performance of microfinance institutions in vietnam

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY HO CHI MINH CITY NGUYEN NGOC TAN PERFORMANCE OF MICROFINANCE INSTITUTIONS IN VIETNAM SUMMARY OF PHD THESIS HO CHI MINH CITY - 2020 MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY HO CHI MINH CITY NGUYEN NGOC TAN PERFORMANCE OF MICROFINANCE INSTITUTIONS IN VIETNAM SUMMARY OF PHD THESIS Major: Finance - Banking Code: 9.34.02.01 Scientific instructor: Assoc Prof., Dr Nguyen Van Phuc Assoc Prof., Dr Ngo Huong HO CHI MINH CITY - 2020 CHAPTER 1: INTRODUCTION 1.1 The urgency of the thesis Poverty is still a reality in most developing countries Poorly diversified economies, inequality of assets and income distribution, poor management are the root cause of poverty (Andy, 2004, cited from Abdulai and Tewari, 2017) Access to finance can expand opportunities for everyone, and stability in the financial system can promote effective savings and investment, which is important for a growing market economy (World Bank, 2015, cited from Abdulai and Tewari, 2017) Access to finance is important for the poor because it makes it easier for them to use financial services to improve their lives This means that financial services, even in small amounts and in many different forms, can create positive changes in the economic conditions of the poor However, financing for the poor remains a major global concern due to failures in the formal credit market (Hulme and Mosley, 1996), high risks in debt repayment, and lack of assets Mortgages have continued to be a barrier for poor people to access financial services (Hermes and Lensink, 2007) Therefore, microfinance has played a very important role in socio-economic development, especially in poverty reduction in developing countries Studies by Legerwood (1998), Morduch and Haley (2002), Nguyen Kim Anh et al (2011) have shown the role of microfinance in poverty reduction The importance of microfinance for socio-economic development has also been confirmed in practice by the United Nations' choice of 2005 as the International Year of Microfinance In Vietnam, about 72% of the population lives in rural areas, where agriculture is a key economic sector, with the participation of 54% of the labor force nationwide One of the major obstacles to achieving poverty reduction goals in Vietnam is the lack of appropriate and responsive financial services (Nguyen Kim Anh et al., 2011) The strong growth of microfinance in Vietnam over the past three decades in terms of access and supply services, especially credit and savings services, has confirmed the importance To support low-income and poor people to access financial and banking services More specifically, the strong development of microfinance in Vietnam has enabled the poor to obtain loans to develop production and business, contributing significantly to poverty reduction (Nguyen Kim Anh and Le Thanh Tam, 2013) The State and the Government have made very positive moves towards the development of microfinance in Vietnam The 2010 Law on Credit Institutions Law was passed by the National Assembly as a historic milestone when considering the microfinance institution (MFI) as a credit institution (CI), with its laws and regulations Over three decades of establishment and development, microfinance in Vietnam has made successful contributions to socio-economic development and improved living standards for people in rural areas However, Quach Manh Hao (2005) argues that in addition to the great success of reaching out to the poor, Vietnamese MFIs are still not really effective and sustainable Nguyen Kim Anh and Le Thanh Tam (2013) also show that the majority of MFIs in Vietnam have achieved their self-sustainability performance indicators, but the results are not high and uneven Agreeing with the above view, Schäfer & Fukasawa (2011) points out that the increase in the number of borrowers has a positive effect on the sustainability of the MFI's operations, while the ratio of debt write-offs to total outstanding loans have a negative effect Dissanayake (2014) argued that operating costs have a negative impact on the profitability of MFIs, while the cost per borrower has a positive effect on profitability Thus, it can be seen that the effective and