LV Thạc sĩ_Development of microfinance in vietnam

i TABLE OF CONTENTS ABBREVIATION iii LIST OF TABLES iv LIST OF FIGURES .v ii ABBREVIATION ADB Asian Development Bank CEP Capital Aid Funds for the Employment of the Poor CGAP Consultative Group to Assist the Poor CI Credit institution HEPR Hunger Eradication & Poverty Reduction IPO Initial Public Offering MFI Microfinance Institution MIX Microfinance Information Exchange MOF Ministry of Finance NGO Non-government organization PCF People’s Credit Fund RSHB Rural Shareholding Bank SBV State Bank of Vietnam SME Small and Medium Enterprises TYM Tau Yeu May Fund VBARD Vietnam Bank for Agriculture & Rural Development VBSP Vietnam Bank for Social Policies iii LIST OF TABLES LIST OF FIGURES iv EXECUTIVE SUMMARY If you look back into the past 20 years history of finance, the most important finding did not come from the world of the rich with hedge funds and derivatives instruments, it also did not come from the ideas of securitization or options which created one of the greatest recessions in modern history; it is the finding that the poor who has nothing but hope, dream and endeavor to overcome their situation can access to banking service to save, borrow, and manage their own money and certainly repay their loans This is nowadays widely known as Microfinance The last two decades have witnessed a remarkable rise for microfinance as a strategy for poverty alleviation The microfinance sector blossomed in many countries, leading to multiple financial services firms serving the needs of micro entrepreneurs and poor households However, the rapid scale up also leads to multiple problems for MFIs e.g finding sources of funds, maintain the good financial situation and quality of services Microfinance in Vietnam dated back in 1990s with the establishment of VBARD which provided several simple services to poor people who live in the rural area Other MFIs which are owned by socio-political organizations are gradually found in 1990s and 2000s Those institutions initially have succeeded in solving the issue of poverty alleviation Like many MFIs in other countries, in order to satisfy the increasing demand of clients and develop in a sustainable manner, MFIs now cannot solely rely on subsidized funds of social minded organizations, instead they have to gradually transform to commercialized MFIs which can self finance and seek funds from normal investors The migration into regulated commercial banking territory of MFIs placed financial viability at one of its major concern besides social performance The MFIs tend to drift away from their original mission of poverty alleviation In my dissertation, I will examine the Vietnamese microfinance market in general and look inside into social and financial performance of the formal and semi formal sector of microfinance In the formal sector that are VBARD and VBSP The representative of the semiformal sector is the TYM Fund After doing research and analyzing the financial situation of TYM, I am surprised of how good a MFI can to not only serve the poor but also maintain a good financial performance Up to the time of the dissertation, there is no clear evidence of mission drift in TYM However, in order to expand the success of TYM throughout the country, the other MFIs as well as the government still have many things to to improve the operating efficiency in each institution and create a competitive market for microfinance participants CHAPTER 1: THEORETICAL BACKGROUND OF MICROFINANCE & MISSION DRIFT 1.1 Introduction to Microfinance 1.1.1 History of Microfinance Although the concept of microfinance had only evolved in the late 1970s with the experimental microfinance programs in Bangladesh and Brazil, the idea of microfinance which is the supply of loans, savings and other financial services to the poor eventually has a longer history 1.1.1.1 Early history The early history of Microfinance dated back in 1700s in Ireland One of the earlier and longer-lived micro credit organizations providing small loans to rural poor with no collateral was the Irish Loan Fund system by nationalist Jonathan Swift Swift's idea began slowly but by the 1840s had become a widespread institution of about 300 funds all over Ireland Their principal purpose was making small loans with interest for short periods At their peak they were making loans to 20% of all Irish households annually In the 1800s, various types of larger and more formal savings and credit institutions began to emerge in Europe, organized primarily among the rural and urban poor These institutions were known as People's Banks, Credit Unions, and Savings and Credit Co-operatives The concept of the credit union was developed by Friedrich Wilhelm Raiffeisen and his supporters from that time Their innovations were motivated by concern to assist the rural population to break out of their dependence on moneylenders and to improve their welfare From 1870, the unions expanded rapidly over Germany and other countries in Europe and North America In the early 1900s, various adaptations of these models began to appear in parts of rural Latin America with two specific objectives: increased commercialization of the rural sector, by mobilizing "idle" savings and increasing investment through credit, and reducing oppressive feudal relations that were enforced through indebtedness In most cases, these new banks for the poor were not owned by the poor themselves, as they had been in Europe, but by government agencies or private banks Over the years, these institutions became inefficient and at times, abusive Time 1700s – 1840s Event Irish Loan Fund providing small loans to rural poor with no 1800s collateral has over 300 funds all