Developing of Microfinance operation at Vietnam financial Institutions

1 THE DEVELOPMENT OF MICROFINANCE OPERATION IN VIETNAM CREDIT INSTITUTIONS Chapter 1: Introduction and overview thesisresearch 1.1 Necessity of the study Microfinance is one of the characteristic forms of finance for developing countries, focused on the goal of poverty reduction and sustainable development Approach to microfinance (MF) differs from conventional finance and gets more attention from donors, policy-makers in many countries around the world In Vietnam, Microfinance has developed in recent years, both in terms of legal framework and basic operations However, the participation of finance institutions providing Microfinance service is low Microfinance operation in Vietnam Credit institutions is assessed as limited in quantity and poor in quality Corollary is that many customers can not access to the benefits of microfinance operations, credit institutions are difficult to improve profit Therefore, the study "The development of Microfinance operation in Vietnam Credit Institutions" is needed 1.2 Oveview of related studies The process of this thesis follows these issues (i) The concept development of microfinance of organizations providing microfinance services, (ii) Criteria for evaluating the development of microfinance operations, (iii) The relationship between the outreach to microfinance and sustainability of the organization provides, (iv) Developing microfinance operations in credit institutions (Cis), (v) Factors affect the development of microfinance operations Through the course of the review study found no overall study on the development of indicators to assess microfinance operations of credit institutions and evaluate the factors affecting the development of the microfinance operations of credit institution (CI) combining qualitative and quantitative methods in the perspective of the organization and the customer interest this is the space for this research 1.3 Research objectives The overall objective of the thesis: Study the development of microfinance in credit activity The overall objectives are detailed into the following specific objectives: (1) Codify the basics of microfinance operations and development operations of microfinance in credit institutions (2) Summary of international experience in developing microfinance operations of credit institutions, and lessons for Vietnam (3) Assessment of the situation developing microfinance operations in Vietnam credit Institutions (4) Inspection the relationship between the stability of credit institutions and the outreach to microfinance in credit institution in Vietnam with case study Lien Viet Post Join Stock Commercial Bank (5) Inspection of the factors affecting the level of customer access to microfinance operations of Vietnam credit Institutions (6) Proposed a number of recommendations for relevant parties to develop microfinance operations in Vietnam credit Institutions 1.4 Research questions The main research question of the thesis: The decisive factors in the development of microfinance operations of Vietnam credit institutions? This question will be addressed by answering the following specific questions: (1) What are concepts and features of microfinance operations in CIs? (2) What is concept development of microfinance operations in CIs? (3) What are the assessment criterias developed microfinance operations in CIs? (4) What are factors affecting the development of microfinance operations in Vietnam Credit Institutions? 1.5 Subject and scope of research 1.5.1 Subject of research Study subjects of the study is the development of microfinance in credit institution 1.5.2 Scope of research Space of study: Research into the development of microfinance operations, primarily lending small amounts, of credit institutions Time of study: Secondary data on the credit institutions and Lien Viet Post Join Stock Commercial Bank and elecommunications were collected during the period 2010-2014 1.6 Method of research In the thesis, the author has used a combination of the two methods of quantitative research and qualitative research, and case studies were typically Lien Viet Post Join Stock Commercial Bank The software used was SPSS 20 and AMOS 20 software 1.7 New contributions of the thesis 1.7.1 New main theory contributions of the thesis Based on the study of theoretical and practical contributions thesis new academic as follows: (1) The development of microfinance (MF) has been studied mostly in term of social objectives However, this thesis aims to study the development of microfinance in credit institutions (CIs) as a mean to obtain profit for CIs This thesis focuses on clarifying the relationship between financial sustainability of CIs and the development of microfinance operations of CIs (2) Based on the indicators to assess the development of microfinance operations in MFIs, the author has selected two groups of indicators to evaluate the development of microfinance in CIs: (1) indicators of financial sustainability include: the profit after tax on average total assets, profit after tax on equity and NPL ratio (2) indicators related to the level of outreach specified by (i) the breadth of outreach (number of customers, size of deposits and loans, number of microfinance products and services) and (ii) the depth of outreach (average loan value) (3) Applying the model of the relationship between the outreach and sustainability of microfinance institutions of Christen et al (1995), Thys (2000), Olivares-Polanco (2005) as well as the theoretical basis to be suitable to the Vietnamese CIs, the thesis analyzed the proposed model exploring the factors affecting the average loan value with the independent factors: Operating time, sustainability, the breadth of outreach and two additional factors are labor productivity and credit risk (Model 1) (4) The thesis adds the factors affecting the development of microfinance in credit activities through the level of customer interest based on consumer behavior theories of Kotler (2001), the trend of choosing credit institutions of Khazeh and Decker (1992), Mokhlis (2009) and proposes model reflecting the dependency relationship between the loan value factors to the level of customer interest to convenience, quality service, brand, price, promotions of CIs and demographic factors (Model 2) 1.7.2 New proposals from the results of the thesis (1) Model showed that the breadth of outreach influence the same way with the depth of outreach and reach different conclusions with findings in models of Olivares - Polanco (2005) Credit risk and labor productivity has affected the same way with depth access Factors affecting the development of microfinance activities at CIs with decreasing levels as follows: (i) The the breadth of outreach, (ii) Operating time, (iii) Credit risk, (iv) labor productivity and (v) sustainability (2) Model showed that the factors affecting the development of the microfinance operations of CIs through the perception of customers with decreasing levels as follows: (i) The convenience of credit institutions, (ii) brand of credit institutions, (iii) quality of service, (iv) price, but promotion has no effect Additionally, demographic factors such as salary, total income, place of living and education of customer has affected the development of the microfinance credit activities 5 (3) The thesis put forward two group of recommendations to develop the microfinance operations in CIs include: First, for CIs providing microfinance services: (1) Strengthening governance and administration, (2) Design and implement products and services in view of "Customer in the Center "(3) Enhance financial strength (4) strengthen accountability in providing microfinance services; (5) Improve the quality of human resources Second, for State Bank of Vietnam and concerned agencies: (1) Improve the system guidelines for implementation of the Law on Credit Institutions which have microfinance operations, (2) Expeditiously implement activities within the framework of development strategy for the microfinance sector of Vietnam, (3) create "open conditions" to CIs involved in microfinance, (4) Strengthening the inspection and supervision of microfinance operations of credit institutions 1.8 Structure of the thesis Chapter 1: Introduction and overview thesis research Chapter 2: The rationale for the development of microfinance operation atVietnam credit Institutions Chapter 3: The situation developing microfinance operational of Vietnam credit Institutions Chapter 4: The model and results of research the development of microfinance operation at Vietnam credit Institutions: Case study –Lien Viet Post Join Stock Commercial Bank Chapter 5: Discuss findings and recommendations provision of financial services such as credit, mobilizationpayments, Chapter 2: THE LITERATURE REVIEW OF THE DEVELOPMENT OF MICROFINANCE OPERATION N VIETNAM CREDIT INSTITUTIONS insurance and other services for those with low incomes in society to serve the needs production, business and investment in order to improve the quality of customer’s life About microfinance customers, the thesis uses the concept of microfinance clients are directed to credit institutions that includes individual customers, small enterprise customers (i) use of financial services on a small scale, (ii) , primarily low or medium income customers and (iii) that the demand for loans to focus on the purpose of manufacturing and trading in order to improve the living conditions 2.1.1.2 The views of providing microfinance services Three key theoretical points in providing microfinance are: (i) Traditional with preferential interest rates for credit and concentration; (ii) Ohio with high interest rates, the direct intervention of the State; (iii) New institutions The credit institutions are now focusing apply new institutional perspective to reconcile the existing problems of the previous two views 2.1.2 Microfinance operation of credit Institutions 2.1.2.1 Features of the microfinance operations of credit institutions Unlike microfinance institutions often provide microfinance synthetic approach, credit institutions mostly minimal approach is to perform financial intermediation activities In particular, customers, products and services, procedures, requirements of security asset and method of approach differ from MFIs 2.1.2.2 Microfinance operation of credit institutions Microfinance operations to credit institutions in accordance with generally minimal approach and implementing financial intermediary role 2.1 Microfinance operation of Credit Institutions include the following operations: (i) credit activity, (ii) capital mobilization 2.1.1 Overview of microfinance operation activities, (iii) payment operations, (iv) micro-insurance activity and other 2.1.1.1 The concept of microfinance operation services About microfinance, using concepts thesis: Microfinance is the 2.1.3 Credit institutions providing microfinance services 2.1.3.1 Definition and classification of credit institutions