sustainable development of MFIs is one of the hot topics of interest to researchers and managers alike In particular, determining the factors that make MFIs in Vietnam operate inefficiently and sustainably is an urgent issue In fact, there have been many domestic and foreign studies considering factors affecting the performance of MFIs (Abdulai & Tewari, 2017; Lopatta et al., 2017; Ngo, 2015; Dao Lan Phuong and Le Thanh Tam, 2017; Schäfer and Fukasawa, 2011; Dissanayake, 2014) However, in these studies, the performance of MFIs is only considered in terms of profitability through return on assets (ROA) and return on equity ( ROE) (Dissanayake, 2014; Abdulai and Tewari, 2017) or operational selfsustainability aspects (Schäfer and Fukasawa, 2011; Dissanayake, 2014; Ngo, 2015; Dao Lan Phuong and Le Thanh Tam, 2017; Abdulai and Tewari, 2017) Meanwhile, the performance of an organization is also expressed through the ability to use the input resources to create outputs (Berger and Mester, 1997) In addition, according to the United Nations Development Program (UNDP) report released at the launch of Viet Nam's Statistical Updates Update 2010 on human development indices and statistics Global multidimensional poverty shows that Vietnam's multidimensional poverty index in 2010 was 0.0197 and ranked 31 out of 105 countries (UNDP, 2010) Vietnam's multidimensional poverty rate is 5%, higher than most countries in East Asia and the Pacific, after Thailand and China Although Viet Nam has made progress in multidimensional poverty reduction at the national level, there are still large disparities between regions and population groups by gender In particular, the poor are often those who suffer from instabilities caused by disasters, natural disasters, and humans themselves, in which women and children are always subject to heavier and more disadvantaged impacts Women also often struggle to access credit in the market due to income and collateral restrictions The lack of access to basic financial services tends to deprive them of the means to improve income, ensure survival and deal with emergencies Poor women need financial services along with the provision of basic social services to play an active role in the economy through income, power agreements, and empowerment in our communities Most MFIs consider making loans to women a top priority Microfinance empowers women by providing loans, providing opportunities for independent income generation and financial contribution to families and communities (Cheston and Kuhn, 2002; Sujatha, 2015) In Vietnam, MFIs provide priority financial services to low-income women, especially poor women MFI's products are originally designed based on a method that is tailored to poor and low-income women, such as: no collateral required, gradually repayment by week and month; Simple loan, pay, and maintain credit discipline procedures Most of MFI's female clients borrow money for economic development for business activities such as agriculture, livestock, fisheries, forestry, and small businesses Partly to meet the needs of consumers, repairing houses with short-term, medium-term loan products suitable to the diverse needs of customers The impact of women's empowerment on the performance of MFIs is most evident through their impact on income and credit risk Since then, women's empowerment will indirectly affect the profitability and performance of MFIs (D’Espallier et al., 2013; Abdulai & Tewari, 2017; Lopatta et al., 2017) However, whether lending to female customers is really effective and sustainable for MFIs is an issue that needs attention Most of the relevant studies have only theoretically clarified the impact of women's empowerment on the performance of MFIs A few empirical studies consider women's empowerment as a variable in the model of factors that impact the profitability of MFIs but have not considered a comprehensive study of the impact of variables This comes in various aspects of performance Based on the above reasons, in this study, the author analyzes the performance of MFIs and identifies the factors affecting the performance of MFIs To overcome the limitations of previous studies, in addition to assessing performance through aspects of profitability and operational sustainability, the