UNCDF SHIFT supports Vi Viet by LienVietPostBank, an e-wallet innovation adding bank-led products (savings & credit) to address access and usage of mobile financial services
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BRUSSELS, 19 September 2016 – UNCDF SHIFT announced today that a grant agreement between the United Nations Capital Development Fund (UNCDF) and WSBI member Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank) was signed publicly on 16 September 2016, in the presence of the State Bank of Vietnam, Vietnam Women’s Union, the United Nations Development Program (UNDP), the Australian Department of Foreign Affairs and Trade (DFAT) and the Vietnam Chamber of Commerce and Industry (VCCI).
This agreement of joint investment is based on LienVietPostBank project being one of the winners of the UNCDF SHIFT Challenge Fund Second Window. The SHIFT Challenge Fund seeks to support innovations from private sector organizations in ASEAN on accelerating financial inclusion with particular focus on women as entrepreneurs, employees and consumers. The LienVietPostBank project innovates on available e-wallets in the country by adding bank-led high value products of savings and credit, thereby addressing the need of access and usage of mobile financial services in Vietnam.
As of 2014, only 32% of Vietnamese women (over 15 years old) have bank accounts. Vietnamese women traditionally take charge of household financial management in Vietnam; however, they still remain financially excluded. Around 90% of Vietnam adults are using mobile phones and the percentage of smartphone users have reached 52%. Overall, 93% (mostly aged between 15 and 35), access the Internet via their mobile phones, and 57% of Vietnam internet users are female. As of 2014, only 9.3% of adult population with an account at a bank or another type of financial institution reported making a transaction with money from their account using a mobile phone.
Vietnam is seeing an exponential growth in mobile wallet users, with major mobile wallets having partnerships with banks. A bank-led e-wallet that provides high value products of savings and linking savings behaviour to providing credit in rural and semi-urban areas, will further accelerate the digital mobile financial services usage in the country.
This initiative by LienVietPostBank titled, “Vi Viet – an innovative financial solution for Vietnamese women” will add-on low-cost access to savings and overdraft loans or micro-loans to women and women businesses, apart from existing services in the market - air-time top-ups, peer-to-peer remittance, utility bill payments, insurance premium payment, online shopping etc. By the end of 2018, LienVietPostBank aims to provide services to at least 500,000 female Vi Viet users, with over 2,500 agents/transaction points being female-owned.
Financial literacy and targeting specific segments in rural and remote areas have been a challenge, which this project also addresses by LienVietPostBank partnering with the Vietnam Women’s Union to implement this initiative. Vietnam Women’s Union will organize appropriate training courses to improve the women’s financial literacy on mobile financial services, and help them manage finance effectively with user-friendly and highly secured financial tools.
If this project succeeds in reaching women and women business through digital financial services and increase in usage of financial products, this would result in larger outreach and market penetration to the commune levels, through more than 1,100 LienVietPostBank transaction offices, over 10,000 post offices and 4,000 transaction offices of Vietnam Bank for Social Policy which are currently Vi Viet agents, as well as thousands of individual agents across Vietnam.
This LienVietPostBank project is for a two-year period. The total estimated cost of the project is US$1.2 million, out of which UNCDF SHIFT will support US$325,000 as grant and rest will be met by LienVietPostBank.
The UNCDF SHIFT grant is an example of how WSBI shares funding opportunities with its members like LienVietPostBank on a regulator basis. WSBI is also pleased to assist members They also provide advice and assistance during the application process when requested.
Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank), formerly known as LienVietBank, has been operating in Vietnam from March 28th, 2008. LienVietPostBank is now in the Top 10 largest private banks in Vietnam in terms of total assets and owner’s equity, in the list of Top 100 Vietnam strong brands for 4 consecutive years. To date, LienVietPostBank has 1,198 transaction points, including 131 bank transaction offices and 1,067 postal transaction offices across 63 cities/provinces of Vietnam; more than 10,000 nationwide post offices which can be upgraded to postal transaction offices. In the next 10 years, the Bank’s goal is to expand full banking services to at least 80% of this network throughout Vietnam. LienVietPostBank’s vision is to become a leading retail and universal bank targeting the mass market. It also committed to the Universal Finance Access (UFA) 2020 Goal proposed by the World Bank Group to promote financial inclusion worldwide.
The United Nations Capital Development Fund (UNCDF) is the UN’s capital investment agency for the world’s 48 least developed countries. With its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. UNCDF’s Shaping Inclusive Finance Transformations (SHIFT) programme aims to expand women's economic empowerment through financial inclusion. SHIFT advances financial markets by changing the behavior of market actors to stimulate investment, business innovations and regulatory reform in growing inclusive enterprises. SHIFT catalyses innovative partnerships to accelerate financial inclusion and women's economic participation in the least developed countries of the ASEAN region. The SHIFT programme is jointly co-funded by UNCDF and the Australian Government Department of Foreign Affairs and Trade (DFAT).