over Ireland Various types of larger and more formal savings and CIs began emerge in Europe E.g People’s Bank, Credit Unions, Savings & 1870s Credit Co-operatives Credit Unions expanded rapidly in Germany, EU, and North 1950s – 1970s America Governments and donors providing agricultural credit to small and marginal farmers through rural development banks but it did not succeed Table 1.1: Early history of Microfinance Between the 1950s and 1970s, governments and donors focused on providing agricultural credit to small and marginal farmers, in hopes of raising productivity and incomes These efforts emphasized supply-led government interventions through state-owned development finance institutions, or farmers' cooperatives in some cases, that received favorable loans and on-lent to customers at below-market interest rates These subsidized schemes were rarely successful Rural development banks suffered massive loss and erosion of their capital base due to subsidized lending rates and poor repayment discipline and the funds did not always reach the poor, often ending up concentrated in the hands of better-off farmers 1.1.1.2 The evolution of concept - Microfinance The expression microfinance has its roots in the 1976 when the organization - Grameen Bank of Bangladesh with the microfinance pioneer Mohammad Yunus started and built the modern industry of microfinance Another pioneer in this sector is Akhtar Hameed Khan At that time a new wave of microfinance initiatives introduced many new innovations into the sector Many pioneering enterprises began experimenting with loaning to the underserved people The main reason why microfinance is dated to the 1970s is that the programs could show that people can be relied on to repay their loans and that it´s possible to provide financial services to poor people through market based enterprises without subsidy Today the World Bank estimates that more than 16 million people are served by some 7000 microfinance institutions all over the world CGAP experts mean that about 500 million families benefits from these small loans making new business possible In a gathering at a Microcredit Summit in Washington DC the goal was reaching 100 million of the world´s poorest people by credits from the world leaders and major financial institutions 1.1.2 Definitions of Microfinance Everybody agrees that there is no unique definition of “microfinance,” yet it does not stop the ongoing debate over whether certain models are “right” or “wrong” It seems that the “wrong” designation may shift or drift the original and lofty mission of microfinance to another way Thus, before going deeper into the alert of scholars around “mission drift”, we first must have a look at several versions of the definition of microfinance According to ADB, “Microfinance is the provision of a broad range of financial services such as deposits, loans, payment services, money transfers, and insurance to poor and low-income households and, their microenterprises Microfinance services are provided by three types of sources: • formal institutions, such as rural banks and cooperatives; • semiformal institutions, such as nongovernment organizations; and • informal sources such as money lenders and shopkeepers Institutional microfinance is defined to include microfinance services provided by both formal and semiformal institutions Microfinance institutions are defined as institutions whose major business is the provision of microfinance services.” For analysis purpose, Microfinance Information Exchange (MIX) employs a functional definition that “Microfinance services – as opposed to financial services in general – are retail financial services that are relatively small in relation to the income of a typical individual Specifically, the average outstanding balance of microfinance products is no greater than 250% of the average income per person (GNI per capita).” The broader definition by CGAP which is recognized by a large number of organizations including WB is “Microfinance is often defined as financial services for poor and low-income clients In practice, the term is often used more narrowly to refer to loans and other services from providers that identify themselves as “microfinance institutions” (MFIs) These institutions commonly tend to use new methods developed over the last 30 years to deliver very small loans to unsalaried borrowers, taking little or no collateral These methods include group lending and liability, pre-loan savings requirements, gradually increasing loan sizes, and an implicit guarantee of ready access to future loans if present loans are repaid fully and promptly.” From those definitions, we can derive a brief conclusion which is the common in all above definitions Microfinance refers to a variety of financial services that target low-income customers especially poor people who have limited 38 Table 2.8: Differences between interest expenses of TYM if applying market interest rate 2.4.1.5 Social impacts and testing on evidences of mission drift Rooted in the VWU, the TYM Fund always has maintained its focus on the poor as its social mandate Besides providing financial support for the poor, the weekly or monthly meetings of TYM are used to transfer knowledge and to conduct social activities The centers built community houses and organized visits and collections for disadvantaged families More than 100 women have attended illiteracy eradication classes organized by TYM The annual election of center officials provides the opportunity for many women to develop interpersonal skills and even management capabilities In 2006-2007 alone, TYM organized over 70 courses for more than 2,000 members on micro and small enterprises (MSME) management According to the most recent statistics on Impact Assessment on the occasion of TYM’s 15th Anniversary in 2007, the result show that within years after joining TYM 50% of members had overcome poverty, after years 72% had escaped from poverty on a sustainable basis Sources of income diversified significantly from reliance on agriculture After years, 66% of members saw improved housing conditions and were able to buy valuable household assets such as TVs, gas stoves, refrigerators, or motorbikes The school attendance rate of members’ children increased by 8% to 94%; and 87% had access to official health services TYM indeed did a very good job in improving the life quality of poor people in recent years However, with its rapid growth and transformation to a self-finance MFI, can TYM still keep its success in social performance? Below I will examine the degree of mission drift in a MFI in perspectives: • Depth of outreach through the size of loans • Quality of outreach through the number of clients per staff • Scope of outreach through the range of services 39 a Depth of outreach (The size of loans) Except the leap of more than 50% between 2007 and 2008 due to the large fund infusion of foreign sponsors, during the last years, the average loan balance per borrower increases at a moderate level These increasing rates are generally equal to the inflation rates which are quite high in recent years So we can understand that the increase in size of average loan per borrower in VND nominal term is to compensate for the rise in the overall price level The evidence from aggregate data cannot confirm the claims that as MFIs get older; they tend to drift from its original mission from the perspective of the depth of outreach In the contrast, it shows that TYM is flexible in adjusting its policies to cope with the rapid changes in the market No of active borrowers No of loans outstanding Average loan balance/borrower Average outstanding balance (VND) 2009 40,282 71,856 2008 33,935 67,870 2007 25,482 25,482 2006 22,497 22,497 2005 21,303 N/A 4,508,841 4,155,016 2,759,236 2,376,424 2,413,656 2,527,627 2,077,508 2,759,236 2,376,424 N/A Source: Microfinance Information Exchange Table 2.9: TYM’s number of borrowers and the average loan size b Quality of outreach (number of clients per loan officer) As a poverty alleviation mission-driven organization, TYM emphasized the importance of high quality service for the poor, especially in terms of spending time with each member, providing both business and personal advice, helping them network with each other, giving information on nutrition, health, education, gender issues, market prices and access to public services, among others When 40 organizations scale up, there is a tendency to require a larger number of clients handled by a field officer to reduce transactional cost Such an increased case load may lead to fewer number of hours spent with each client and thus, lower quality service and member satisfaction Therefore, it is important to understand whether since scaling up TYM has been able to maintain the same quality service and the level of personal attention they used to provide when the organization was smaller Also, of importance is whether members left the program because of reasons related to TYM’s scale up Figure 2.4: Comparison between average loan balance per borrower & average outstanding balance & inflation 2005-2009 (in thousand VND) Although there is an increase in the number of borrowers per loan official during the last years, there is no clear evidence of the mission drift It increased from 278 in 2006 to 288 in 2009 except the big leap between 2007 and 2008.This represents 3.6% increase in years This small increase in the number of borrowers per loan official cannot prove any significant deterioration in the quality of services 2009 Borrowers per staff member 288 *Source: Microfinance Information Exchange 2008 381 2007 286 2006 278 2005 N/A 41 Table 2.10: Changes in the number of borrowers per loan officials Moreover, according to the TYM’s Development Plan 2010 – 2014, TYM enjoys an excellent image with its members Loyalty with TYM is high and the dropout rate remains reasonable at – 10% In conclusion, we can deduce from the fact that there is no statistically significant difference or reduction in the quality of outreach in the process of scaling up of TYM c Scope of outreach (The range of services) Currently, TYM only concentrates on providing credit and saving services After transformation to an independent accounting company, its target does not only offer its target group accessible and adequate loan, savings, credit, but also insurance, remittance, and other financial services In the last years, products and services are revised based on regular client satisfaction and needs assessments The range of kinds of loans in 2009 is wider than that in 2007 For example, in 2007, the period of general loan is 50 weeks with maximum lending amount of VND million for new member The maximum of lending amount for the next round is added VND 500,000 after the member repays to TYM both principle and interest of loan in the last round In 2009, the maximum lending amount is designed differently for rural and urban area It is VND million for the rural areas and VND 10 million for the urban areas 42 43 CHAPTER 3: DIRECTIONS AND SOLUTIONS FOR MFIs TO MAINTAIN FINANCIAL SUSTAINABILITY & AVOIDING MISSION DRIFT 3.1 Potential and the orientation for the development of microfinance in Vietnam During the last decades, Vietnamese government has exercised numerous economic reforms in various sectors and got impressive results in economic development and poverty alleviation