author used Data envelopment analysis (DEA) to evaluate the effectiveness of the use of input resources to generate outputs of MFIs In addition, the research also fills the gap on the impact of women's empowerment on the performance of MFIs 1.2 Objectives of the study The overall goal of the study is to assess the performance of MFIs in Vietnam Based on that, propose some suitable policy implications To achieve the overall goal, the study has the following specific objectives: - Assess the status of the operational efficiency of MFIs in Vietnam - Identify factors affecting the performance of MFIs in Vietnam - Assess the impact of women's empowerment on the performance of MFIs in Vietnam - Proposing policy implications to improve the performance of Vietnamese MFIs 1.3 Research questions To achieve the above research objectives, the thesis answers the following questions: - What is the actual performance status of MFIs in Vietnam? - What factors affect the performance of MFIs in Vietnam? - What is the impact of women's empowerment on the performance of MFIs in Vietnam? - What are the policy implications to improve the performance of Vietnamese MFIs? 1.4 Research participants and the scope of the study Research participants: The research object of the thesis is the performance of MFIs, women's empowerment, and the impact of women's empowerment on the performance of MFIs in Vietnam Research scope: According to statistics of the State Bank of Vietnam as of June 30, 2019, there are official MFIs, which are M7 Microfinance Institution Limited, Tinh Thuong Microfinance Institution Limited, and Thanh Hoa microfinance institution, Capital Aid Fund For Employment of The Poor In addition to the official MFIs, there are 30 semi-formal MFIs in microfinance programs and projects operating in Vietnam (Microfinance Directory, 2018) However, the information of these MFIs is not complete, so the author conducted the study with the 26 most complete MFIs Duration of the study: Research data is the annual financial statements of 26 MFIs in Vietnam for the period 2013-2017 provided by MIX Market MIX Market is a website operated by Microfinance Information Exchange (MIX) The MIX Market website allows microfinance programs to post information, including audited financial statements and performance indicators, to receive ratings based on the transparency of the information Regarding the study time, the author conducted at 26 MFI in the period of 2013 - 2017 This stage was selected by the author to carry out the study because to ensure that 26 MFIs have enough data to calculate the variables in the research model 1.5 Research Methods In order to achieve the set research objectives, the thesis uses appropriate estimation methods Specifically: To assess the current performance status of MFIs in Vietnam, the study uses Data Envelopment Analysis (DEA) with 26 Vietnamese microfinance institutions This method is increasingly used to measure business performance (Grigorian, 2002) The DEA method was initiated by Farrel (1957) and later developed by Charnes, Cooper and Rhodes (1978); Banker, Charnes and Cooper (1984), as well as many other scientists, measure the performance of a business or decision-making unit (DMU) To identify the factors that influence and impact the empowerment of women on the performance of MFIs in Vietnam, the thesis uses regression methods for panel data There are many traditional panel data regression methods, of which FEM, REM are the most commonly used regression methods However, when the model has research variables with latency, endogenous phenomena will occur, and FEM, REM regression methods often lead to autocorrelation, variance of variation in the model Therefore, Arellano and Bond (1991) proposed using the GMM regression method to overcome the above phenomena Besides, Blundell and Bond (1998) suggest that when the dependent variable has a high correlation between current values and previous period values, and the number of periods is not too long, the DGMM estimation method is ineffective because the tool variables used to be rated are not strong enough Blundell and Bond (1998) extended the DGMM estimation method with the simultaneous consideration of two estimation methods (basic model, GMM, and DGMM