Hanoi (VNA) - Vietnamhas significant room to promote inclusive finance, given 70 percent  of its population is living in rural areas andmany are locked out of the conventional banking system due to low income,experts have said.

However, there werechallenges in making banking products and financial services available to thelow-income population, especially those living in remote areas, such as poorinfrastructure system and preference for cash.

According to Le PhuongLan, deputy director of the Banking Strategy Institute, inclusive finance aimedat ensuring banking products and financial services provided by officialfinancial institutions were accessible to all segments of the population atreasonable cost, which was critical to reduce poverty and accelerate thecountry’s economic growth.

A number of programes hadbeen implemented to promote inclusive finance, such as projects to developcashless payment, micro-finance system development, improving access to bankingservices, and credit support policies for agricultural businesses, small andmedium enterprises, students and poor households, Lan said.

Vietnam is in urgent needfor inclusive finance as the demand for capital was increasing and thenon-performing loan ratio at micro-financial institutions and social policybanks was much lower than other places, experts said.

Facts, however, showedthat access to banking and finance services was still limited in rural andremote areas.

Statistics by the centralbank revealed that the percentage of adults with accounts at official financialinstitutions increased from 21.3 percent  in 2012 to 30.9 percent  in 2014, still low in comparison with countriessuch as China with 78 percent  andThailand with 79 percent.

Vo Viet Hung, director ofthe central bank’s Monetary and Financial Stabilisation Department, saidmanagement agencies should develop inclusive finance in line with financialstability.

This would require thecooperation of relevant organistions and the application of high technologiesto ensure convenience and safety of residents and businesses, Hung said.

Interest rates were notalways at the lowest level, Hung said, adding that international experienceshad shown that the rates should be competitive to ensure healthy competitionamong financial institutions.

Phan Cu Nhan of the VietnamBank for Social Policies’ International Integration Department said it wascritical to provide training about how to use capital effectively along withpromoting inclusive finance in Vietnam.

Nhan added that bankingproducts should be diversified to meet the abundant demand of low-incomeearners, together with the application of high technologies, such as mobilebanking, to improve access.

The State Bank of Vietnamwas in charge of developing a national strategy on financial inclusion.-VNA