USAID

Tomorrow a representative from USAID will come to the university for a meeting about the student loans scheme. As we have had an overwhelmingly positive response from the students about access to loans, I hope that the meeting will get the ball rolling towards a successful outcome.

The model that is being proposed is a risk sharing model, which means the university has to underwrite part of the risk. I am concerned about this part.

The US government underwrites 50% of the portfolio, and the bank is relatively unexposed. The rationale here is that a local bank can't afford to have a big loss and risk destabilizing their image with their clients.

Our survey and general conversations I've had with students suggest that most consumer lending is done informally, through family or friends. not through banks. However, the younger more educated Vietnamese are beginning to demand these products.