IFC’s lending package helps Vietnamese SMEs

The loan is the first phase of a US$150 million financing package from IFC and Goldman Sachs for ABBANK, with more than one third of the said funding intended for women-owned SMEs.

The December 19 statement from ABBANK indicated its aim to triple outstanding SME portfolio and quadruple lending to women-owned SMEs, which are expected to go beyond US$1 billion by 2021.

(Source: http://en.vietstock.vn)

IFC disclosed that out of the total US$150 million financing package, it would contribute US$40 million from its own account, US$70 million from Industrial and Commercial Bank of China Limited (ICBC), Bangkok Bank Public Company Limited and Maybank International Ltd and US$40 million from two other international lenders to be decided by 2018.

At least US$45 million will be exclusively allocated to women-owned SMEs, Kyle Kelhofer, IFC country manager for Vietnam, Cambodia and Laos, said.

“This project will promote women-owned SMEs as a viable business opportunity when provided with tailored products, appropriate offerings and right marketing. Subsequently, it will support the growth of women-owned SMEs, which will in turn create jobs and drive wage growth”, he added.

Long-term funding for SMEs is going to become critical in Vietnam, as SMEs account for more than 98% of the country’s businesses and 50% of employment, according to IFC’s research.

However, IFC also found that only 30% of registered SMEs have access to formal financial services, which is even more difficult for women-owned SMEs, with an estimated credit gap of US$1.2 billion per annum.

The loan scheme was launched in cooperation with the Goldman Sachs 10,000 Women initiative, a global finance facility since 2014 to enable access to capital to more women entrepreneurs.

IFC became ABBANK’s foreign investor with 10% equity stake in 2013.