model) collectively known as System Generalized method of moments (SGMM) In this study, because the period of 2013-2017 is not too long and the financial data of MFIs often have a high correlation between the present value and the value in the previous period, the author uses the method estimating SGMM 1.6 New contributions of the thesis The thesis focuses on specific objectives including: (1) Assess the status of operational efficiency of MFIs in Vietnam; (2) Identify factors affecting the performance of MFIs in Vietnam; (3) Assess the impact of women's empowerment on the performance of MFIs in Vietnam; (4) Proposing policy implications to improve the performance of Vietnamese MFIs Compared with the previous studies, the thesis has made the following new contributions: Based on Data Envelopment Analysis (DEA), the author evaluated the performance of 26 Vietnamese microfinance institutions The previous studies, when analyzing business operations and assessing business performance in general and MFI in particular, often used the main financial indicators such as ROA, ROE, NIM, because of the calculation relatively simple and easy to understand Each financial indicator expresses the relationship between the two variables, reflecting an aspect of MFI's performance Therefore, to fully evaluate the performance of MFI, we must use a series of different criteria This makes it difficult for administrators and other state management agencies to evaluate and compare the performance of MFIs, especially when evaluating the efficiency of using resources to create complex financial products and services such as those of MFI (Manandhar and Tang, 2002) To overcome the disadvantages in the method of analyzing financial indicators, the thesis has used Data Envelopment Analysis (DEA) to evaluate the performance of MFIs In addition, based on data sources of 26 MFIs in the period of 2013 - 2017, the author has identified factors affecting the performance of MFIs in Vietnam Compared to previous studies, the thesis more comprehensively examines the impact of women's empowerment on the performance aspects of Vietnamese microfinance institutions by quantitative research methods along with the Stata 15.0 software support Specifically, the author assesses the impact of women's empowerment on the performance aspects of microfinance institutions by estimating models using Blundell and Bond's SGMM method (1998) This method is commonly used in linear dynamic panel data estimates to overcome endogenous phenomena that often occur in macroeconomic models Therefore, the obtained results ensure the reliability to draw conclusions Thus, the research results provide rigorous evidence to support the theory of the impact of women's empowerment on the performance of Vietnamese microfinance institutions At the same time, the research results also provide a basis for research methods to assess this impact In practice, stemming from the fact that the majority of MFIs in Vietnam have achieved their self-sustainability performance indicators but the results are not high and uneven (Nguyen Kim Anh and Le Thanh Tam 2013), the author considers the role of women's empowerment as a catalyst, better and more effectively control the performance of MFIs in Vietnam The results of the research will help policymakers set out solutions for sustainable development and improve the efficiency of MFIs in Vietnam so that these organizations can develop commensurate with their potential and play an important role in the national strategy of comprehensive finance in Vietnam in the future 1.7 Thesis structure To solve the research objectives of the topic, the thesis is structured with five chapters: - Chapter 1: Introduction - Chapter 2: Theoretical basis and related studies - Chapter 3: Research Methods - Chapter 4: Experimental research results - Chapter 5: Conclusions and policy implications 20 Cost per CPB borrower Ln(Total operating expenses - / Number of borrowers) Schäfer and Fukasawa (2011), Dissanayak e (2014), Ngo (2015), Abdulai and Tewari (2017), The age of AGE Number of years of operation of MFIs the microfinance institutions at + the time of study Dao Lan Phuong Le Thanh Tam (2017), Abdulai and Tewari (2017) 3.3 Estimation methods 3.3.1 Fixed-effects model (FEM) 3.3.2 