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ATMs facing uphill battle in Vietnam

October 17, 2004

Taipei Times: In Vietnam, where the average annual salary is U.S. $450, a majority of Vietnamese do not have a bank account and have never seen an ATM. 

Government efforts to encourage a shift away from a cash-based economy to one with a modern banking system have come up against tradition and decades of mistrust about depositing wages in someone else's protection.

"It is simply our habit of using cash for transactions," said 54-year-old Tran Tien Hung, an employee of a state-owned company in Hanoi.

Only about 1.1 million of the communist nation's 81 million people have bank accounts, according to the State Bank of Vietnam. In 1998 there were only seven ATMs across the country. The number has grown to 500 ATMs catering to Vietnam's newly-minted as well as expatriates and tourists -- yet many middle-class Vietnamese have never used one, yet alone seen one.

"What is an ATM? I have never heard of such a thing," said Nguyen Nhu Vuong, a 47-year-old accountant at a state-owned media agency.

A recent draft government ordinance that would force Vietnamese companies to use the banking system for transactions of more than 10 million dong (U.S. $700) has triggered concern within the business community.

Businessmen say the ceiling is too low and that cash transactions are more convenient for themselves and for the recipients.

The World Bank, which is helping the government reform the banking system, says the cash economy fuels money laundering, while the government says change is needed to ensure the country's full integration into the world economy.

"Cashless transactions are essential to our efforts to become a part of the global economic community, particularly in our bid for WTO entry by the end of 2005," said a State Bank official who requested anonymity.

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And from our archives: ATM growth predicted in Vietnam, Vietnam's state-owned banks setting up ATM network and Vietnamese banks adding more ATMs