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The microfinance industry in Vietnam, particularly those sponsored by nongovernment organisations (NGOs), has experienced rapid expansion in recent years. Yet in spite of this growth, an analysis of their effectiveness has been lacking. In a bid to help address this shortcoming, this paper reports on a subset of data that was obtained during a survey and interview process that incorporated various stakeholders including financial donors, NGO-sponsored microfinance institutions (NMPs), village leaders and NMP members and non-members. Perceptions of NMPs effectiveness are discussed from the standpoint of various stakeholders. NMPs are found to be at a critical juncture. While their activities are widely perceived to contribute to poverty alleviation, their future viability is clouded by donor requirements that they become financially self-sufficient and at the same time certain government policies are making achieving this goal difficult.


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