Random-effects model (REM) 3.3.3 SGMM estimation method 3.4 Collect and process data  Sample size: As a rule of thumb, the sample size must be at least times the number of variables in the model (Hair et al., 2006) The experimental research model consists of a maximum of variables, so the minimum sample size is 45 observations With the panel data covering 26 MFIs collected from 2013 to 2017, the sample includes 26 x = 130 observations and meets the requirement for conformance 21  Methods of collecting and processing data: According to statistics of the State Bank of Vietnam as of June 30, 2019, there are four official MFIs, which are M7 Microfinance Institution Limited, Tinh Thuong Microfinance Institution Limited, and Thanh Hoa microfinance institution, Capital Aid Fund For Employment of The Poor In addition to the official MFIs, there are 30 semi-formal MFIs in microfinance programs and projects operating in Vietnam (Microfinance Directory, 2018) However, the information of these MFIs is not complete, so the author conducted the study with the 26 most complete MFIs Research data is the annual financial statements of 26 MFIs in Vietnam for the period 2013-2017 provided by MIX Market MIX Market is a website operated by Microfinance Information Exchange (MIX) The MIX Market website allows microfinance programs to post information, including audited financial statements and performance indicators, to receive ratings based on the transparency of the information Regarding the study time, the author conducted at 26 MFI in the period of 2013 - 2017 This stage was selected by the author to carry out the study because to ensure that 26 MFIs have enough data to calculate the variables in the research model 22 CHAPTER 4: EXPERIMENTAL RESEARCH RESULTS 4.1 Actual situation of Vietnamese microfinance institutions:  Customer growth Unit: Person 7,900,000 7,800,000 7,790,466 7,816,377 7,746,045 7,700,000 7,600,000 7,554,032 7,480,392 7,500,000 7,400,000 7,300,000 2013 2014 2015 2016 2017 Figure 4.1: Number of customers of MFIs Vietnam from 2013 to 2017 Source: Mix market  Total outstanding loans Unit: VND billion 200,000 160,445 168,590 2013 2014 180,614 162,880 146,196 150,000 100,000 50,000 2015 2016 2017 Figure 4.2: Total outstanding loans to customers of MFI Vietnam in the period of 2013 - 2017 Source: Mix market  Number of employees 23 Unit: Person 14,000 13,469 13,500 12,934 13,000 13,169 12,634 12,500 12,000 11,750 11,500 11,000 10,500 2013 2014 2015 2016 2017 Figure 4.3: Number of employees of MFIs Vietnam from 2013 to 2017 Source: Mix market  Operating expenses Unit: VND billion 18,000 16,310 16,000 14,000 12,152 13,090 14,033 13,580 2015 2016 12,000 10,000 8,000 6,000 4,000 2,000 2013 2014 2017 Figure 4.4: Operating expenses of Vietnamese MFIs in the period of 2013 2017 Source: Mix market 24 4.2 Descriptive statistics of research samples and correlations between variables: Descriptive statistical results measuring characteristic quantities for the study variables are shown in Table 4.1 Table 4.1 Statistical results describe the variables in the model Variable Number of Mean Standard error Min Max observations Dependent variable ROA 130 040561 0430161 -.1781117 1482542 ROE 130 1279397 1616091 -.5182695 1.069242 OSS 129 1.389881 3978275 3436663 2.900789 Independent variables AGE 130 12.76923 6.654879 27 CPB 130 13.32789 1.042988 10.5491 17.0967 OEA 130 2770734 1.797112 1.11e-09 20.57519 DER 130 4830661 8091353 0181009 9.066581 PAR30 128 007266 0233176 1928 GLP 130 24.75121 2.498789 21.61813 32.68964 25 NAB 130 9.198301 1.973082 5.817111 15.77561 Source: Calculation results from STATA 15 software  Correlation coefficient matrix: Table 4.2 Matrix correlation coefficient roa roe oss pfb age cpb oea der par30 glp nab te se roa roe oss pfb age cpb oea 1.0000 0.6432 0.7191 0.1442 0.0635 -0.1372 -0.0416 0.2219 -0.4061 -0.0955 -0.0850 0.0434 -0.0882 1.0000 0.3223 0.2093 -0.0412 0.0234 0.0195 -0.2268 -0.3390 -0.0751 -0.1036 -0.1051 -0.1965 1.0000 0.1817 0.1062 -0.3885 -0.0741 0.4231 -0.1783 -0.1833 -0.1455 0.3378 0.1130 1.0000 -0.5149 -0.4914 0.0242 0.1153 -0.1197 -0.7655 -0.6683 -0.3710 -0.2926 1.0000 0.1937 -0.1496 -0.1661 -0.0134 0.5637 0.5522 0.3656 0.2168 1.0000 -0.0855 -0.3544 0.0444 0.5568 0.3400 -0.2958 -0.1257 1.0000 