Women business owners during a networking session at the WECREATE VIETNAM Centre in Ha Noi. — Photo phunuvietnam.vn
International Finance Corporation (IFC) announced on Tuesday a successful syndicated senior loan package transfer of US$110 million to An Binh Commercial Joint Stock Bank (ABBANK) as a joint effort to boost the latter’s small and medium enterprises (SMEs) lending.
The loan is the first phase of a $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.
Tuesday’s statement from ABBANK indicated its aim to triple outstanding SME portfolio and quadruple lending to women-owned SMEs, which are expected to go beyond $1 billion by 2021.
IFC disclosed that out of the total $150 million financing package, it would contribute $40 million from its own account, $70 million from Industrial and Commercial Bank of China Limited (ICBC), Bangkok Bank Public Company Limited and Maybank International Ltd and $40 million from two other international lenders to be decided by 2018.
At least $45 million will be exclusively allocated to women-owned SMEs, Kyle Kelhofer, IFC country manager for Viet Nam, Cambodia and Lao PDR, 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.
ABBANK confirmed it would make use of the said much-needed syndicated funding from IFC and partner banks.
Long-term funding for SMEs is going to become critical in Viet Nam, as SMEs account for more than 98 per cent of the country’s businesses and 50 per cent of employment, according to IFC’s research.
However, IFC also found that only 30 per cent of registered SMEs have access to formal financial services, which is even more difficult for women-owned SMEs, with an estimated credit gap of $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 per cent equity stake in 2013. — VNS