The types of credit institutions provide formal SCM area include: (i) Development Bank, (ii) Savings bank and Postal saving bank, (iii) Commercial banks, ( iv) The credit institutions non-bank 2.1.3.2 Fundamental principles for credit institutions to develop microfinance operations Ledgerwood (1999) provides 12 fundamental principles that credit institutions must follow if they choose to focus activities on microfinance client groups, including some specific principles of microfinance as universal figure out what services customers really necessary, establish appropriate forms of distribution, cover the cost of the loan interest rate reasonably positive 2.2 Developing microfinance operations of credit institutions 2.2.1 Concept of development of microfinance operations In the thesis the development point of credit institutions operations focused on the perspective of credit institutions are: increase access to microfinance clients and ensure the financial sustainability of the credit institutions 2.2.2 The indicator assessing the development of microfinance operation With the objective of the thesis, indicators on outreach and sustainability are used to measure the development of microfinance operation of credit institutions 2.2.3.1 Outreach Indicator of outreach is measured through two angles: the breadth and depth of the outreach Depth of outreach refers to the average lending rates of microfinance clients are served, while the breadth of outreach refers to the number of clients target of credit institution (i) Breadth of outreach Breadth of outreach of credit institution is the level of access to customers across the board, to be assessed through the diversification of supply of products and services; the level of customer growth, the outstanding loans and deposit balances (ii) Depth of outreach With depth indicators reach an average loan value mean the total average loan balance divided by the number of borrowers (Woller and Schreiner, 2000) This thesis in due consideration of a country, can simply average loan size The lower this value indicates is a level deeper of outreach of credit institution 2.2.3.2 Sustainability For credit institutions, there are two indicators of financial sustainability that we can observe in assessing the effectiveness of the credit institution's return on total assets (ROA) reflect the ability organizations to develop productive assets and for organizations sponsoring the return on equity (ROE), which measure the return of investment of the owner 2.2.3.3 The relationship between the outreach and sustainability of the credit institutions The issues of Outreach and sustainability issues and has close relation Sustainability is the basis for expanding access to credit, and to expand access, then credit institutios can then be capable to ensure financial sustainability 2.2.3.4 The ratio of overdue debt / total loans and bad debt / total loans 2.3 Factors affecting the development of the microfinance operations of credit institutions The sustainabilityand the outreach of microfinance operationsofcreditinstitutions depends on many factors, which are divided into two groups: internal factors and external factors 2.3.1 Factors belong to credit institutions (i) Development strategy and business plan implementation strategies, (ii) Owned properties and operational model, (iii) the potential finance of credit institutions, (iv) Products and Services navigate to microfinance clients, (v) Network of credit institutions, (vi) Human resources of credit 10 institutions, (vii) Risk management capacity (viii) The infrastructure of information technology 2.3.2 Factors belong to environment (i) The regulatory environment, (ii) Economic and society environment 2.4 International experiences and lessons for Vietnam to develope microfinance operations in credit Institutions From the successful experience in the development of microfinance operations of credit institutions in the world, three lessons for Vietnam credit institutions as follows: (i) Improving the regulatory environment for microfinance operations of credit institutions, (ii) Select appropriate operational model for Vietnam credit Institutions, (iii) Design various products and services, consistent target customer needs Development Strategy in 2011-2020 (Decision No 2195 / QD-TTg of the Prime Minister dated 26/12/2011) 3.1.3 Development status of microfinance operations of Vietnam credit Institutions Currently the major Vietnam credit institutions with microfinance operations include Vietnam Bank for social policies, Co-operative Bank of Vietnam and system Central People's Credit Funds, MFIs and commercial banks typically Agribank - Vietnam Bank for Social Policies (VBSP) has the largest market share, with the best outreach in the main credit provider - Co-opbank and PCFs system and impressive growth in the period 20122014, with outstanding loans increased from $ billion to $ 1.78 billion - MFIs have very good depth of outreach but not reach good breadth and not achieve sustainability with three new organizations formalized (TYM, M7 and MFI Thanh Hoa) - Agribank has a total size of the largest operations in agriculture and rural areas.However the number of borrowers and saving customers, microfinance loans behind the VSPB, Co-opbank and PCFs systems, the development of microfinance operations in Agribank is assessed through outreach and sustainable criterias:  Outreach  Breadth of outreach Advantage: The highest professionalization level compared with other units on the