Poor people lack access to mobile banking

Statistics from the World Bank showed that only 8% of adults in Vietnam use mobile phones to access their bank accounts compared to 40% in China, 33% in Malaysia and 17% in Thailand. In addition, many poor people in Vietnam have not accessed mobile banking services.

Speaking at the workshop on mobile banking for the poor and women held in Hanoi last week, Pham Xuan Hoe, Deputy Director of the Banking Strategy Institute under the State Bank of Vietnam, said poor people faced two big difficulties in accessing and using financial products and services.

“Firstly, the financial channels for people in remote and mountainous areas have been limited. In addition, products and services of financial institutions including banks have not been simple and suitable for them,” Hoe said.

Kieu Kỵ village in Hanoi’s Gia Lam district has 39 households borrowing loans under the Vietnam Bank for Social Policies (VBSP) credit programmes.  Most of them are women using the loans to invest in gold-laminating craft and leather making.

The households regularly get updates on the loans, such as payment deadlines and term deposits through texts on their mobiles. No one faces overdue debt thanks to the mobile banking service, despite the total outstanding loans of VND1.5 billion (US$64,937).

Vu Thi Thanh Huyen from Kieu Ky village said the households received texts relating to the loans regularly thanks to VBSP’s mobile banking project. Banks did not have to meet them to remind them about their debts.

Luu Thi Thao, deputy director of VBSP’s Centre for Information and Technology, said the bank would continue to pilot mobile banking services with more than 30,000 borrowers to help poor people access their services.

“With more than 130 million mobile phone subscribers nationwide, the use of VBSP’s mobile banking would contribute to complete the national overall financial strategy. The central bank is building the strategy and will submit it to the Government for approval by the end of this year,” Thao said.

She also said the strategy would provide favourable conditions for adults and businesses to access and use financial products and services conveniently at a reasonable cost.

The State Bank of Vietnam is building a national overall financial strategy which values digital technologies of banks and credit institutions. The ultimate target is to popularise access and use of financial products and services, especially to poor people.

“SMS services would be one effective tool to help poor households get acquainted with digital technologies. It would also help banks diversify their products and service,” Thao added.

She said the SMS service had affected customers’ awareness and responsibility in debt payment and saving accounts.

According to the VBSP, the SMS service provided to its 856,608 customers in 10 localities helps them save more than VND42.8 billion. The service costs the bank VND250 per SMS, thus reducing their operation costs by 12 times.

The bank has provided SMS through mobile phones to its customers in 63 cities and provinces nationwide since 2016. It has sent more than 6.9 million SMSs to customers.

The workshop was under the cooperation of VBSP, Mastercard and the Asian Foundation with supports from the Australian government to increase access to a full range of financial services for low-income households, especially women-led micro-enterprises.