICRO-SAVINGS PRODUCT IN VIETNAM

3.1.2, FBSP% orkenlalian of capital mobilization in future - - 59 3.2 Some solutions to improve micro-savings product in VBBP 60 3.2.1 Improve internal procedureadf tmiero-savings deposit program in V8ỀP BỠ 2.2 Capacity building for V“BSP siafÿ quả staheholier co ceeeeiereriirierie đí

3.2.3 Incentives to group leadars, customers and bantk staff - 62

3.2.6 Revelop other methads and channels of mobilizing savings besides SC 65 3.2.7 Expanding opportunities for non-member of SCG at commune level - _-.85 3.2.8 Modernisation of information technology and digital solution for more flexible low-cost,

CONCLUSIOX

INTRODUCTION

1 Necessity for topic research

Over several past decades there has bean a constant growth in local resident's savings deposit in

aitractful savings products sorving various customers However, almost these savings preduets

are just aimed to respond with demands of better-oif individuals and enterprises mainly living in urban areas ‘here still lacks convenient and flexible savings products serving poor households, low-income houscholds and other vulnerable populations living in rural, romote and mountainous areas where commercial banks ignore or are unwilling to mvest due to high operating costs and

low inobitivalion source Meanwhile, Ihere is an increasingly high needs of saving small amount

of monzy lo be accumulated #s capilal lo tnooL with business and production invastment from poor houscholds, low-income houscholds and other vulnerable population, especially in rural

of poverty reduction, Spending over 15 opcration years, VBSP has now become one of the leading microfinance banks in Vielnam serving around seven million household customers, out of which more than gighly percentage of them living in rural, remote and mountzinous areas, Nevaitheless, fifteen years is not enough to ensue the future of sustainably operational and

financial development for VBSP in the current context of complex economic fluctutations and

arisis al horuc and abroad Meanwhile the more ina

sing operation scale and growing customer dcmands of using financial services, VBSP is facing with limited funding source serving business operation So far, almost funding source for VBSP’s operation mainly stems from the government budget and stale-mandated mobilization for providing financial inchusion for th poor and other vulnerable populations, However, within the cwrent situation of domestic and

= Space: The topic focuses on researching Vietnam Bank for Social Policies in comparative rclationship with some commercial banks and microfinance institutions operating in Vietnam + Time: Within the Vietnam market with data rescarch {rom 2007 - 2016

4, Research questions

The topic will answer some following questions

- Overview on theorelical aspects on micro

- Figure out obstacles and reasons tor obstacles in mobilizing micro-savings in VBSP?

- Some feasible solutions to improve and scale up the microsavings product in VBSP in future?

5, Rescarch methodology and topic approach

‘The thesis is based on statistical analysis to identity research objectives; data collective method, the tables and figures to do the research ‘The thesis collected and sed the secondary data, which arc published by VBSP and olher official institutions in analysis

This unatysis is bascd ơn dosk sindy using sccondary daia and experionces of myself, as a senior officer working for VBSP for twelve years up to now The desk study focused on theories about the savings practices of the poor and existing programs in same countries in the would 1 usc theorics and information fiom publications of reputable organizations in anicro- savings such as CGAP, MIX, GDRC and BWTP Network, including researches, magazines and websites, Talso lake experiences from previous sludy on this maller

Data on VSP operation was referred from internal sources and documents posted in the website

of the bank, Analysis and revormendations of the rescarch is based on my selunt expertences in

working for the bank and of internal reports for the bank from external consultants

6 Topic structure

2.2.1.1 The Pilot Savings Program - eo Al 3.2.1.2 Natiomwide roll-ouf of miero-saviles seTViC§ eeoeiesioioe để 2.3 Business figures on micro-savings mobilization of VISP so AT 2.4 Analysis of VBSP’s micro-savings product

SOME SOLUTIONS TO IMPROVE THE MICRO-SAVINGS PRODUCT IN VIETNAM

3.1.2, FBSP% orkenlalian of capital mobilization in future - - 59 3.2 Some solutions to improve micro-savings product in VBBP 60 3.2.1 Improve internal procedureadf tmiero-savings deposit program in V8ỀP BỠ 2.2 Capacity building for V“BSP siafÿ quả staheholier co ceeeeiereriirierie đí

3.2.3 Incentives to group leadars, customers and bantk staff - 62

3.2.6 Revelop other methads and channels of mobilizing savings besides SC 65 3.2.7 Expanding opportunities for non-member of SCG at commune level - _-.85 3.2.8 Modernisation of information technology and digital solution for more flexible low-cost,

CONCLUSIOX

LIST OF TABLES AND CHARTS

‘Lable 1: Profile of Formal Micro-savings in Vietnam (amount in millions) soo BB Table 2: Funding of VBSP as of 31th December 2016 - eo

‘Yable 3: Loan outstanding of VBSP as of 31th December 2016 —

'Table 4: Institutional Characteristics, Outreach, Balance Sheet and financial performance and of

= Space: The topic focuses on researching Vietnam Bank for Social Policies in comparative rclationship with some commercial banks and microfinance institutions operating in Vietnam + Time: Within the Vietnam market with data rescarch {rom 2007 - 2016

4, Research questions

The topic will answer some following questions

- Overview on theorelical aspects on micro

- Figure out obstacles and reasons tor obstacles in mobilizing micro-savings in VBSP?

- Some feasible solutions to improve and scale up the microsavings product in VBSP in future?

