Dr. Pham Minh Tu speaking at the seminar.
These are also the issues that Dr. Pham Minh Tu, Deputy Director of the Institute of Banking Strategy, State Bank of Vietnam, raised in the seminar on “Microfinance: A Chance for the Poor and Super Small Enterprises to Rise” held by the Business and Development Online Newspaper in collaboration with the Center for Development of Vietnamese Rural Enterprises.
According to Dr. Tu, since 2020, the Prime Minister has issued a decision approving the National Comprehensive Financial Strategy for the period of 2021-2025, with a vision to 2030. Accordingly, the State plays a role in creating a favorable environment to promote comprehensive finance in the direction of the market, in line with the guidelines and policies of the Party and State.
Promoting comprehensive finance goes hand in hand with the safety, efficiency, and sustainability of the financial system, protecting financial consumers. In this regard, the application of modern technology and innovation is an important factor in promoting comprehensive finance. Along with this, safety and security are emphasized, and risks related to the process of providing financial products and services, especially digital financial products, are fully managed and monitored.
“In the context of the strong tendency of the financial sector to transform through digital technology for easier people’s access, the transformation process brings about certain opportunities for our country. If we can seize these opportunities, Vietnam can accelerate towards the goal of poverty eradication and sustainable development – a cross-cutting and foremost important goal of our Party and State,” emphasized Dr. Tu.
However, according to Dr. Tu, there are still challenges in promoting comprehensive finance in Vietnam. First, organizations, programs, and projects still have many limitations such as weak capital and assets, thin network, lack of diversity in developing and providing products and services; limitations in technology application, and a lack of personnel with sufficient professional expertise… Challenges also come from the inadequacies of mechanisms and policies at the present time.
In addition, a part of the customers is still not equipped with smartphones due to various reasons such as age, economic circumstances, and technological skills. This also poses a challenge to the process of promoting finance.
Also, at the seminar, Prof. Dr. Le Van Luyen, former Vice Director of the Banking Academy, shared his thoughts on the role of microfinance institutions in poverty reduction and contributing to sustainable economic development.
According to Prof. Luyen, microfinance institutions now help the poor not only with money but also by supporting them in developing their economy through skills training, creating relationships with enterprises, bringing their products to the market, and even exporting. Besides providing capital, these organizations also educate and support people in exploiting the potential of their locality, creating jobs, preserving the environment, and reducing spontaneous migration. Microfinance programs also help connect products from localities to a wider market, contributing to the sustainable development of the country.
Also, according to him, to maximize the effectiveness of microfinance institutions, a complete and reliable legal framework is necessary. The attention of the Party, Government, and ministries and branches needs to be further promoted, especially the close direction of the State Bank. When the legal regulations are supplemented and improved, microfinance institutions will have favorable conditions to access domestic and foreign funding sources, helping people overcome difficulties and develop a sustainable economy.
At the end of his presentation, Prof. Luyen emphasized: “To reduce poverty and develop a sustainable economy, in addition to capital, people need to be equipped with knowledge and economic skills, know how to use financial leverage, intelligence, and time to exploit the potential of their locality.”
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