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ADB supports financial access for women-owned businesses in Vietnam

Thursday, 13/06/2024 | 14:16:16 [GMT +7] A  A

The Asian Development Bank (ADB) and Lien Viet Post Joint Stock Commercial Bank (LPBank) on June 12 signed a financing package of up to 80 million USD to expand access to finance for a women-owned small and medium-sized enterprises (WSMEs) project in Vietnam.

Illustrative image. Access to commercial finance is a challenge, particularly for women borrowers (Photo: baochinhphu.vn)

The financing comprises a 30 million USD loan from ADB’s ordinary capital resources and 50 million USD syndicated parallel loans, with 30 million USD from the Export–Import Bank of China (CEXIM), and international cooperation and 20 million USD from the ILX Fund, an Amsterdam-based asset manager focused on supporting the Sustainable Development Goals in emerging markets. ADB acted as the mandated lead arranger and bookrunner for the entire financing.

ADB Director General for Private Sector Operations Suzanne Gaboury said by providing access to finance and tailored advisory services, its partnership with LPBank will empower women entrepreneurs in Vietnam to thrive and contribute to the country’s economic growth.

She went on to say that by working with development partners like the Export–Import Bank of China, ILX, and We-Fi, they aim to mobilise capital for private sector development that makes a meaningful difference to women-owned businesses in Vietnam.

SMEs account for 40% of Vietnam’s gross domestic product and half of all employment. Access to commercial finance is a challenge, particularly for women borrowers who often face constraints such as lack of collateral, low financial literacy, higher risk perception by banks, and limited awareness among banks of the potential of the women’s market.

The financial package will help LPBank design new products and procedures to enhance its support to WSMEs. A 750,000 USD performance-based grant funded by We-Fi will incentivise LPBank to expand its services to female borrowers and implement advisory support services for WSMEs.

LPBank Vice Chairman Le Minh Tam said that supporting SME customers in accessing capital is always an important strategy that LPBank prioritises.

With this loan package, LPBank not only has more potential in providing effective financial solutions for customers but also shows the efforts in supporting the WSME, especially where they are in great need of capital to recover from the pandemic and to further to develop their business, he added.

Source: Nhan Dan