Decision No. 149/QD-TTg 2020 approving the national financial inclusion strategy through 2025

DECISION

Approving the national financial inclusion strategy through 2025, with orientations toward 2030^[1]

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THEPRIME MINISTER

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institutions, and the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

At the proposal of the Governor of the State Bank of Vietnam in Document No.105/TTr-NHNN of October 25, 2019,

DECIDES:

Article 1.To approve the national financial inclusion strategy through 2025, with orientations toward 2030 (belowreferred to as the Strategy) with the following contents:

I. VIEWPOINTS

1. To implement the financial inclusion with the participation and close coordination of the state sector and private sector, in which the State plays the role of creating a favorable environment for promoting the market-oriented financial inclusion in line with undertakings and policies of the Party and the State.

2. To promote the financial inclusion in couple with assurance of safety, efficiency and sustainability of the entire financial system, thus protecting financial consumers.

3. To apply modern technologies and promote innovation as important factors for promoting the financial inclusion.

4. To attach importance to security and confidentiality; to fully manage and monitor risks related to the provision of financial products and services, particularly digital financial products.

5. To learn from international experiences in applying breakthrough solutions to promote the financial inclusion in order to accelerate the achievement of financial inclusion targets in Vietnam.

II. DEFINITION, SCOPE, OBJECTS AND OBJECTIVES

1.Definition, scope and objects

a/ Definition

Financial inclusion means convenient access to and use of financial products and services, which are provided in a responsible and sustainable manner, by all people and enterprises in conformity with their demands and at reasonable costs, paying greater attention to the poor, low-income earners, disadvantaged people, small- and medium-sized enterprises, and micro-enterprises.

b/ Scope

The Strategy aims to universalize basic financial products and services provided by licensed institutions, including payment, money transfer, savings, credit and insurance.

c/ Objects

The Strategy’s objects are all people and enterprises, with special attention paid to groups of target objects being people who have no or little access to financial products and services such as people living in rural, deep-lying or remote areas; the poor, low-income earners, women and other disadvantaged people; small- and medium-sized enterprises, micro-enterprises, cooperatives, and production and business households.

2.General objectives

All people and enterprises will be entitled to safe and convenient access to and use of financial products and services, which are provided in a responsible and sustainable manner by licensed institutions, in conformity with their demands and at reasonable costs.

3.Specific objectives

a/ To diversely develop providers and distribution channels of financial products and services of licensed institutions in order to improve ability of persons who have no or little access to financial products and services to access and use such products and services;

b/ To step up the application of digital technology and intensify innovation in designing and distributing financial products and services toward simplicity, convenience, easy use and lower costs, to meet demands and suit payment capability of all people and enterprises, particularly small- and medium-sized enterprises, rural, deep-lying and far-flung inhabitants, low-income earners, and disadvantaged people;

c/ To establish a legal framework to promote equal competition, encourage innovation, and facilitate development of diverse financial product and service providers and distribution channels;

d/ To complete appropriate financial infrastructure, create favorable and safe conditions for transactions, and ensure smooth information exchange among all market stakeholders;

dd/ To develop the system of microfinance institutions, programs and projects with safe, efficient and sustainable operation, turning toward serving the poor, low-income earners, women, and micro-enterprises with diverse, flexible and appropriate financial products and services, thus contributing to the realization of the Party’s and the State’s policies on assurance of social security and sustainable poverty reduction;

e/ To improve financial knowledge of people and enterprises, ensuring that all of them will have appropriate knowledge, skills, attitude and conduct in the selection and use of financial products and services. To formulate a mechanism for protection of financial consumers in order to ensure that they are provided with adequate information and fairly treated.

