International Finance Corp unveils US$150m package for Vietnam's SMEs, green projects, trade finance

THE International Finance Corp (IFC) is anchoring a US$150 million package to build Vietnam's financial market, with the lion's share for small businesses.

The first tranche of funding to Vietnam-based Southeast Asia Commercial Joint Stock Bank (SeABank) involves an IFC loan of US$40 million, under an agreement inked on June 25 and announced on Monday.

Some US$100 million of the package's US$130 million in medium-term funding will go towards small and medium-sized enterprises (SMEs), with at least US$20 million earmarked for businesses owned or led by women.

The goal is to triple SeABank's women-led SME lending to 25 per cent of the overall SME portfolio by 2024. World Bank-linked IFC said that it "will advise the bank to develop a banking on women strategy to help bridge the US$4.9 billion financing gap" for Vietnamese SMEs owned or led by women.

This support for women entrepreneurs ropes in the Women Entrepreneurs Finance Initiative, a financial intermediary fund hosted by the World Bank.

The remaining US$30 million of medium-term funding will go towards climate-friendly projects - such as green buildings and energy efficiency projects - to grow SeABank's climate-finance portfolio to US$60 million by 2024.

Le Thu Thuy, general director of SeABank, dubbed women-led businesses and climate financing as "two strategic segments" for the next five years.

Meanwhile, IFC is also extending a trade guarantee line of US$20 million as part of the package. The trade finance is aimed at easing disruption for importers and exporters in emerging markets during the Covid-19 pandemic.

Said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia and Laos, in a statement: "Our investment in SeABank reiterates our confidence in the bank and its strategic direction to increase financing for SMEs and climate investments, furthering green and inclusive growth, and helping Vietnam build back better from the Covid pandemic."