microfinance market with (i) product diversification, the development potential of modern banking services compared to other banks; (Iii) attract many different types of customers Disadvantage: Is not "friendly" to customers with poor and low-income loans are usually large-scale, complex procedures and high demands on security assets  Depth of outreach Agribank selection focuses on the upper market segment, customers are worth relatively big loans and they often have above-average incomes than the living Chapter 3: THE SITUATION OF DEVELOPING MICROFINANCE OPERATION OF VIETNAM CREDIT INSTITUTIONS 3.1 Overview of the microfinance operations of Vietnam Credit Institutions 3.1.1 Economic environment Vietnam is a very potential market for microfinance services, has about 60 million people (more than 70% of the population) reside in rural areas and 24.4 million people (about 67% of the workforce at a young age and mature) (GSO, 2014 (cited in OECD, 2015)) The 02 decades GDP per capita actual up to three times Along with the economic development of the country, rural areas are being converted quickly Demand for capital and financial services for the development of agriculture and the rural economy in general and families in particular are huge Although Vietnam has a system of microfinance service providers is quite powerful but still not enough to meet the needs of microfinance, especially only a few banks offer microfinance services 3.1.2 Regulatory environment It is the first time in history, Microfinance was regarded as a kind of formal credit institutions, the central bank is managed according to Law No 47/2010 dated 16.06.2010, which is oriented Microfinance Sector 11 12 Sustainability With the advantage of sustainability banks should operate better Agribank main credit institutions providing services microfinance but financial sustainability and institutional sustainability was ensured The ratio of bad debt and bad debt balance at a high level compared with other credit institutions 3.2 Developing microfinance operation of Lien Viet Post Join Stock Commercial Bank 3.2.1 Overview of Lien Viet Post Join Stock Commercial Bank 3.2.1.1 Introduction of Lien Viet Post Join Stock Commercial Bank 3.2.1.2 The suitability of building microfinance operation in Lien Viet Post Join Stock Commercial Lien Viet Post Join Stock Commercial Bank has the opportunity to develop microfinance operations in Vietnam as this is a potential market on the basis LienVietPostBank are eligible for deployment of microfinance its advantages through operational network nationwide covering all areas even remote regions 3.2.1.3 The main business results of Lien Viet Post Join Stock Commercial Bank After years of operation, the total pre-tax profit of nearly 5,000 billionLienVietPostBank, averaging more than 700 billion / year, a dividend payout ratio of cash to be maintained and guaranteed annual average at 10 - 15 years 3.2.1.4 Social activity of Lien Viet Post Join Stock Commercial Bank Through these operations have practical significance; LienVietPostBank unit is one of the leading social charity activities in Vietnam 3.2.2 Development status of microfinance operation of Lien Viet Post Join Stock Commercial Bank 3.2.2.1 Microfinance operation  The detailed orientation and adequate building of Lending activity (1) Eligible customers are customers of Microfinance, (2) Business risk management is focused, (3) Various distribution channels, (4) Specific lending process included: Process standard lending products and lending procedures quickly, (5) Design and deploy the product  Mobilization activity LienVietPostBank focusing on customer deposits to obtain low-cost financing through not only stable branch network, but also a series of postal system  Payment Activity Lienviet PotsBank offers a full range of services from international/domestic payment  Internet banking activity LienVietPostBankis providing modern banking services such as SMS Banking, Mobile Banking and Internet Banking, specialy new product has name ViViet that will help LienVietPostBank to develop microfinance operations  Micro-Insurance activity Microfinance services are extended is combined insurance services - banking 3.2.2.2 Assessing the outreach of microfinance Mobilization and loans are extended and strong growth after the merger, the level of access is increasing in both width and depth a Breadth of outreach  Growth of customer quantity, outstanding loans and savings balances For micro mobilization most indices when compared three times in 2014 with the period before the merger (in 2010) For lending activity, the highlights were deployed lending activity on postal channels, which before the merger unmatched since 2014 and provides additional micro loan product, the number of borrowers and loans reached significant results  Diversity of provided services b Depth of outreach In 2014, LienVietPostBank has furthered the micro-credit operations with loans less than 50 million and growing deeper approach But profit of LienVietPostBank still mainly from lending activity, followed by the  13 14 mobilization of capital, other activities still account for only a low proportion of total income 3.2.2.3 Assessing the sustainability of microfinance a Institutional sustainability (ISS) Achieving institutional sustainability under four basic criteria standards recommended by the organization Planetfinance (cited in Nguyen Kim Anh and Le Thanh Tam et al, 2013): b Financial sustainability (ROA, ROE) ROE and ROA reached respectively 