4.Targets to be achieved by 2025

To strive for the following targets by the end of 2025:

-At least 80% of adults will have transaction accounts at banks or other licensed institutions; then every adult will have at least one transaction account at banks or other licensed institutions by 2030;

-There will be at least 20 branches or transaction bureaus of commercial banks per 100,000 adults;

-At least 50% of total communes will have financial service points (branches, transaction bureaus of credit institutions and bank agents, except financial service points of the Vietnam Bank for Social Policies);

-At least 25%-30% of total adults will have savings deposits at credit institutions;

-Cashless payment transactions will reach an annual growth rate of 20%-25%;

-At least 250,000 small- and medium-sized enterprises will have a debit balance at credit institutions;

-Credit loans for agricultural and rural development will account for 25% of total credit loans for the whole economy;

-Average proportion of insurance premiums to GDP will be 3.5%.

-At least 70% of adults will have information about their credit history in the credit information system of the State Bank of Vietnam.

III. MAJOR TASKS AND SOLUTIONS

1.To complete the legal framework so as to create a favorable environment for the achievement of financial inclusion objectives

a/ To study and promulgate regulations on bank agents, thereby permitting banks to assign non-bank entities to act as their agents to provide a number of banking products and services entrusted by banks for commissions;

b/ To study and promulgate regulations on transaction accounts with reasonable charge rates in order to create favorable conditions for, and encourage, every citizen to open accounts for cashless payment transactions;

c/ To review and revise existing legal documents or issue new ones on the identification of customers and authentication of their personal identities at different degrees suitable to the nature and risk level of each type of products or services and each group of customers; to permit the application of electronic Know Your Customer (e-KYC) with regard to the opening of accounts at licensed institutions to serve small payments of individuals and enterprises;

d/ To review and revise existing legal documents or issue new ones on e-money and e-money accounts as pre-paid payment instruments for use in cashless payment modes such as pre-paid cards, e-wallets, etc;

dd/ To review and revise existing legal documents or issue new ones on provision of financial products and services, particularly those based on the application of digital technology in order to create a stable, adequate and timely legal framework for financial product and service providers;

e/ To review and revise existing legal documents or issue new ones to faciliate the mobilization of social resources and encourage the participation of various economic sectors in microfinance activities; to build and develop the system of microfinance institutions, programs and projects with safe and efficient operation, and expand access of the poor, low-income earners, women and micro-enterprises to financial services;

g/ To review and revise existing legal documents or issue new ones on inspection and supervision in order to ensure the safe, efficient and lawful application of financial inclusion;

h/ To study and promulgate a mechanism for management of controlled experimentation for financial technology activities in the banking field;

i/ To study and promulgate mechanisms and policies to encourage the development of micro-insurance products for the poor and low-income earners;

k/ To study and promulgate regulations on approach, exploitation and use of the national database on population, permit financial service providers to use information from the national database on population to serve the e-KYC;

l/ To study and promulgate regulations on e-KYC based on the exploitation of the national database on population.

2.To develop diverse providers and distribution channels to support citizens and enterprises in accessing and using basic financial products and services with convenience and at reasonable costs

a/ To turn toward the development of bank agency models in order to expand the scope of provision of banking services to inhabitants in regions where no or few banking services are available

-To study and incrementally carry out bank agency activities; banks satisfying the prescribed conditions may open service provision points via agents in areas with low density of branches or transaction bureaus of credit institutions;

-To study and create conditions for non-bank institutions to develop their networks or operation spheres in rural, deep-lying and remote areas (such as people’s credit funds, microfinance institutions, post offices, filling stations, networks of telecommunications institutions and non-bank institutions, etc.) into bank agents so as to quickly expand the scope of financial service points.

b/ To develop modern distribution channels, based on the application of digital technology, aiming to expand the scope of financial product and service provision at low costs, especially via smart phones

-To step up the payment via mobile devices, and strongly develop digital banking and financial products and services for people in rural, deep-lying and remote areas;

-To encourage and create conditions for financial technology institutions and telecommunications institutions to actively participate in the financial product and service provision chains on the basis of cooperation and fair competition with credit institutions;

-To encourage credit institutions to cooperate with financial technology institutions and payment intermediate institutions in developing new low-cost payment technological solutions that are easy to use, convenient and safe, and suitable to personal payment transactions.

