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36 D+C Vol.42.2015:1 The supervising agency is the State Bank of Vietnam (SBV), the central bank. Its licensing department certainly has the best intentions and, thanks to ample tech- nical assistance from advanced nations, understands international practice. It is one thing to draft a law, however, and an- other to implement it. The SBV relies on more than 60 region- al offices throughout the country. Its local inspectors seem to be a bit out of their depth when dealing with MFIs. For in- stance, inspectors were surprised to dis- cover that TYM’s very basic branch offices use neither armoured cash transporters nor sophisticated software for real-time transaction tracking. These things are not needed, and they would drive up costs dis- proportionately in view of the small sums TYM typically handles. For obvious rea- sons, it does not make sense for a smaller MFI with some 10,000 clients or so to start to deal with issues of this kind. TYM, however, wants to grow. It appre- ciates that the regulations are meant to safeguard performance and protect the in- terests of poor clients. Requirements that look exaggerated today, moreover, may soon become appropriate. In an emerging economy like Vietnam, people’s financial needs are not only grow- ing – they are becoming more diverse too. Small MFIs are increasingly incapable of delivering the services required. Loans will certainly stay the major concern in the fu- ture, but credit products must become more varied and flexible. Financial inclusion is about more than credit, however. Today, only 25 % of the Vietnamese people have a bank account. People from rural areas who have found work in cities must be enabled to send money home to their villages. The govern- ment encourages non-cash transactions. The number of credit and debit cards and the ATM network are growing fast. The fi- nancial sector must become better at mo- bilising savings moreover. So far, most people withdraw money as soon as it is credited to their account. There is even more scope for progress. No serious attempt has been made so far to introduce mobile banking even though there are 1.3 mobile phones per person in Vietnam. The informal sector is huge, as 80 % of the work force are self-employed or work without contracts. Most farmers, construction workers and shop assistants, for example, do not have health insurance, life insurance or any kind of retirement scheme. Basically, the insurance business must yet emerge in Vietnam. To promote financial inclusion in a comprehensive sense, a variety of pro- viders will be needed. The government must play its role, in particular by encour- aging formal employment and building social security systems. It will also have to create more space for private initiatives. TYM is determined to be one of maybe half a dozen MFIs that will play an impor- tant role in the emerging modern financial sector. The vision is to double the number of clients by 2017 and provide them with a wide – and widening – array of adequate, demand-based financial and non-financial services. The owner-approved microfinance strategy foresees the option of creating a Women’s Savings Bank by 2020. TYM could achieve that goal if it managed to pro- vide services to only half of 15 million mem- bers of the VWU, its parent organisation. The greatest challenge is probably to develop staff capacity. Today, TYM staff are excellent community workers with reason- able credit skills. In the future, they will need to become financial advisers and cli- ent managers. Operations have already been computerised to a considerable ex- tent, but more needs to happen. Massive investments are needed. The MFI will have to be profitable, moreover, because it is not subsidised. As TYM grows bigger and more profes- sional, there will be concerns about “com- mercialisation” or “mission drift”. The management, however, will ensure that the institution stays in touch with the communities it serves. The long-term goal is to promote comprehensive financial in- clusion all over Vietnam. Duong Thi Ngoc Linh is the general director of the Vietnamese microfinance institution TYM. TYM is supported by KfW on behalf of Germany‘s federal government. Jörg Teumer is the representative of Sparkassen- stiftungfürinternationaleKooperation(Savings BanksFoundationforInternationalCooperation, SBFIC) in Vietnam and advises TYM. [email protected] Dembowski Construction workers have no social protection: ­painting a building in Hanoi.