7.72% and 0.78% in 2013 to reach 6.36% and 0.53% in 2014 On average ROA and ROE of LienVietPostBank have a much higher rate than the average of the industry b NPL ratio At 31/12/2014, the NPL ratio of LienVietPostBank is 1.23% with reduction 1.25% compared with 2013 Compared with other commercial banks, and compared with the standard rate of Moody's and safety frames CAMEL 2%, LienVietPostBank has low NPL ratio 3.3 Assessing the situation of microfinance operation development in the Vietnam credit institutions 3.3.1 The achieved results (i) Credit institutions perform microfinance operations achieved good breadth of outreach (ii) Credit institutions implementing microfinance operations increasingly deeper approach (iii) The sustainability of these credit institutions to implement microfinance operations is gradually being improved 3.3.2 Limit and causes 3.3.2.1 Limit a Outreach levels (i) The number of products and services has not varied, plentiful and there are only very few credit institutions design products microfinance (ii) Number of customers and scale of microfinance services remains low b Financial sustainability of the banks is not guaranteed The financial performance of all credit institutions are very low, with the average ROA are below the international practice is 1% 3.2.2 Causes In addition to the subjective reasons such as: (i) Development Strategy have not yet been specifically and properly invested, (ii) Operational model is not complete, (iii) The financial capacity is limited, (iv ) Not focus / interest in the development of products and services for microfinance clients, (v) The majority of credit institutions is limited to network operations (vi) Lack of human resources quantity and low in quality, (vii) Awareness of risk management activities is limited / incomplete, (viii) The infrastructure of information technology has not met and no financial database micro credit organizations; The objective causes need to be identified: incomplete legal framework and economic environment and the society does not yet support also plays an important role in the cause of limited development of microfinance operations in Vietnam credit institutions These causes are the basis for combination with research results Chapter to make recommendations for the development of microfinance operations in the credit institutions in chapter Chapter 4: THE MODEL AND OF RESEARCH RESULTS OF THE THESIS: « DEVELOPMENT OF MICROFINANCE OPERATION AT VIETNAM CREDIT INSTITUTIONS » CASE STUDY –LIEN VIET POST JOIN STOCK COMMERCIAL BANK 4.1 Researching model and hypotheses 4.1.1 Research model Base on the model by Christen (1995) and Thys (2000) and Olivares-Polanco (2005), this thesis has some adjusted to make it suitable to Vietnam credit institutions: Model analysis of the factors influencing directly to the average value of loans in Credit institutions Model analysisof the factors influencing the value of loans in Credit 15 16 institutions through the level of interest of microfinance clients 4.1.2 The research hypothesis 4.1.2.1 Group hypothesis of Model Table 4.1: The hypothesis of the model Items Content theories Cited establishments H1 Uptime of the organization (Age) Kristen et al (1995), Olivareshas a postive impact on the value of Polanco (2005), Cull et al average loans (ALB) (2007) H2 The sustainability of the Ledgerwood (1999), Christen organization (SUS) has a postive et al (1995), Olivares-Polanco impact the value of average loans (2005), Cull et al (2007) (ALB) H3 Wide approach (NOB) has a Schreiner (2001) negative impact on the value of average loans (ALB) H4 Labour productivity (LP) has a SEEP Network and Calf negative impact on the average loan Meadow (1995), TAP (1997), value (ALB) Yaron, Benjamin, and Piprek (1997), Waterfield and Rasming (1998) H5 Credit risk (Risk) has a negative SEEP Network and impact on the average loan value Calmeadow (1995) (ALB) H6 There are differences between the Von Poschle (1991) credit institutions have different areas of the average value of credit loans 4.1.2.2 Group hypothesis of Model Table 4.2: The hypothesis of the model Items Content theories Cited establishments The level of customer interest for Ledgerwood (1999), prices affect the value of customer (2004); Khazeh & loans (1992); Yavas et al Mokhlis (2009) H10 The level of customer interest for Kotler (2000); Keller brands affect the value of Mokhlis (2009) customer’s loans H11 The level of customer interest for Kotler (2004) the promotional affect the value of customer’s loans H9 Kotler Decker (2009), (2001); Table 4.3: The hypothesis of the demographic factors of the model Cited Items Content theories establishments H12 Place of life has affect the value of the loans at creditinstitution of customer H13 Salary of customer has affect the value of the loans at creditinstitutionof customer Von Porsche H14 The total income of customer has affect the value of (1991) (cited in Ledgerwood, the loans at credit institutionof customer H15 Educational attainment of customer has affect the 1999) value of the loans at credit institution of customer H16 Customer's gender has affect the value of the loan at credit institutions of customer 4.2 Analyzing the factors that influence the development of microfinance operations in LienVietPostBank 4.2.1 The researching sample and data To evaluate the activity development of Microfinance in case studies Items Content theories Cited establishments H7 The level of customer interest for the convenience affect the value of