Operational self-sustainability and outreach of microfinance institutions in Hanoi city

Abstract

Operational self-sustainability and outreach of microfinance institutions are closely related in the way that they supplement each other. Operational self-sustainability facilitates the institution’s outreach and in its turn outreach contributes to assure the institution’s sustainability. This paper analyzes the operational self-sustainability and outreach of microfinance institutions in Hanoi city. 

In this paper microfinance institutions is defined as “credit institutions that provide some banking services to meet demand of low-income individuals, households and micro-enterprises” (according to Vietnam’s Law on Credit Institutions, 2010, Article 4, Clause 5). Up to August 2015, in Hanoi city there are two microfinance institutions which are licensed by the State Bank of Vietnam and registered with Hanoi Department of Planning and Investment according to Vietnam’s Company Law, namely M7 Microfinance Institution, Ltd. (abbreviated as M7-MFI) and Tinh Thuong One-Member Microfinance Institution, Ltd. (abbreviated as TYM).