Average GDP growth rate during this period is more than 7%, particularly in 2007, it is 8.48% The proportion of poor people according to international standard has reduced dramatically from 58% in 1993 to only 11% in 2009 However, with the population of 87 million, and 75% of which live in the rural areas, GDP per capita approximate USD 1000 in 2009, Vietnam is still a low-income country according to international standards In the rural areas, the income level is much lower Vietnamese government has defined Hunger Eradication and Poverty Reduction (HEPR) is a long-term mission in order to improve the living standard for people in the rural areas and improve the social equality and stability With this mission, microfinance plays an important role in helping the poor access to financial services In recent decades, microfinance has gradually proved its position in banking industry in every country and contributed to the poverty alleviation goal around the world In 2009, a National Council on Microfinance was established It and SBV take the full responsibility to compile a program communicating and developing microfinance activities, improving the role of microfinance in poverty alleviation target The program expected to support the industry in areas: • Create a favorable environment for MFIs participating in providing microfinance services • Improve the management, supervision and policy making capacity of government agencies in microfinance activities 44 • Improve the financial strength, agency strength of MFIs Also, governing laws and regulations of microfinance (Decree 28/165, Circular 02) contain many important principles and regulations aimed at promoting best practices, especially good governance, transparency and protection of depositor’s interest However, the scale of Vietnamese MFIs is much smaller than ones in other countries According to the most recent survey, current MFIs only meet 40% the demand of the poor, the rest 60% with about 12 million people still live in the poverty without access to microfinance services This is indeed a big opportunity for MFIs to develop in the future Several orientations for the development of microfinance in Vietnam: • MFIs in Vietnam need to transform to formal MFIs due to decrees No.28 and No.165 This transformation will pay the way for these institutions to provide various services to the poor and reach foreign sources of funds • Develop market based MFIs Interest rates must be calculated at the suitable level to cover expenses and MFIs can operate on the sustainable basis • Expand the scale and capacity of MFIs in providing financial services • Develop more financial services to satisfy the need of every group of clients, coordinate credit services with other nonfinancial services like deposits, remittance, educations, etc • Improve the operation efficiency through applying high technology in controlling risks and serving the customers 3.2 Solutions & recommendations Solutions for MFIs to maintain financial sustainability and avoiding mission drift in their scale up process can be divided into two categories: solutions from government and solutions from the perspectives of MFIs themselves, in this dissertation, from TYM Fund 3.2.1 Solutions from the perspective of the Government 45 In order to promote the development of MFIs in Vietnam, the government has to create a favorable environment for the operation of MFIs These factors include: the stability in macro environment, the competitive market among institutions, suitable policies and laws Moreover, the government needs to provide necessary supports in early years of establishments of these institutions 3.2.1.1 Creating a stable environment A stable environment is the necessary and most basic factor for the development of any industry including microfinance In recent years, the instability of the economy with the very high inflation rates (near 20% in 2007, 13.6% in 2008) has created the feeling of anxiety for every person The high inflation rate leads to the high lending interest rate and make it difficult for the poor to get access to banking credit Unlike the group of rich people, when there is a high inflation, they can convert their money savings to another kind of asset Poor people have no choice to keep their money except deposit money into their bank account It widens the gap between the rich and the poor and dilutes progresses in poverty alleviation process by bringing back a number of people to the poverty level Therefore, the government is expected to create a stable economy and reduce the fluctuations in economic indicators like which happened in recent years 3.2.1.2 Creating a competitive market among MFIs A competitive microfinance market is a critical factor to facilitate the development of this industry Such a market will promote private organizations, foreign and domestic NGOs participating in providing microcredit That not only increases the number of loans but also reduces interest rates and force MFIs operate more efficient to survive However, the government’s subsidized lending policy to the poor through VBSP hinders the development of a fair and competitive market With the interest rate of approximately 0.65% per month, VBSP indeed limited the operation and 46 expansion of other MFIs in the market It also makes other social activists/investor hesitate to participate in the market and in turn limit the ability of borrowing money of the poor They must rely on VBSP because of the unavailability of other organizations On the other hand, a low interest rate policy certainly places VBSP in the position of inefficient and unsustainable operation The expenses for providing loans to the poor greatly exceed the