Mobile banking for the poor in Vietnam

Mobile banking for the poor in Vietnam

Round 1 Vietnam ICT/Financial Inclusion Completed



Partner contribution

$ 1,999,200

DFAT contribution

$ 500,000

Icon Total Funds

Total Value

$ 2,499,200

Start: September 2016 - End: August 2018


The Vietnam Bank for Social Policies

The Vietnam Bank for Social Policies (VBSP) is a government-owned bank, taking the lead in policy and the microfinance field in Vietnam. It enables financial inclusion of the poor and policy beneficiaries through grassroots networks, appropriate infrastructure, socialised procedures and skilled staff.

The Asia Foundation

The Asia Foundation (TAF) is a non-profit international development organisation committed to improving lives in Asia. With 60 years’ experience, TAF aims to strengthen governance, empower women, expand economic opportunity, increase environmental resilience, and promote regional cooperation. Access to decent work and livelihood support for vulnerable populations is a key priority in Cambodia for TAF, and this initiative builds upon research and a pilot study, led by TAF, that identified a demand for job information in the apparel segment of the applied labour sector.


MasterCard is an American multinational financial services corporation. Its principal business is to process payments between the banks of merchants and the banks or credit unions of the purchasers who use MasterCard.

About this partnership

This partnership aimed to prepare the Vietnam Bank for Social Policies (VBSP) to roll out full-scale mobile banking for its clientele nationwide. Approximately two-thirds of Vietnam’s 90 million people remain disconnected from the formal banking system, due in large part to the high cost of operating bank branches in remote areas where small, frequent transactions are common. For rural areas especially, lack of affordable access to financial services is a major constraint to development.

Recognising that digital technology is an enabler for economic development and growth, the partnership sought to bring greater access to digital finance options to the VBSP’s clients. By improving mobile banking technology and expanding its availability, the initiative aimed to reduce the cost of banking for the VBSP’s clients and provide them with access to more diversified services, such as SMS banking, that will increase the bank’s competitiveness over the longer term. The initiative drew on TAF’s broader aim of supporting women’s economic empowerment and Mastercard’s long term goal of building its client base in Vietnam.

Established in 2002 as a not-for-profit policy bank, the VBSP is Vietnam’s largest microfinance provider, assisting low income households with preferential credit and savings accounts. The government owned-VBSP plays a key role in mobilising resources to implement the government’s social policy lending programs. Around 90 per cent of the VBSP’s seven million clients live in rural, remote and mountainous areas. Due to its large client base, geographic spread and the nature of its operations, the bank’s operational model was regarded as inefficient and costly, offering poor households only limited access to banking services, and creating challenges that inhibit effective communication and transparency.

The VBSP was the implementing partner in this partnership. The Asia Foundation managed the initiative and facilitated a better understanding of the impact of financial inclusion among the partners and Vietnamese regulatory agencies, and coordinated bank staff and technical training. Mastercard provided technical support to the VBSP to upgrade its IT system.

Officially launched by the partners in February 2017, the initiative comprised of two phases. Phase 1 established the foundations for mobile banking including investing in software and hardware to enable SMS notifications to VBSP customers and educating both VBSP staff and customers in the new technology service. Training programs and orientation materials were developed for bank staff and customers on the introduction of SMS notifications. Given the number of customers with low levels of education and literacy, the bank included face-to-face orientation and hands-on guidance by trained VBSP branch staff. This phase exceeded planned targets, reaching 4.9 million clients (51 per cent women) across 63 branches with SMS account-related notifications such as repayment schedules and monthly account balances.

Phase 2 of this initiative comprised of the building and roll out of the mobile banking platform. Unexpected challenges led to substantial changes and delays largely around upgrades to the VBSP IT system, technology transference and changes to Vietnamese cybersecurity laws resulting in the planned use of Mastercard’s existing Financial Inclusion cloud platform – hosted outside Vietnam – to no longer be viable. The VBSP is now building its own platform that will be owned and managed by the bank, enabling it to provide mobile banking and eventually other digital financial services to meet the increasing and diverse needs of its clients in the long term. This will require significant technical input from Mastercard with the new platform tentatively planned to go live by the end of 2020.


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