Terms of Reference for the Microfinance Working Group (MFWG)

March 2004

Background The microfinance sector has developed significantly in Vietnam over the past years due to innovative models among microfinance practitioners and a steadily improving enabling environment from policy makers. NGOs in particular have been very innovative, with over 80 different schemes developed in Vietnam. However, the general efforts have remained scattered with little communication among practitioners to share ideas, strategies, and lessons learned. With few exceptions, most schemes still face issues of financial and institutional sustainability, professionalism, governance, and absence of consistent standards. This Working Group is created out of a desire among microfinance practitioners to learn from one another and come to consensus on general principles and guidelines in order to speak with a unified voice. It is established under the VUFO-NGO Resource Centre, according to the Working Group Guidelines approved by the Resource Centre Steering Committee in April 2003.

Goal To enhance the impact of microfinance on poverty alleviation by promoting quality and sustainability of microfinance in Vietnam both in practice of institutions and in an improved enabling environment.

Objectives Encourage policy dialog with relevant government, banking, and donor institutions and organizations in order to facilitate an improved enabling environment for microfinance in Vietnam. Promote adoption, adaptation, and use of current international standards of best practice in microfinance. Consolidate lessons and strategies of agencies involved in microfinance to agree on basic principles and guidelines of microfinance best practice in Vietnam. Identify and develop training and technical resources to be used in improving quality of microfinance programs, particularly in bookkeeping and accounting systems.

Strategies Policy dialogue: Provide opportunities for participants to learn about relevant Government policies and to share experiences with policymakers on issues, laws, and policies relating to microfinance. Information sharing: Exchange and consolidation of relevant information will be facilitated by monthly meetings, the MFWG e-mail list, commissioned publications, exchange visits, and other means as appropriate. Networking: Bringing together the combined networks of all the Working Group participants opens the door to vast information and resources both within Vietnam and internationally. Research. After identifying areas of common concern where sufficient information is not available, the group may jointly conduct or commission research in order to better inform program design. Capacity building: With consolidated strategies and practices, the Working Group will promote the best practice of microfinance and identify or create technical resources for building the capacity of programs in Vietnam.

Structure and Management Core Group: The Core Group streamlines objectives and finalizes the annual work plan to provide a focused direction for the Working Group. This gives continuity in the Working Group activities towards its objectives. Recommended number of organizations is 6, but no limit is imposed as long as the size remains small enough for effective group discussions. The Core Group is elected annually by the Working Group participants. Regular meetings quarterly and irregular meetings when necessary. The Core Group will elect the Chairperson and Secretary. Additionally, individual Core Group participants will coordinate specific tasks on a voluntary basis as the need arises. Chairperson: The Chairperson is elected annually by the Core Group. Fulfills general administrative and coordinating functions and acts as the official liaison to the VUFO-NGO Resource Center. Represent on behalf of the MFWG at official meetings/conferences. Drafts the MFWG annual plan submitted for Core group’s finalization. Secretary: The Secretary is elected annually by the Core Group. The Secretary takes minutes at meetings and ensures they are distributed in both English and Vietnamese afterwards. Circulates electronically any relevant communications and materials within the MFWG for learning and sharing purpose. Assists the Chairperson in administrative and coordinating duties.

Procedures Participation: Participation is open to all individuals, organizations, and agencies concerned with microfinance in Vietnam. Meetings: Meetings will take place monthly, or when the group feels they are necessary. Working language. Bilingual (English and Vietnamese). Decision making: Decisions will be taken on a consensual basis if agreed by all members present. Some decisions may be taken by majority vote. The Core Group may provide guidance. TOR revision: The core group will revise the TOR annually for any relevant changes. Funding: The Working Group will operate on a voluntary basis. There is no obligation by participants to contribute any funds. Funding will be raised when the group deems it necessary. Principles: The group will at all times strive to ensure participation, inclusion, transparency, and accountability.