c/ To expand the coverage of service provision points of credit institutions in rural, deep-lying and remote areas, creating favorable conditions for people in these areas to access financial products and services

-To encourage credit institutions to develop networks of branches and transaction bureaus in rural, deep-lying and remote regions;

-To continue reorganizing and rationally developing ATM and POS networks nationwide, ensuring efficiency and better meeting market demands; to encourage banks and other institutions to invest in and expand ATM and POS networks to rural, deep-lying and remote areas.

d/ To efficiently use the public postal network for provision of basic financial services

To encourage the development of basic financial services provided via the public postal network; to create conditions for the public postal network to cooperate with financial service providers and financial technology institutions in developing digital financial services at low costs to serve people in rural, deep-lying and remote areas;

dd/ To develop the system of microfinance institutions, programs and projects with safe and efficient operation, and extend access to financial services to the poor, low-income earners, women and micro-enterprises

-To encourage microfinance institutions, programs and projects to develop diverse products and services for the poor, low-income earners, women and micro-enterprises; to promote the development of models of joint operation between commercial banks and microfinance institutions, programs and projects; to promote cooperation between microfinance institutions, programs and projects and financial technology institutions with a view to enhancing the application of technologies for provision of simple, convenient and low-cost services to people in rural, deep-lying and remote areas;

-To assist microfinance institutions, programs and projects in accessing preferential capital sources; to intensify the mobilization of all social resources for contributing financial resources for provision of microfinance products and services;

-To encourage microfinance institutions, programs and projects to participate in the intensification of financial education;

-To create conditions for and encourage socio-political organizations, local administrations and non-governmental organizations to actively participate in, and support development of, microfinance activities.

e/ To enhance capacity of special financial institutions with oriented operations in conformity with financial inclusion objectives, including Vietnam Bank for Agriculture and Rural Development, Vietnam Bank for Social Policies, Cooperative Bank, and people’s credit funds, in line with the Strategy for development of Vietnam’s banking sector through 2025, with orientations toward 2030, approved by the Prime Minister under Decision No. 986/QD-TTg of August 8, 2018.

3.To develop diverse basic financial products and services directed toward target objects of the financial inclusion

a/ To promote cashless payment in economy, creating conditions for target objects of financial inclusion to access and use cashless payment services

-To encourage banks to provide payment accounts not subject to account maintenance charge and minimum balance requirement, with limited functions and connection with ATM cards for pensioners, social allowance beneficiaries, the aged, the poor, pupils, students and other eligible disadvantaged people for use of services of money deposit, money withdrawal, small-value money transfer, receipt of pensions or social allowances and payment for convenient service bills;

-To intensify cashless payment of state budget expenditures and state budget-originating amounts to persons enjoying salaries, allowances or subsidies, and goods and service providers;

-To intensify application of various cashless payment modes in the collection and payment of individuals’ and enterprises’ taxes, charges, fees, administrative fines, and payment of periodical bills (electricity, water and telecommunications charges, school fees);

-To intensify cashless payment of pensions and social insurance allowances via the banking system;

-To encourage credit institutions and other licensed institutions to develop payment and money transfer services easy to use and suitable to conditions in rural, deep-lying and remote areas;

-To encourage enterprises to pay wages to their employees and pay for goods and service bills via their bank accounts.

b/ To promote the development of financial products and services for agricultural and rural production and business activities

-To assist credit institutions in raising efficiency of loans provided in support of domestic agricultural production and farm produce sale through application of high technologies and value chain-based linkages in agricultural production;

-To develop insurance products in agricultural production;

-To develop consumer loan products suitable to borrowers with reasonable interest rates, contributing to inhibiting “black credit” practices;

-To assist credit institutions in improving their capability for risk management, product design and business development in order to reinforce financial resources and human resources to serve the restructuring and transformation of agricultural areas, attaching importance to diversification of agricultural producers’ incomes.

c/ To promote the development of financial products and services for small- and medium-sized enterprises, cooperatives, production and business households

-To further study and improve the current credit guarantee mechanism with a view to increasing efficiency of credit guarantee activities;

-To develop forms of lending by trust or mortgage of commodities, land-attached assets, movables and cash flow;

-To encourage credit institutions to expand the provision of loans not requiring asset mortgage with forms of loan management suitable to particular characteristics of operation of small- and medium-sized enterprises, cooperatives, and production and business households;

-To encourage non-bank credit institutions, people’s credit funds, microfinance institutions and insurance enterprises to provide products and services suitable to different needs of small- and medium-sized enterprises, cooperatives, and production and business households;

-To raise operational efficiency of non-state budget financial funds providing loans and credit guarantee.