5, Rescarch methodology and topic approach

‘The thesis is based on statistical analysis to identity research objectives; data collective method, the tables and figures to do the research ‘The thesis collected and sed the secondary data, which arc published by VBSP and olher official institutions in analysis

This unatysis is bascd ơn dosk sindy using sccondary daia and experionces of myself, as a senior officer working for VBSP for twelve years up to now The desk study focused on theories about the savings practices of the poor and existing programs in same countries in the would 1 usc theorics and information fiom publications of reputable organizations in anicro- savings such as CGAP, MIX, GDRC and BWTP Network, including researches, magazines and websites, Talso lake experiences from previous sludy on this maller

Data on VSP operation was referred from internal sources and documents posted in the website

of the bank, Analysis and revormendations of the rescarch is based on my selunt expertences in

working for the bank and of internal reports for the bank from external consultants

6 Topic structure

LIST OF TABLES AND CHARTS

‘Lable 1: Profile of Formal Micro-savings in Vietnam (amount in millions) soo BB Table 2: Funding of VBSP as of 31th December 2016 - eo

‘Yable 3: Loan outstanding of VBSP as of 31th December 2016 —

'Table 4: Institutional Characteristics, Outreach, Balance Sheet and financial performance and of

In addtion to introductions, conclusion annsxes and references, the topic includes 3 chapters as

follows:

Chapter 1: Theoretical aspects of micro-savings

Chapter 2: Current status of micro-savings mobilization in Vietnam Bank for Social Policies

Chapter 3 Some solutions to improve the micro-savings product of Victnam Bank for Social Policies

= Space: The topic focuses on researching Vietnam Bank for Social Policies in comparative rclationship with some commercial banks and microfinance institutions operating in Vietnam + Time: Within the Vietnam market with data rescarch {rom 2007 - 2016

4, Research questions

The topic will answer some following questions

- Overview on theorelical aspects on micro

- Figure out obstacles and reasons tor obstacles in mobilizing micro-savings in VBSP?

- Some feasible solutions to improve and scale up the microsavings product in VBSP in future?

5, Rescarch methodology and topic approach

‘The thesis is based on statistical analysis to identity research objectives; data collective method, the tables and figures to do the research ‘The thesis collected and sed the secondary data, which arc published by VBSP and olher official institutions in analysis

This unatysis is bascd ơn dosk sindy using sccondary daia and experionces of myself, as a senior officer working for VBSP for twelve years up to now The desk study focused on theories about the savings practices of the poor and existing programs in same countries in the would 1 usc theorics and information fiom publications of reputable organizations in anicro- savings such as CGAP, MIX, GDRC and BWTP Network, including researches, magazines and websites, Talso lake experiences from previous sludy on this maller

Data on VSP operation was referred from internal sources and documents posted in the website

of the bank, Analysis and revormendations of the rescarch is based on my selunt expertences in

working for the bank and of internal reports for the bank from external consultants

6 Topic structure

mobilization in order to gradually reduce dependence on the Government’s subsidy With the nationwide operation network ranging to rural and remote arcas, micro-savings can be an effective and efficient channel of fimding mobilization from rural community for VBSP, But afler a few launching years, the micru-savings preduct is still nol alfractive lo customers,

‘Therefore, “Some solutions to improve micro-savings product in Vietmam Rank for Social Policies” is the topic chosen for analysis of the product and identify some solutions to improve with a view to help the poor take up savings behaviours and create owned capitals for emergency and investment into business and production Morcover, it also helps VBSP increase more capitals for providing loan programs for the poor, contribute to poverty reduction, bring about

sustainable development, for VRSP in near future

2, Research objectives

+ Resgarch on landscape of Micto-savings: definition of micro-savings, role of micra-savings and

channels to colfcet micro-savings, eriteria thal the dissertation usc to

a tiicro-savines product basing on experiences ftom previous study and some factors affecting micro-savings mobilization of an institution; brief information on micro-savings landscape in the world and

particularly in Victnam

+ Analysis and assessment on the cwrent status of nricro-savings mobilization in Vicinam Bank

for Social Policies

- Propose some solutions for Vietnam Bank for Social Polices to improve its mobilization of

The Assoviation of Southeast Asian Nations Automated Teller Machine(s)

Board of Directors Bank Rakyat Indonesia Chief Lxecutive Officer(s) Consultative Group to Assist the Poor Savings and Credit Groups

The Global Development Rescarch Center Information technology

Lifl Above Poverly Organization Microfinance Information Exchange, Ine Microfinance institution(s)

Return on Assets Return on Equity Rotating savings and credit associatian(s) State Bank of Vicar

Uniled States Dollar Vietnam Dong

Point of sale

INTRODUCTION

1 Necessity for topic research

Over several past decades there has bean a constant growth in local resident's savings deposit in

aitractful savings products sorving various customers However, almost these savings preduets

are just aimed to respond with demands of better-oif individuals and enterprises mainly living in urban areas ‘here still lacks convenient and flexible savings products serving poor households, low-income houscholds and other vulnerable populations living in rural, romote and mountainous areas where commercial banks ignore or are unwilling to mvest due to high operating costs and

low inobitivalion source Meanwhile, Ihere is an increasingly high needs of saving small amount

of monzy lo be accumulated #s capilal lo tnooL with business and production invastment from poor houscholds, low-income houscholds and other vulnerable population, especially in rural

of poverty reduction, Spending over 15 opcration years, VBSP has now become one of the leading microfinance banks in Vielnam serving around seven million household customers, out of which more than gighly percentage of them living in rural, remote and mountzinous areas, Nevaitheless, fifteen years is not enough to ensue the future of sustainably operational and

financial development for VBSP in the current context of complex economic fluctutations and

arisis al horuc and abroad Meanwhile the more ina

sing operation scale and growing customer dcmands of using financial services, VBSP is facing with limited funding source serving business operation So far, almost funding source for VBSP’s operation mainly stems from the government budget and stale-mandated mobilization for providing financial inchusion for th poor and other vulnerable populations, However, within the cwrent situation of domestic and