0.0052 -0.0241 0.0163 0.0981 0.1259 0.0802 der par30 1.0000 0.0379 -0.2881 -0.2213 0.0459 0.0681 1.0000 0.0047 0.0487 -0.0326 0.0420 nab glp te se 1.0000 0.9435 1.0000 0.3704 0.4358 1.0000 0.3837 0.4443 0.6278 1.0000 Source: Calculation results from STATA 15 software  Multicollinearity test: Table 4.3 Multicollinearity test between independent variables Variable VIF 1/VIF GLP 3.47 0.288184 NAB 2.89 0.346021 CPB 2.87 0.348475 PFB 2.84 0.352234 26 AGE 1.64 0.608177 OEA 1.14 0.880859 PAR30 1.13 0.881659 DER 1.02 0.982173 Mean VIF 2.125 Source: Calculation results from STATA 15 software 4.3 Results of evaluating the performance of Vietnamese microfinance institutions 4.3.1 Evaluate the performance of Vietnamese microfinance institutions through financial indicators 0.0700 0.0600 0.0500 0.0400 0.0300 0.0200 0.0100 0.0000 2013 ROA 0.0370 ROA (Chính thức) 0.0420 ROA (Phi thức) 0.0361 2014 0.0487 0.0613 0.0464 2015 0.0387 0.0539 0.0359 2016 0.0391 0.0410 0.0388 2017 0.0392 0.0381 0.0394 Figure 4.5: Net profit on average assets of MFI Vietnam in the period of 2013 2017 Source: Mix market 27 0.250 0.200 0.150 0.100 0.050 0.000 2013 ROE 0.098 ROE (Chính thức) 0.1951 ROE (Phi thức) 0.0801 2014 0.1638 0.2161 0.1543 2015 0.1075 0.1527 0.0993 2016 0.1129 0.1371 0.1085 2017 0.1576 0.1628 0.1567 Figure 4.6: Net profit on average equity of MFI Vietnam in the period of 2013 2017 Source: Mix market 1.6 1.4 1.2 0.8 0.6 0.4 0.2 OSS OSS (Chính Thức) OSS (Phi Chính thức) 2013 1.488 1.408 1.504 2014 1.4 1.27 1.425 2015 1.337 1.248 1.353 2016 1.36 1.22 1.385 2017 1.362 1.218 1.388 Figure 4.7: Self-sustainability ratio of the average operation of MFI Vietnam in the period of 2013 - 2017 Source: Mix marke 4.3.2 Evaluate the performance of Vietnamese microfinance institutions through data analysis 28 Table 4.4 DEA results of MFIs CRSTE ID Mean Min VRSTE Max Mean Min SE Max Mean Min Max 0.28 0.19 0.41 1.00 0.99 1.00 0.28 0.19 0.41 0.26 0.18 0.35 0.34 0.25 0.38 0.76 0.68 0.92 0.32 0.19 0.47 0.35 0.21 0.48 0.90 0.70 0.97 0.71 0.66 0.77 1.00 1.00 1.00 0.71 0.66 0.77 0.93 0.82 1.00 1.00 1.00 1.00 0.93 0.82 1.00 0.92 0.62 1.00 0.94 0.70 1.00 0.97 0.88 1.00 0.40 0.21 0.93 0.89 0.70 1.00 0.44 0.25 0.93 0.81 0.59 1.00 0.83 0.59 1.00 0.97 0.93 1.00 0.91 0.64 1.00 1.00 1.00 1.00 0.91 0.64 1.00 10 0.58 0.23 1.00 0.64 0.29 1.00 0.91 0.78 1.00 11 0.39 0.22 0.56 0.79 0.56 1.00 0.55 0.30 0.88 12 0.33 0.21 0.46 0.50 0.43 0.55 0.66 0.41 0.83 13 0.54 0.23 1.00 0.83 0.56 1.00 0.62 0.31 1.00 14 0.53 0.22 0.94 0.61 0.33 1.00 0.81 0.68 0.99 15 0.45 0.36 0.58 0.81 0.63 0.97 0.57 0.44 0.92 16 0.41 0.21 1.00 0.44 0.25 1.00 0.90 0.83 1.00 17 0.69 0.44 1.00 0.83 0.67 1.00 0.82 0.65 1.00 18 0.37 0.23 0.44 0.44 0.26 0.59 0.87 0.74 1.00 19 0.53 0.37 0.77 0.70 0.53 0.80 0.74 0.55 0.95 20 0.38 0.30 0.49 0.64 0.48 0.78 0.60 0.51 0.63 21 0.47 0.38 0.59 0.52 0.44 0.60 0.91 0.72 1.00 22 0.35 0.20 0.47 0.42 0.30 0.50 0.82 0.68 0.95 23 0.38 0.22 0.65 0.46 0.29 0.68 0.82 0.61 0.99 24 0.83 0.66 1.00 0.97 0.83 1.00 0.86 0.66 1.00 25 0.37 0.33 0.41 0.57 0.36 0.66 0.69 0.50 0.99 26 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Source: analysis results from DEAP 2.1 software 29 4.4 Results of the model estimation of factors affecting the performance of Vietnamese microfinance institutions Table 4.5 Summary of the results of the evaluation of factors affecting the performance of MFIs Performance of Vietnamese microfinance institutions Index Factors Test results of research hypotheses ROA Ratio of equity to total assets (+), ratio of operating expenses to total assets (-), risk ratio of investment portfolio (-) Accept hypothesis H4, hypothesis H5, hypothesis H6 ROE Risk ratio of portfolio (-), operating expenses to total assets ratio (-), age of MFI (-), total loan portfolio (+) Accept hypothesis H5, hypothesis H6, hypothesis H3 OSS Ratio of operating expenses to total assets (-), Equity ratio to total assets (+), Risk ratio of investment portfolio increasing (-) Accept hypothesis H4, hypothesis H5, hypothesis H6 Accept hypothesis H5, hypothesis H6 TE The age of MFI (-), the ratio of operating expenses to total assets (-), the ratio of cost per borrower increases (+), the ratio of equity to total assets (-), Risk Profitability aspect Self-sustainable aspect Aspect of allocative