The Asian Development Bank (ADB) and Vietnam Prosperity Joint Stock Commercial Bank (VPBank) signed a $500-million loan package (approximately VND12.5 trillion) dedicated to supporting women-owned small and medium-sized enterprises in Vietnam.
The loan package includes $100 million from ADB’s ordinary capital resources, a $300-million syndicated parallel loan from Sumitomo Mitsui Banking Corporation (SMBC), Australia and New Zealand Banking Group and Maybank Securities, and a $100-million facility co-financed by Japan International Cooperation Agency and SMBC, Deal Street Asia reported.
The financial package will support micro, small, and medium-sized enterprises and loan projects by Vietnamese women entrepreneurs. Projects such as the development of educational infrastructure, affordable housing, and healthcare services will be eligible for social loans.
“These funds will help VPBank promote our lending programs for SMEs, women-run SMEs, and other companies in the lines of healthcare, education, sanitation, transport, and social housing construction, by giving them access to relatively low-cost capital,” said VPBank CEO Nguyen Duc Vinh.
Women-owned enterprises account for 26.5% of active enterprises in Vietnam, making them an integral part of the economy. Most of these enterprises are small and micro-sized, but they grow at very high rates annually and provide thousands of employment opportunities. But while statistics show WSMEs’ capacity to grow further, they face various obstacles, including limited access to financial resources.
Research by the United Nations in Vietnam found that the existing barriers for women-owned SMEs to access support are mostly related to gender, such as business and family life balance, the lack of successors, and women's physical and biological activities (giving birth and household duties). Women-owned businesses received only 5% of total loans for small businesses in 2021.
VPBank has been proactively designing lending products specifically aimed at giving capital to women entrepreneurs. The bank has also partnered with Women Entrepreneurs Finance Initiative (We-Fi) to improve access to finance for underserved female borrowers.
A $750,000 performance-based grant will be funded by We-Fi to the bank to expand services and to undertake a first-of-its-kind randomized control trial study in Vietnam on financial inclusion for women-run SMEs.
“Banks have a vital role in mapping an inclusive and sustainable development path for Vietnam,” said ADB Director General for Southeast Asia Ramesh Subramaniam. “ADB’s support for VPBank will help to ensure that businesses who had struggled to obtain finance will be able to invest in their future growth and share in the country’s prosperity.”