journey journey

Accelerating financial inclusion and ecosystem transformation through legacy modernization

Seamlessly integrates 692 branches; drives significant improvement in all of the banks key indicators

Client Overview

The Vietnam Bank for Social Policies was established on October 4th, 2002 by the Government's Decree to providecredit for the poor and other policy beneficiaries, based upon the re-organization of the Bank for the Poor and separation from Vietnam Bank for Agriculture & Rural Development for the purpose of detaching policy lending from commercial lending. VBSP is regarded as an efficient tool of the Government in mobilizing various resources domestically and internationally, to perform the designated socio-policy lending programs of the Government. The bank's motto is to develop, maintain and extend infrastructure and processes to maximize financial reach with limited resources.

VBSP is not for profit and implements policy lending to the poor and other policy beneficiaries. VBSP is a state-owned bank operating for the Vietnamese Government to fight poverty.

  • VBSP mobilized financial resources beyond government fundingfor policy lending from local investors, international financial institutions and other banks
  • Extended reach through 11,000 + Transaction Points (each covering 1 - 2 villages)
  • Loan coverage increased 16 times
  • Default rate dropped from 13.75% to 1.03%
  • Leveraged local authorities eco system for applicant screening and lifecycle monitoring.

Challenges

  • Existing distributed technology platform inhibits expansion
  • Reporting requires high levels of manual intervention, more so with a non-centralized system
  • Extensive and time consuming documentation for transactions at each Transaction Point
  • No visibility and increasing levels of fraud at a local level
  • Lack of connectivity directly impacting expansion efforts
  • Reach being achieved with great inefficiencies and at an unviable cost

Requirement

  • 100% coverage of borrowing needs for eligible poor households and policy beneficiaries
  • 10% annual growth of loans
  • Delinquency rate below 3% of outstanding loans
  • Simplification and standardization of professional procedures
  • Diversification of products and services
  • Modernization of operations and integration with global and regional banking systems
  • Improved operational efficiency, monitoring, analysis and risk management.

Product / Solution provided

The solution provided has catered for the vision the bank has set for itself. Full spectrum financial inclusion modules have been provided with head room for future innovation and expansion. Offline banking has been automated and streamlined making the field banking solutions efficient. The following are a few modules provided to the bank as part of Intellect Core Banking 9.X platform.

  • CASA
  • Offline Banking
  • Deposits
  • Cheque Clearing
  • Institutional Microfinance
  • SME loans
  • Payments
  • Collaterals

Business Impact

  • Roll out completed in record 18 Months time
  • Strengthening the customer relationship through offline application and seamless flow of offline-online transfer
  • Student stipend under Govt. scheme for social equality access to good education, also comes under Micro Finance
  • Fixed principal and varying interest throughout the loan lifecycle

VBSP is aggressively leveraging Intellect's expertise to maximize its social impact in Vietnam. The following statistics show the capabilities of the installed system:

  • 16.8 million accounts (Loan and CASA)
  • 7 million households
  • 11,232 Transaction Points (temporary mobile branches)
  • 3.2 million loans under Lending for the Poor Programme
  • 2.1 million loans to Students
  • 2 million loans for Water & Rural Sanitation
  • 200,000+ Savings & Credit Groups

Other Statistics:

  • 20,000 Online Transactions per day
  • 150,000 field agents
  • Over 1 million offline transactions per day
  • An average of 52 TPS.
  • EOD runtime of 4 hours
  • EOM runtime of 12 hours

Industry appreciation

Vietnam Bank for Social Policies (VBSP) has won a Celent Model Bank Award in the Legacy and Ecosystem Transformation category. The prestigious award was presented at a glittering ceremony at Celent's Innovation and Insights Day, held in New York.

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