On February 1-2, VMFWG, with support from the Citi Foundation, cooperated with IFC to organize a two-day workshop on Corporate Governance for MFIs in Vietnam.
Dozens of board members and senior executives of Vietnamese microfinance institutions are gathering together in the Mekong Delta’s Can Tho city to address common governance challenges they face. Globally, regulators and investors have been supporting company efforts to demonstrate better governance, such as having a robust board, accountable senior management, and effective internal control and risk management practices.
“The IFC believes supporting Vietnamese microfinance institutions in strengthening their corporate governance practices will boost their capacity to provide better financial services and expand lending,” said Mr. Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Laos. “This will ensure sustainable growth for the institutions and benefit their key clients – millions of micro-entrepreneurs, primarily women, and low-income households, contributing to poverty reduction in the country.”
Studies have shown that stronger governance enhances performance and risk management, which is expected to strengthen microfinance institutions’ ability to cater to the financial needs of microenterprises and low-income earners.
Only one in five adults in Vietnam have access to formal financial services and only 8 per cent of them have savings in formal institutions. Microfinance lenders play a critical role in providing financial services to the low-income population, serving an estimated 10 million people, many of whom are women and the poor, according to IFC studies.
The workshop will help participants examine their institutions’ key governance functions such as the board, compliance, and internal audit, and develop an action plan for improvements.
The workshop is being conducted by the IFC in partnership with the Citi Foundation and the Vietnam Microfinance Working Group, a leading industry forum for microfinance practitioners sharing knowledge and strengthening the sector’s voice in policymaking. More than 30 of its members are microfinance institutions offering financial services.
“Vietnam’s microfinance sector is evolving, with many small, non-profit operators hoping to transition into bigger, commercial-oriented entities,” said Ms. Nguyen Thi Tuyet Mai, Managing Director of the Vietnam Microfinance Working Group. “Implementing corporate governance reforms to enhance efficiency, transparency, and risk management will be paramount to their successful transitions.”
This initiative is part of the IFC’s Vietnam Microfinance Program, supported by Switzerland’s State Secretariat for Economic Affairs, with the aim of strengthening industry capacity and transparency as well as boosting microfinance institutions’ ability to increase sustainable and responsible financial access.
The IFC is a sister organization of the World Bank and member of the World Bank Group and is the largest global development institution focused on the private sector in emerging markets. It works with more than 2,000 businesses worldwide, using its capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY201717, it delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity.
Source: Vietnam Economic Times
Coverage of the event:
http://vneconomictimes.com/article/business/ifc-assisting-microfinance-institutions-improve-corporate-governance (Vietnam Economic Times)
http://www.vir.com.vn/ifc-initiative-boosts-corporate-governance-at-microfinance-lenders-56107.html (Vietnam Investment Review)
http://vietnamnews.vn/economy/422366/microfinance-lenders-urge-improvements-in-governance-for-lending.html#ekCY5SuXD3gsqZlC.97 (Vietnam News)