revenues from these activities As the result, it cannot operate without the subsidy of the government Moreover, operating without the financial motivation can lead to the deterioration in quality of services especially in the process of credit assessment and create bad behaviors in which subsidized loans go to better off groups of clients Therefore, in order to promote a fair and competitive market, first of all the government needs to gradually eliminate subsidized lending programs of VBSP and orient this bank toward a market based institutions This action will not only encourage private organization participating in the market but also help VBSP operate more efficient and sustainable The government, on the other hand, can save a huge amount of the state budget instead of continuously covering the loss of VBSP 3.2.1.3 Gradually amending and improving laws and regulations governing the operation of MFIs Currently, there are two decrees No.28/2006/ND-CP and No 165/2007/NDCP and one circular No 02/2008/TT-NHNN governing the operation of MFIs These regulations have positive impacts to the development of microfinance in Vietnam However, there are still shortcomings in the legal system which are needed to be amended and supplemented SBV and MOF are responsible for drafting guiding circulars of above mentioned decrees According to Ms Nguyen Thanh Hop, official of SBV, there would be at least 10 circulars In which, two most important circulars are about the guidance in the transformation process of MFIs 47 However, up to now, only one circular that guiding the organization and operation of small-sized financial institutions in Vietnam has taken effect The other very important circular relating to tax issues and profit distribution of MFIs has not been issued Tax policies, if used properly, can have a big effect on directing funds and encouraging investments in some unfavorable sectors For example, when I examine the operation of TYM, if its sources of funds are not subsidized and TYM is charge with the market interest rate, its ROE reduces to only 10% instead of more than 20% which is lower than that of other commercial credit institutions Thus a tax exemption policy for MFIs may balance the profit ratio between them and other profit seeking companies It in turn can attract investments not only from social mined investors but also normal investors This surely will promote the development of self sustainable institutions which can balance between conflicting objectives of social and financial performance 3.2.2 Solutions from MFIs themselves – case study from TYM Fund Although, there is no clear evidence of mission drift in TYM and this fund has a very good financial performance, in the process of transformation into an independent organization without the subsidy of social organizations, TYM still needs to continuously improve its operating efficiency to face to new challenges in the new environment Through analyzing weaknesses and threats of TYM, in order to continue its success in social as well as financial performance, TYM has to concentrate on improving its operation in the issues of governance, services, scale of operations, and efficiency operation 3.2.2.1 Good governance Besides members who are representatives of the government in TYM, it must consider inviting competent members, external experts and partners to participate in the governance of TYM via the Board of Advisory Committee Along with the scale up process, TYM also needs to strengthen its audit and monitoring 48 capacity and ensure compliance by all staff with the approved policies and procedures TYM Management System (TMS) needs to be further developed to accommodate the growing number of branches, clients and increasing variety of products and services It also needs to develop its own IT Team to develop increase the efficiency in managing works and reducing the reliance on manual labors One of the very good job that TYM has done and must maintain in the future is its commitment to transparency to its partners and the public TYM regularly publishes its operational and financial reports and summits its data to the MIX – an international microfinance forum Its financial statements are annually audited by independent auditors, conducting financial and social ratings, and requesting regular impact assessments 3.2.2.2 Improving the quantity and quality of services for the target group TYM strives to offer its target group accessible and adequate loan, savings, credit insurance and other financial services Products and services need to be revised based on regular client satisfaction and needs assessments Besides keeping core products like general and investment loan, TYM has to conduct research on monthly repayment schemes and design lending products that is more suitable to the members’ repayment capability Interest rates will be based on members’ capacity, their own credit risks market conditions and SBV regulations TYM also needs to increase the amount of savings in total sources of funds instead of heavily relying on borrowings Increasing importance will be given to voluntary savings One of the disadvantages of voluntary savings is its low interest rate compared to other commercialized credit institutions So creating and offering more attractive deposit products would not only attract more clients to TYM but also increase the proportion of deposits in total sources of funding There is a fact that when MFIs commercialize, it changes its goal from society to profit, so it offer limited range of services and only concentrates on services which generate 49 the most profit for the organization Therefore, TYM should continue to provide value added services to its member