The Asian Development Bank (ADB) [ATB:AU] and Vietnam Prosperity Joint Stock Commercial Bank (VPB) signed a loan package of up to USD500m to expand access to finance for women-owned small and medium-sized enterprises (WSMEs) and social loan projects in Vietnam, as reported by Deal Street Asia on November 11. According to the package, VPB will design new products and procedures to advance its support to WSMEs. Social loans will be offered to eligible projects that address social issues or achieve positive outcomes, such as healthcare products and services, educational infrastructure facilities, and affordable housing. The package includes a USD100m loan from the ADB’s ordinary capital resources that will be dedicated to WSME financing, a USD300m syndicated parallel loan provided by Sumitomo Mitsui Banking Corporation (SMBC) [8316:JP], Australia and New Zealand Banking Group (ANZ) [ANZ:AU], and Maybank Securities [MAY:MK], as well as a USD100m facility co-financed by SMBC and Japan International Cooperation Agency (JICA).
Small and medium-sized enterprises (SMEs) contribute 40% of Vietnam’s GDP and half of all employment. However, obtaining commercial finance can be challenging especially for women borrowers who lack collateral and financial literacy. Moreover, they are often perceived as high-risk borrowers by banks, which have limited awareness of the potential of the women’s market. A 2017 study showed that only 37% of WSMEs were able to receive loans from banks. According to VPB, the new financial package will give SMEs, WSMEs, and eligible social loan projects access to relatively low-cost capital.