Tinh Thuong One-member Limited Liability Microfinance Institution (TYM) has pioneered the implementation of an integrated Customer Credit Rating Tool on its mobile application.
This tool is an output of the AgriCRF VN Project (with technical support from GIZ), aiming to enhance the effectiveness of credit appraisal. It serves as a strategic solution enabling TYM to assess customers in an objective and transparent manner, shorten approval timelines, and expand safe and rapid access to capital for rural areas.
Collaborative Platform and Digital Transformation
In recent years, the operations of the banking sector and credit institutions have continuously improved to better meet customer needs and economic development trends. To support smallholder farmers and microenterprises in gaining better access to microfinance, the development of an integrated credit rating tool within operational systems has become an urgent requirement. This tool enables credit institutions, including microfinance organizations, to efficiently assess borrowers and make timely lending decisions, ensuring that clients can access credit quickly and conveniently to meet their production and business needs.
Recognizing the importance of digital transformation in agricultural and rural credit, the German Agency for International Cooperation (GIZ), in collaboration with the Department of Cooperatives and Rural Development (Ministry of Agriculture and Environment), supported TYM in developing a customer credit rating tool. This initiative is part of the program “Agricultural Climate Risk Financing Initiative for Vietnam” (AgriCRF VN), funded by non-refundable Official Development Assistance (ODA) from the Government of the Federal Republic of Germany. TYM is the first microfinance institution in Vietnam to apply this credit scoring tool.
Accordingly, the tool has been integrated into the TYM Mobile application, providing a more convenient and secure experience for both TYM staff and borrowers, while enabling more objective, transparent, and effective customer assessments. The project provided technical assistance through expert consultants who worked closely with TYM to review existing systems, identify gaps, and develop a credit rating tool that meets both TYM’s internal operational needs and regulatory requirements, particularly those of the State Bank of Vietnam.
Pilot Results and Operational Effectiveness
The credit scoring tool was piloted at two branches—Nam Truc–Nam Dinh (now Ninh Binh) and Do Luong (Nghe An)—and applied to 100% of borrowers with loan amounts of VND 40 million or above. The pilot phase was conducted from November 4 to December 31, 2024.
Following the pilot, TYM and the consulting unit jointly evaluated and confirmed the tool’s suitability under real operational conditions. The application of the credit scoring tool has enhanced TYM’s customer assessment capacity, increased objectivity in lending decisions, and strengthened proactive risk prevention. The tool supports credit officers in gaining a clearer understanding of each customer’s profile and making more accurate decisions, thereby improving portfolio quality, reducing non-performing loans, and enhancing overall risk management efficiency.
Beyond scoring functionality, the tool represents an important step in TYM’s transition toward a data-driven credit management model—a core foundation for strengthening competitiveness and expanding access to domestic and international funding sources. The criteria are designed to be simple, practical, and aligned with the operational capacity of branch-level credit officers. Customer creditworthiness is quantified and classified into four risk levels (high, medium, low, and very low), closely aligned with prevailing quantitative customer classification standards.
Commenting on the effectiveness of the tool, Mr. Phung Dinh Kien, Deputy General Director of TYM, stated:
“The application of the credit scoring tool has enhanced TYM’s capacity to assess customers, increased objectivity in lending decisions, and enabled proactive risk prevention. The tool provides a solid basis for accurate decision-making, contributing to improved credit portfolio quality, reduced non-performing loans, and strengthened comprehensive risk management. Its scientific foundation and standardized criteria help TYM systematize customer assessment and rating prior to lending decisions, moving toward credit provision that is scientific, transparent, and sustainable.”
The tool is built on a balanced set of criteria, including:
- General customer information: Age, education level, housing conditions, permanent residence, and the borrower’s and household’s reputation within the community (e.g., professional, business, and local neighborhood credibility).
- Repayment capacity: Assessed through the borrower’s credit relationship with TYM over the past 12 months, the ratio of net income to monthly repayment obligations, and repayment sources.
- Production and business activities (if applicable): Evaluation of products, markets, business registration, and the ratio of own capital to total capital requirements.
The credit rating tool delivers clear strategic benefits in risk management, including reducing the risk of incorrect customer selection, maintaining credit quality throughout the loan lifecycle, and enabling early detection of credit risks to determine appropriate provisioning levels. Digital data integration also helps reduce workloads and facilitates information storage for subsequent loan cycles.
TYM’s internal credit rating system uses a scorecard to assess customer safety during the loan appraisal process. Customers scoring from 90 to below 100 (AAA rating) are considered very low-risk; safety levels gradually decrease across AA and A ratings. Scores ranging from 70 to below 75 (BBB) and from 65 to below 70 (BB) are considered medium risk, requiring branches to exercise greater caution when assessing eligibility.
For loan applications or credit limits scoring 65 points or above, branches base their decisions on credit rating results, lending regulations, and other appraisal factors to approve loans or credit limits. Applications scoring below 65 points (ratings B, CCC, D, etc.) are identified as high to very high risk and may not be approved in accordance with TYM’s regulations.
Scaling Up and a Vision for Comprehensive Digitalization
Based on pilot outcomes, GIZ collaborated with TYM to organize Training of Trainers (TOT) courses on the credit rating tool, equipping key staff from the Head Office and 22 branches across 13 provinces within TYM’s network. The success of the pilot provides a solid foundation for system-wide rollout, with TOT participants expected to serve as core trainers supporting branch-level implementation from early 2025.
As of October 31, 2025, more than 50,000 TYM customers have accessed microfinance loans for production, business, services, and consumption, with a maximum loan size of VND 100 million per customer. Pilot programs and training activities have laid a critical foundation for TYM’s comprehensive digital transformation.
In the coming period, TYM plans to further enhance its mobile application with advanced loan management and online consultation functions, while fully integrating the credit scoring system into its digital platform to enable more automated and transparent customer assessments. The organization will also expand digital skills training for staff and clients, empowering rural communities to access financial services more proactively, and strengthen international cooperation to enhance technological capacity and risk management in microfinance operations.
The achieved results affirm TYM’s commitment to leveraging technology as a practical tool in microfinance, contributing to expanded access to safe, transparent, and sustainable financial services for poor women and vulnerable groups—fully aligned with the mission TYM has pursued for more than three decades.
Experience from pioneering countries such as India and Kenya clearly demonstrates that Digital Credit Scoring is a key driver in the global digital transformation of microfinance models. These tools are not merely technological upgrades but also bridges that accelerate appraisal processes, enhance transparency in lending decisions, and objectively reduce risks. TYM’s successful application confirms this as a strategic solution, particularly well-suited to Vietnam’s context, where rapid and secure access to capital is essential for rural areas and small-scale producers. By leveraging data and algorithms, digital credit scoring tools help microfinance institutions overcome traditional paper-based credit constraints, better serving poor women and vulnerable groups, ensuring timely and accurate capital allocation, supporting livelihoods, and advancing financial inclusion and sustainable development.
Source: Nguoiduatin.vn