efficiency Reject hypothesis H1 Reject hypothesis H1, hypothesis H4, hypothesis H7 30 ratio of portfolio (-) SE The age of MFI (-), the ratio of operating expenses to total assets (-), the ratio of cost per borrower increases (+), the ratio of equity to total assets (-), Risk ratio of investment portfolio (-), Net borrower growth (+) Accept hypothesis H5, hypothesis H6, hypothesis H2 Reject hypothesis H1, hypothesis H4, hypothesis H7 Source: Summary of the author 4.5 Results of estimating the model of the impact of women's empowerment on the performance of Vietnamese microfinance institutions Table 4.6 Summary of the impact of women's empowerment on the performance of Vietnamese microfinance institutions Performance of Vietnamese microfinance institutions Index ROA Results of the impact of women's empowerment Test results of research hypotheses Positive impact Accept hypothesis H8 Positive impact Accept hypothesis H8 Positive impact Accept hypothesis H8 There is no impact Reject hypothesis H8 Positive impact Accept hypothesis H8 Profitability aspect ROE Self-sustainable aspect OSS TE Aspect of allocative efficiency SE Source: Summary of the author 31 CHAPTER 5: CONCLUSION AND POLICY IMPLICATIONS 5.1 Conclusion The thesis focuses on specific objectives including: (1) Assess the status of operational efficiency of MFIs in Vietnam; (2) Identify factors affecting the performance of MFIs in Vietnam; (3) Assess the impact of women's empowerment on the performance of MFIs in Vietnam; (4) Proposing policy implications to improve the performance of Vietnamese MFIs With the first specific research objective is to assess the current performance status of MFIs in Vietnam, the author presented theoretical basis as well as conducted a profile of domestic and foreign studies related to evaluate the performance of MFIs The performance evaluation of MFIs is conducted through an evaluation of profitability indicators and DEA The results of the profitability index show that the average ROA of the MFIs in the sample is greater than 2%, the average ROA in the whole period is 4.05% / year Besides, most of the MFIs officially had ROE greater than 15% / year in the period of 2013 - 2017 While, the average ROE of the informal MFIs was almost below 15% / year This result shows that MFIs are more effective than informal MFIs because after MFIs are officially licensed, MFIs are more likely to develop microfinance activities, expand the scope of operations and customers by increasing capital for business activities When considering the performance of MFIs in terms of self-sustainability, the OSS ratio shows that the MFIs in the research sample (both formal and informal) achieve long-term operational sustainability In addition, the operational sustainability of formal MFIs is lower than that of informal MFIs due to operational scale DEA analysis results show that 31% of MFIs have efficacy scale above 0.90 At the same time, the analysis of the constant technical efficiency of the MFIs of Vietnam also shows that it is possible to increase the efficiency of these organizations by 46% through the application of MFI's input allocation strategies The most effective in the sample is Vietnam Bank for Social Policies In addition, DEA analysis shows that in the period of 2013 - 2018, the labor force in Vietnamese MFIs was not used effectively 32 In order to achieve the second specific research objective of identifying the factors affecting the performance of MFIs in Vietnam, besides presenting the theoretical basis, the author also conducted a survey of studies Research on domestic and international issues on factors affecting the performance of MFIs Based on the inheritance of previous studies, the author proposes a model of factors that affect the performance of MFIs Specifically, the performance of Vietnamese MFIs in this study is considered in terms of profitability, selfsustainability in performance and allocation efficiency Using panel data with 26 MFI Vietnam in the period of 2013 - 2017, the author estimated the models using fixed impact method (FEM), random impact method (REM) and System Generalized method of moments (SGMM) To ensure the reliability of the estimate before discussing the results, the author also conducted necessary tests such