4.To complete and improve use efficiency of financial infrastructure facilities, facilitating the reduction of transaction charges, meeting the requirement of promoting financial inclusion

a/ To complete payment infrastructure facilities

-To step up the building and completion of the automated clearing house (ACH) system for its early commencement of operation to serve payments by individuals and enterprises at any time (24/7);

-To study and formulate a mechanism for operations of financial switching and electronic clearing toward permitting more institutions and enterprises that fully satisfy law-prescribed conditions to provide services in order to improve competition and ensure security and safety of such operations, raise processing efficiency, and reduce payment and money transfer transaction charges for people and enterprises;

-To study and promulgate technical standards in order to enhance inter-connection among credit institutions, between credit institutions and financial technology institutions as well as other service providers in order to serve electronic payment transactions;

-To enhance assurance of security and safety in e-banking activities in order to win the public’s trust and protect financial consumers.

b/ To build the national database on population

-To connect and share the national database on population with other specialized databases;

-To adopt a policy on attachment of citizen identification codes to all personal accounts to serve the management and certification of information on customers and beneficiaries upon provision of products and services;

-To intensify information connection and sharing among agencies and institutions with a view to stepping up the administrative reform and development of an
e-government.

c/ To build the national financial inclusion database based on the set of statistical indicators on degree of access, use and quality of financial services; to incorporate basic financial inclusion norms in programs on survey of people’s living standards; to carry out social surveys of people’s access to financial services.

d/ To build a unified, adequate and high-quality national credit information database on the platform of modern technologies; to fully integrate information from credit institutions in the banking sector, incrementally expanding information sources from institutions outside the banking sector; to promptly provide diverse products and services suitable to each type of credit institutions.

5.Financial education, improvement of financial capability and knowledge; protection of financial consumers

a/ To devise and implement overall measures to improve financial management knowledge and skills as well as people’s and enterprises’ understanding of financial products and services, thereby raising capability to use, evaluate benefits and risks of financial products and services provided by licensed institutions so that people and enterprises can wisely select products and services suitable to their needs.

-To incorporate financial education contents in national general education curricula;

-To formulate and implement programs to provide information for people to clearly understand benefits, costs and risks together with methods of effective management and efficient use of financial products and services; at the same time, to publicize the complaint and dispute settlement process to all service users;

-To step up communications programs on education and dissemination of financial knowledge to all people and enterprises;

-To improve financial skills, particularly in risk management, insurance, financial leasing, etc., of agricultural producers;

-To raise accounting and financial management capability of cooperatives;

-To enhance the role of socio-political organizations in mobilizing their members to participate in financial education.

b/ To build the legal framework for protection of financial consumers

-To study and promulgate regulations on protection of financial consumers, clearly defining the mechanism to protect financial consumers from unfair treatment by financial service providers; to set out requirements on disclosure of information by financial service providers; to use transparent ways of approaching and effectively settling disputes between financial service providers and financial consumers;

-To apply a transparent structure of charges and service charges payable by financial consumers;

-To enhance the role of credit institutions as responsible lenders, laying stress on providing more financial knowledge to borrowers, particularly the right to access and protect credit information, complaint settlement mechanism and correction of information errors.

c/ To develop the Deposit Insurance of Vietnam in line with the Strategy for development of Vietnam’s banking sector through 2025, with orientations toward 2030, approved by the Prime Minister under Decision No.986/QD-TTg of August 8, 2018.