through its training session to make it different from formal MFI of government like VBSP which has the big advantage over TYM in providing lower interest loans 3.2.2.3 Loyalty to social mission In its scale up process and gradually transforming to a commercial institution without the subsidy of social organizations, TYM still needs to focus on its initial social commitment to empowering women so that they can become socially and economically independent Based on enthusiastic feedback by members, TYM must continue to expand its formalized training activities Using the pool of TYM staff recently trained in adult teaching methodologies, offering the adapted course “Get ahead – Women in Business” to all interested and eligible members Other courses such as “SIYB – Start and Improve Your Business” must also be added to improve the knowledge of the fund’s members However, TYM also needs to be careful in expanding its operation There are a quite number of examples cited that the rapid expansion of MFIs can lead to the deterioration in the quality of services provided or leave its initial mission of serving the poor or mission drift 3.2.2.4 Staff empowerment The most decisive contributing factor for achieving the above growth targets are TYM’s staff However, managing a MFI with 50,000 members is much more different than managing a MFI with 100,000 or 200,000 members Therefore, the ability of staff must be strengthened, especially in the fields of financial management & internal audit The lending decision should be driven down to lower level instead of concentrating on the head office and main branches This would reduce the management cost of the Fund and create the flexibility in management to quickly adapt to any changes in the market and other external environment factors 50 TYM must ensure that all staff are hired on a fair, transparent basis and have the chance to develop their professional skills and capabilities Priority in hiring employees will be given to social committed young people from the areas of TYM’s operations Priority for management positions will be given to TYM staff who have proven their skills and commitment Theoretical knowledge and practical skills will play an increasing role in ensuring TYM’s efficient operations TYM should concentrate on enhancing its in-house training capacities, developing curricula and training staff Moreover, through the support of international social organizations and successful MFIs, TYM should take advantage of external training opportunities to expose its staff to new successful models and ides (Grameen Bank, ASA…) A good working condition and suitable compensation package for staff should also be noticed In a high competitive labor market where competent people are often offered high paid jobs, so TYM should increase its compensation package for good employees in order to maintain a low turnover rate and ensure the stability in the operation of the Fund CONCLUSION 51 Analysis of the typical and most successful model of microfinance in Vietnam – TYM Fund proved that MFIs can balance between conflict objectives of social and financial performance and the poor actually can borrow and repay at the market interest rate like other normal clients Previous ideas of supporting the poor with the low interest rate of the government through state-owned banks like VBARD or VBSP not valid anymore According to the international standard of poverty, there are still million of poor households in Vietnam who need to borrow money to overcome their current situations This is actually a promised market for Vietnamese MFIs Therefore, in order to prepare for the participation of a larger number of MFIs in next a few years, the government needs to create a good legal framework and clear orientation for the development of microfinance In addition, MFIs themselves have to quickly improve its operating efficiency maintain a good financial situation and compete with other ones in the market First successful steps of MFIs in Vietnam have promised the increasing important role of MFIs in the future economic development as a business tool to solve social problems REFERENCES Vietnamese Báo cáo tài kiểm tốn 2005 – 2010 Việt Nam: Xây dựng chiến lược tổng thể để tăng cường khả tiếp cận dịch vụ Tài vi mơ [của người nghèo], Ngân hàng Thế giới, 06/02/2010 TS Hà Hoàng Hợp, THs Nguyễn Minh Hương, Ths Ngô Thị Minh Hương Việt Nam sau gia nhập WTO: Tài vi mơ tiếp cận Tín dụng Người nghèo Nông thôn Trung tâm Phát triển Hội nhập 2007 English Roy Mersland, R.Oystein Strom; Microfinance mission drift?, April 2009 Jaime Aristole B.Alip, O.David Class, Microinsurance in Vietnam, October 2008 Vietnam Women’s Union, TYM Development Plan 2010 – 2014, January 2010 ADB Finance for the poor: Microfinance development strategy, 2000 Magazines, Articles - MicroBanking Bulletin No.16 – No.20, Published by MIX - “What is “Mission Drift” in the context of microfinance industry” – Opportunity International Websites - Microfinance Information Exchange – www.themix.org - TYM Fund official website – www.tymfund.org.vn - Ministry of Finance – www.mof.gov.vn ... CHAPTER 2: MICROFINANCE IN VIETNAM 17 FINANCIAL SUSTAINABILITY & FINDINGS OF MISSION DRIFT 2.1 Overview of Microfinance in Vietnam Microfinance (also known as small-sized finance) in Vietnam has... for microfinance participants 3 CHAPTER 1: THEORETICAL BACKGROUND OF MICROFINANCE & MISSION DRIFT 1.1 Introduction to Microfinance 1.1.1 History of Microfinance Although the concept of microfinance. .. industry of microfinance Another pioneer in this sector is Akhtar Hameed Khan At that time a new wave of microfinance initiatives introduced many new innovations into the sector Many pioneering