To increase financing options for women-owned SMEs in Vietnam, ADB and LPBank signed $80 M loan package

A financing package worth up to $80 million has been signed by the Asian Development Bank (ADB) and Lien Viet Post Joint Stock Commercial Bank (LPBank) to increase financing options for a project involving women-owned small and medium-sized enterprises (WSMEs) in Vietnam.

ADB said in a statement on Wednesday that the financing is made up of a $30 million loan from its ordinary capital resources and $50 million in syndicated parallel loans. Of these, $30 million come from the Export–Import Bank of China, a state-owned bank tasked with advancing trade, investment, and international cooperation on behalf of the People’s Republic of China, and $20 million come from the ILX Fund, an asset manager with headquarters in Amsterdam that supports the Sustainable Development Goals in emerging markets.

For the duration of the financing, ADB served as the required lead arranger and bookrunner.

“By providing access to finance and tailored advisory services, our partnership with LPBank will empower women entrepreneurs in Vietnam to thrive and contribute to the country’s economic growth,

“Working with development partners like the Export–Import Bank of China, ILX, and We-Fi, we aim to mobilize capital for private sector development that makes a meaningful difference to women-owned businesses in Vietnam,” said ADB Director General for Private Sector Operations Suzanne Gaboury.

It has been reported that SMEs make up half of all jobs in Vietnam and 40% of the country’s GDP.

But getting commercial financing can be difficult, especially for women borrowers who frequently encounter obstacles like a lack of collateral, a lack of financial literacy, a bank’s heightened perception of risk, and a bank’s ignorance of the women’s market’s potential.

The funding package will assist LPBank in creating new policies and offerings to improve the assistance it provides to WSMEs.

We-Fi will provide a $750,000 performance-based grant to LPBank, which will encourage the bank to extend its services to women borrowers and introduce advisory support services for WSMEs.

“Supporting SME customers in accessing capital is always an important strategy that LPBank prioritizes,

“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,” said LPBank Vice-Chairman Le Minh Tam.