Assessing the development of microfinance activities of commercial banks in Vietnam through accessibility and sustainability

Abstract

In the current economic conditions of Vietnam, microfinance (MF) is a vast market segment with huge potential, opportunities to develop in both quality and quantity. Experiences from many countries have shown that not only pure microfinance organizations, but commercial banks also have the ability to promote MF, though with different levels of success. Particularly in Vietnam, the study of MF in the banking sector mostly focuses on 2 state-owned banks which are Agriculture and Rural Development Bank (Agribank) and Social Policy Bank. The success of MF development in credit institutions can be evaluated through two basic criteria: customer accessibility and the sustainability of the organization. However, how can these two criteria relate to each other regarding the development of MF activities in commercial banks? The purpose of this study is to discuss and answer this question in order to select and allocate appropriate resources to invest in the development of MF.