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Bank-financed banks on wheels bring services to remote
farmers, businesses |
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Hai Phong, March 30, 2004.
Today, more than 240 mobile banking cars were
put into service to help bring banking services to people in
the rural, remote parts of Vietnam.
The Vietnam Bank for Agriculture and the Bank for
Development and Investment held a ceremony today to
officially receive the cars, which were financed under the
World Bank’s second Rural Finance Project, and then
distribute them to provincial and district bank branches all
over the country.
"A country’s banking system is like its blood system. For
the country to function at its peak and to include the poor
and the disadvantaged, basic banking services must reach out
to the villages and hamlets, to the farmers and small
businesses in remote areas – they are the core of Vietnam’s
society,” said Klaus Rohland, Director of the World Bank in
Vietnam, from Hanoi. "We congratulate the Government of
Vietnam, the Vietnam Bank for Agriculture and the Bank for
Development and Investment for their remarkable progress in
bringing rural finance to the people.”
Mobile banking cars were first introduced on a large scale
in Vietnam in 2000 and 2001 when 159 mobile banking cars
were provided through the first Rural Finance project,
funded by the World Bank. Since then, each mobile banking
car visits an average of 62 remote locations a month, adding
around 2,000 new savings accounts, worth VND19 billion, and
nearly 2,000 new loans, worth VND15 billion; and collecting
more than VND10 billion in loan payments a month. Already,
these mobile banking operations have helped rural
households, including ethnic minority households, to
maintain and improve their livelihoods through increasing
their access to banking services.
Following the success of the first Rural Finance Project,
the second project adds another US$250 million of investment
into 90,000 small and medium-sized rural businesses, US$36
million worth of microfinance loans to serve 75,000 farm
households and 10,000 micro-enterprises, and US$5 million
for improving the management and operation of participating
financial institutions. Mr. Phung Khac Ke, Deputy Governor
of the State Bank of Vietnam who was present at the ceremony
said that these mobile banking cars are another visual
example of how the banking sector can help fight poverty in
rural areas of Vietnam where 93 percent of the country’s
poor live. In its first year, the project has already pumped
more than US$63 million to more than 40,000 rural families
and businesses all around Vietnam.
"The World Bank sees improvements to Vietnam’s banking
sector, particularly banking in the rural area, as critical
to the country’s growth and ability to reduce poverty,” said
Rohland. "We are ready to assist Vietnam in addressing the
policies need to make sure that rural financial institutions
are viable over the long term and able to gradually reduce
their dependence on the state budget."
The World Bank’s support of the Second Rural Finance Project
began in mid-2003. The project aims to assist the Government
in its efforts to develop the rural economy and improve
living conditions in the rural areas, through encouraging
investment by farm households and private rural
entrepreneurs; strengthening the banking system’s capacity
to better serve the rural economy; and increasing access of
the rural poor to financial services.
The project follows the successful first Rural Finance
Project, which benefited almost a quarter of a million
households. From 1998 to 2001, nearly 650,000 loans were
made to 250,000 households throughout rural Vietnam through
seven participating banks. Thirty percent of the borrowers
were women. Most loans were small, averaging VND 5.4
million, equal to US$360, and were used to expand farm
production (crops, livestock and aquaculture), agricultural
processing, services and trading.
For more information about the first and second Rural
Finance projects, please visit our web site at
www.worldbank.org.vn
. For a photo of a mobile banking car in service in Lao Cai,
please contact Thanh Ha at
hha@worldbank.org .
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For more information on the World Bank in Vietnam, please visit
our Web site at
www.worldbank.org.vn
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