customer loans The level of customer interest in the quality of services affects the value of customer loans Kotler (2004); Khazeh& Decker (1992); Yavas et al (2009), Mokhlis (2009) Khazeh & Decker (1992); Yavas et al (2009), Mokhlis (2009) H8 of LienVietPostBank with form the branches of the bank 4.2.1.1 The researching sample and data of model The data obtained in the fiscal year period: In 2013 and 2014 The number of observations is 129 observers included 57 observers in 2013 and 72 observations in 2014 The data set includes data business performance represents sustainability can be measured and appropriate depth of outreach to research 4.2.1.2 The researching sample and data of model 17 The sample of this study is 1.000 clients of the transaction on the network of LienVietPostBank A number of people interviewed intend to lend and borrow are 269 people (158 people who have loans and 111 people who have loans intended) 4.2.2 Assess the suitability of the model and analyze the relationship between the observed variables in the model 4.2.2.1 Assess the suitability of model The index assessing the models showed good assessment model very well and fully consistent with the observed data, reflect the change and the way the impact of the observed variables 4.2.2.2 Analyse the relationship between the observed variables in Model Results weighted regression tables are not standardized, with the Sig pvalue value [...]... and microfinance credit institutions not to target microfinance operations profit and social responsibility CONCLUDE The thesis’s has overview of and systematization of the rationale for the development of microfinance operations in credit institutions There by focusing in-depth analysis of the organizational perspective to see the primary role of microfinance operations to target the profits of the... implement the recommendation: The State bank of Vietnam Mode of implementation of the recommendations: Encourage the participation of many organizations in the microfinance sector, especially commercial banks have potential microfinance market participants 5.3.2.4 Strengthen inspection and supervision of microfinance operations of Vietnam Credit Institutions Reasons of recommendations:In order to increase... indicators to assess the development of microfinance operations in MFIs assessment criteria developed microfinance operations in Vietnam fiancial institution The thesis draws that credit institutions offer microfinance services can balance the level of access and participation for sustainable microfinance market - one of the largest markets in the world is still open, if participation, credit institutions. .. 22 perception of the Board / Council members, the Executive Board and the entire staff of that credit Unit to implement the recommendation: The VietnamCredit institutions to develop microfinance operations Modes of implementing key recommendations: (i) Development of strategy and clear operational plan; (ii) Identify the specific model of microfinance operations, (iii) Develop mechanisms of control,... operations micro-credit institutions If previously the microfinance concept only affects the microfinance clients in the next research orientation, when the participating credit institutions deeper into the microfinance market, the author hopes to study (1) the impact of results microfinance operations to target the profits of credit institutions and (2) the difference between credit institutions and microfinance. .. quality of human resources Reasons of recommendations: In order to increase accessibility and sustainability Unit to implement the recommendation: The credit institutions want to develop microfinance operations Mode of implementation of the recommendations: As one of the key solutions to developing long-term and sustainable operation of Vietnamese credit institutions Nam.Vi Thus, the development of human... biggest difference of microfinance credit institutions and service providers to other credit institutions 5.3.1.3 Enhance financial strength Reasons of recommendations: In order to increase the level of access Unit to implement the recommendation: The Credit institutions want to develop microfinance operations Mode of implementation of the recommendations: The credit institutions can increase financial resources... the recommendation: The Credit institutions want to develop microfinance operations Mode of implementation of the recommendations: Make sure all the terms of loans and deposits, customers are known and are clearly explained Should carry out regular independent audit of the financial statements in order to increase the transparency of the organization, from which the reputation of credit institutions. .. implement the recommendation: The State bank of Vietnam Mode of implementation of the recommendations: Besides the issuance of guidance documents under the Law, the State Bank management should urgently deploy industry operations sector development strategy was approved by the Prime Minister 5.3.2.3 Facilitate "open" for credit institutions engaged in microfinance Reasons of recommendations: In order to... effective operating organization to ensure safe operation and healthy Priority recommendation: Identify specific operational model of microfinance in Vietnam credit institutions 5.3.1.2 Design and deployment of products and services in view of "Customer is center" Reasons to implement the recommendation: In order to increase the level of access Unit to implement the recommendation: The Credit institutions