Vietnam is now working on creating a framework for the Microfinance Decree of Vietnam. The aim is to create a legal framework for the microfinance industry, which will provide licenses to all MFIs, as well as permit voluntary savings. This is a concrete step by the Vietnamese government towards recognizing microfinance as a financial service for the poor.

The Microfinance Decree will allow Vietnamese MFIs to accept voluntary savings, which is a crucial aspect in the sustainability and financial viability of MFIs. Since the decree does not use the term “borrower” in conjunction with acceptance of savings, it implies that MFIs with this license can accept non-borrower deposits as well. However, there are restrictions, whereby a cap is set on the maximum amount that an individual can deposit with the MFI.

The minimum capital requirement for MFIs accepting voluntary savings will be VND 5 billion (US$ 320,000), and for those not accepting savings will be VND 500 million (US$ 32,000).

Under this decree, even non-profit organizations can apply for the license to accept savings, but the implications for this are still unclear. Whether these organizations currently under tax exemption due to their non-profit status will be able to maintain that status, and how their operating surpluses will be treated under the decree, still remains debatable.

As the details of this decree are still being ironed out, the State Bank of Vietnam will be holding a series of workshops to inform practitioners and get their feedback on the feasibility of this proposal in the Vietnamese microfinance sector. The upcoming Microfinance Conference organized by CEP Fund, a Grameen Trust partner, on June 6-8, 2005 in Ho Chi Minh City, will provide such a platform for the State Bank to address some of the issues regarding the decree.

In the end, Vietnamese MFIs, especially CEP, hope that this new development in the country’s microfinance sector will give the industry a more concrete shape, recognizing that poverty alleviation must be the key to further economic development, and microfinance is a key tool in this process.

Professor Muhammad Yunus attended the International Microcredit Conference held in Luxembourg on March 10, 2005. Organized by the Association Luxembourgeoise des Fonds d’Investissements (ALFI) and KPMG, the conference was graced by the Grande-Duchesse Maria Teresa of Luxembourg, along with Jean-Louis Schultz, Minister of Cooperation, with Professor Yunus as the guest of honor. Later, Professor Yunus gave a press conference, where he reiterated the cause of microcredit in alleviating poverty, and called on the investment funds of the country to back microfinance as a “profitable venture”. The Luxembourg press hailed microcredit as one of the most important innovations of the 20 th century in combating poverty. The Grande-Duchesse Maria Teresa first met Professor Yunus during her two visits in Bangladesh in 1998 and 2003, as a Goodwill Ambassador for the UNESCO.

The 49 th Grameen International Dialogue Program was held between March 13 and 24, 2005, in Dhaka. This Dialogue was a special one as it was jointly organized by Grameen Bank, Grameen Trust, and the Commonwealth Secretariat. It was the 6 th such Grameen-Commonwealth Poverty Dialogue, which took place at Grameen Bank (GB) Head Office and various GB Branches around the country. Grameen Trust has collaborated closely with the Commonwealth Secretariat since 1998 in organizing these joint Dialogue programs.

The Dialogue saw an interesting mélange of participants hailing from far corners of the world, e.g. Ghana, Kenya, Malaysia, Mauritius, Mexico, Pakistan, Seychelles, Sierra Leone, Thailand, Tonga, and Uganda. The 16 participants represented government organizations, ministries, development banks, and potential Grameen replicators. They were all interested in either implementing or supporting microcredit through their organizations or government policies. Since many of the participants have been involved in microcredit policymaking in their countries, but have not seen how the Grameen system works practically, the program gave them a chance to compare and contrast their own experiences at home with that of Grameen at the field level.

Participants spent most of their time in the various branches of GB. They experienced how the Grameen system works step by step by observing center meetings, group formation, loan supervision, accounting methods, and management information systems. They also had a better grasp of the Grameen Generalized System (GGS), and examined different products such as the Loan Insurance Scheme, Grameen Pension Fund, Struggling Member Program, etc. There was a chance for them to interact with the Grameen members directly, by visiting their homes, their businesses, and hearing their ‘inspirational’ stories of fighting against poverty with micro-loans. Furthermore, they had an opportunity to interview the Grameen field staff, including Zonal Managers, Branch Managers and Center Managers.

On their return from field visits, the participants engaged in intensive discussions with senior staff of Grameen Bank to fully understand the mechanics of Grameen microcredit, as well as sharing their field experiences. As a final part of their exercise, the participants proposed action plans on how to implement or support microcredit programs once they return home, given the information they have gathered during their stay in Bangladesh.

Grameen Trust and Grameen Bank offer training programs on Grameen Bank-II, known as Grameen Generalized System in Bangladesh. The training program covers the innovations introduced by Grameen Bank in recent past with rewarding results.

Organizations interested to participate in the training program, please contact for details:

Managing Director
Grameen Trust
Grameen Bank Bhaban
Mirpur-2
Dhaka 1216, Bangladesh
Phone/Fax: 880-2-8016319
E-mail: gt_repli@grameen.com