as Modified Wald, Wooldridge, Breusch and Pagan Langrangian multiplier, Hausman, first-order autocorrelation test ( AR (1)), 2nd degree autocorrelation (AR (2)), Hansen test Testing results show that the models ensure reliability for conducting analysis The model estimation results show that, in the case of performance shown in terms of profitability with ROA, ROE, showing the delay of ROA, the ratio of equity to total assets, the ratio of operating expenses to total assets, and the portfolio's risk ratio affecting ROA At the same time, the research results also show that the portfolio's risk ratio, operating cost ratio to total assets, the age of MFI and the total loan portfolio affect ROE The results of the model estimation of factors affecting the performance of MFIs, in case the performance is shown in terms of self-sustainability in operation with OSS, shows the ability to past performance, the ratio of operating expenses to total assets, equity to total assets, and the portfolio's risk ratio affecting selfsustainability of MFIs The results of estimating the factors affecting the performance of MFIs, in the case of operational efficiency shown by the efficiency of allocation with TE and SE indicators, show past technical efficiency and past scale performance, age of 33 MFI, cost per borrower, ratio of operating expenses to total assets, equity to total assets, portfolio risk ratio real investment and growth in the number of borrowers affects the performance of MFIs To achieve the third specific research objective is to assess the impact of women's empowerment on the performance of MFIs in Vietnam, besides presenting a theoretical basis, the author also conducted Review relevant domestic and foreign studies on the impact of women's empowerment on the performance of MFIs Based on the results of previous studies, the author proposes a model for the impact of women's empowerment on the performance of MFIs The author has estimated the models using fixed impact method (FEM), random impact method (REM) and System Generalized method of moments (SGMM) To ensure the reliability of the estimate before discussing the results, the author also conducted necessary tests such as Modified Wald, Wooldridge, Breusch and Pagan Langrangian multiplier, Hausman, first-order autocorrelation test ( AR (1)), 2nd degree autocorrelation (AR (2)), Hansen test Testing results show that the models ensure reliability for conducting analysis The model estimation results in the case of the performance of the performance results in terms of profitability with ROA and ROE indicators show that empowerment of women has a positive impact on the profitability of Vietnamese MFIs The same results for the positive impact of women's empowerment on the performance of MFIs are also consistent in the case of performance in terms of self-sustainability in performance with the OSS The results of estimating the model of the impact of women's empowerment on the performance of MFIs, in the case of operational efficiency shown by the efficiency of allocation with TE and SE indicators, show that women's empowerment does not have an impact on the technical effectiveness of MFIs but has an impact on the scale effectiveness of MFIs Based on the results of this research, the author proposes policy implications to improve the performance of MFIs 34 5.2 Policy implications Based on the research results mentioned in the previous section, the policy implications proposed by the author to focus on the following are: - - Improve the overall operational efficiency of MFIs in Vietnam - - Improve factors that promote the performance of MFIs in Vietnam - - Facilitate easy access to finance for women ... STATA 15 software 4.3 Results of evaluating the performance of Vietnamese microfinance institutions 4.3.1 Evaluate the performance of Vietnamese microfinance institutions through financial indicators... outstanding Person customers at MFI 3.2.2 Method of assessing factors affecting the performance of microfinance institutions in Vietnam To assess the factors affecting the performance of microfinance. ..MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY HO CHI MINH CITY NGUYEN NGOC TAN PERFORMANCE OF MICROFINANCE INSTITUTIONS IN VIETNAM SUMMARY OF PHD THESIS Major: Finance