Day 3: Mobivi and VILAF
2016 International Study Trip, Vietnam
Today we headed to visit the offices of Mobivi and VILAF. It was our first experience in Ho Chi Minh City, where, according to our guide, eight million people live and approximately four million bikes are used for commuting. We got to taste first hand crossing the city’s busy streets.
Mobivi iCare Benefits
Mobivi iCare Benefits is a social enterprise that provides an employee benefit program that gives qualified workers access to purchase products and services over short-installment plans. Tam, director of iCare operations at Mobivi, believes in doing well by doing good. “Our business model is to run 0 percent installment plans paid over six months,” she said.
iCare Benefits serves segments where the markets have failed. Basic services like vaccinations and basic products like mobile phones and air conditioning units become accessible to workers who typically have salaries of $300-$400 a month. Personal loans in Vietnam are impractical and create a cycle of debt, as interests rates are between 70 and 100 percent.
iCare margins are between wholesale and the market price of the product or service. When a customer enters an agreement to purchase through iCare, iCare and their employer will set up salary deductions over a six- to 12-month installment plan. Salary deductions significantly reduce default risks, resulting in higher collection rates.The simple platform and business model is robust and brings basic products and necessities to people at the bottom of the economic pyramid. “We bring things like washing machines, cell phones, vaccines and a lot of other services,” said Tam. We look forward to seeing iCare Benefits expanding into other markets outside of Southeast Asia.”
Guest Blogger: Anthony Portillo, MBA candidate
Our meeting at Mobivi really got us thinking about the opportunities that emerging markets offer in the financial sector. Some quick financial calculations by my fellow MBA colleagues and I estimate the company’s annual revenue to be about $800 million, conservatively. They have since expanded into seven countries, with the possibility of expanding into many more.
I was excited at the thought of expanding this type of business into Latin America. I have been working partly in Latin America markets for the last few years and can see this benefiting millions in those countries. It is truly a model that does well by doing good.
As our meeting was ending, I got the chance to quickly connect with Tam and ask about their plans to expand. She made mention of their intentions to enter Peru in the next couple of years. I told her of my experience in those markets, and she asked that I send her a CV. I will follow up once back home and hopefully something comes from it.
VILAF: Vietnamese International Law Firm
Kevin Hawkins, partner at VILAF, was a social worker in the late 80s and early 90s who helped orphaned Vietnamese children in New York City. His involvement with immigration brought him to Vietnam to lead projects in education. Through these experiences, Kevin came back to the states to earn his law degree. He is now a lawyer practicing in Ho Chi Minh City and owns a yacht touring company.
Guest blogger: Carter Lear, MBA candidate
Another uncertainty for the consideration of FDI, the legal environment in Vietnam seems to either be in a state of repair or perpetual motion. Maybe it’s both, with each adjustment showing due cause for further refinement. Our host, Kevin Hawkins, brought this issue to the forefront of conversation as he addressed the many and frequent changes surrounding local business legalese.
A distribution of this challenge can be chalked up as circumnavigating the tides of policy—regulatory issues that layer difficulty in any county battling for economic advancement. That said, however, a larger part of the issue here was surrounding the notion of “equitizing” formerly state-owned businesses. A historically corrupt and communist state – gone emerging capitalist market. Thoughts of the legal workload alone cause anxiety. Yet such an exciting time to be a part of such historic change.
Each of these meetings confirms my thinking that this is still the beginning. These are opportunities that many have waited years to capitalize, Kevin’s case included.