6.Other supporting solutions

a/ To incorporate financial inclusion objectives in programs on building the new-style countryside;

b/ To formulate and implement programs on training of human resources at management agencies and financial service providers for promotion of financial inclusion in Vietnam;

c/ To intensify cooperation on financial inclusion with foreign countries and international development organizations in the promotion of financial inclusion in Vietnam;

d/ To step up the dissemination of information about the role and significance of financial inclusion among state management bodies, local administrations at all levels, socio-political organizations, financial service providers, citizens and enterprises.

dd/ To step up the restructuring of credit institutions under schemes and plans approved by competent authorities.

Article 2.Organization of implementation

1.To establish the National Steering Committee to direct the implementation of the Strategy; functions, tasks and working regulations of the National Steering Committee will be formulated by the State Bank of Vietnam in coordination with relevant agencies, and submitted to the Prime Minister for decision; the apparatus assisting the National Steering Committee will be situated at the State Bank of Vietnam, and the Governor of the State Bank of Vietnam shall organize the operation of such apparatus.

2.Assignment of responsibility to perform a number of major tasks

a/ Ministries, sectors, localities and relevant bodies shall, within the ambit of their respective functions and tasks, closely coordinate with the State Bank of Vietnam in:

-Finalizing within 6 months after the Strategy is approved their plans of action and then submitting them to the State Bank of Vietnam for summarization;

-Organizing the performance of their tasks assigned under their programs of action and tasks set forth in their plans of action, and sending annual reports on implementation results to the State Bank of Vietnam for summarization.

b/ The State Bank of Vietnam shall assume prime responsibility for, and coordinate with ministries, sectors, localities and relevant bodies in:

-Organizing, directing, urging and assessing the implementation of the Strategy and making sum-up reports on difficulties and problems, evaluating results of implementation of the Strategy on an annual basis;

-Organizing in 2025 the preliminary review of results of implementation of the Strategy, then proposing subsequent objectives and norms and addding or amending tasks and solutions (if necessary) for the subsequent period;

-Organizing in 2030 the final review of results of implementation of the Strategy.

c/ The Ministry of Planning and Investment shall:

-Coordinate with the State Bank of Vietnam and relevant agencies in incorporating financial inclusion objectives in the process of formulating and implementing five-year and annual plans on socio-economic development;

-Direct the General Statistics Office of Vietnam in closely coordinating with the State Bank of Vietnam in formulating and selecting appropriate financial inclusion indicators for incorporation in the program on people’s living standard survey;

-Coordinate with the State Bank of Vietnam in collecting and providing data on  access to credit and financial services through supply-demand surveys of enterprises and individuals;

-Assume the prime responsibility for summarization and allocation of annual development investment capital in accordance with the Law on Public Investment, Law on the State Budget and relevant guiding documents for implementation of the Strategy.

d/ The Ministry of Finance shall assume prime responsibility for summarization and allocation of annual regular expenditures in accordance with the Law on the State Budget and relevant guiding documents for implementation of the Strategy.

dd/ The Ministry of Information and Communications, Ministry of Education and Training, Vietnam Television Station and the Voice of Vietnam shall, within the ambit of their functions and tasks, disseminate information and educate, and improve public awareness about, financial inclusion and achievement of Vietnam’s financial inclusion objectives.

e/ The Ministry of Foreign Affairs shall:

-Coordinate with related ministries and sectors in monitoring the development of financial inclusion in the world and the region; inquire into financial inclusion development models, policies and experiences of foreign countries;

-Coordinate with the State Bank of Vietnam in intensifying Vietnam’s participation in international programs and forums on financial inclusion;

-Promote cooperation on financial inclusion with partners and at multilateral forums.

Article 3.This Decision takes effecton the date ofits signing.

Article 4.The Governor of the State Bank of Vietnam, ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of the provincial-level People’s Committees, chairpersons of Boards of Directors, and Directors General or Directors of financial service provision institutions shall implement this Decision.-

Prime Minister
NGUYEN XUAN PHUC