The Asian Development Bank (ADB) has approved a financing package of up to $80 million for Vietnam-based Lien Viet Post Joint Stock Commercial Bank (LPBank) to support the bank’s expansion of access to finance for a women-owned small and medium-sized enterprises (WSMEs) project.
The financing comprises a $30 million loan from ADB’s ordinary capital resources and $50 million syndicated parallel loans including $30 million from the Export-Import Bank of China, and $20 million from the ILX Fund, an Amsterdam-based asset manager focused on supporting the Sustainable Development Goals in emerging markets.
“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,” said ADB Director General for Private Sector Operations Suzanne Gaboury.
“Working with development partners like the Export-Import Bank of China, ILX, and We-Fi, we aim to mobilise capital for private sector development that makes a meaningful difference to women-owned businesses in Vietnam,” she added.
SMEs account for 40% of Vietnam’s gross domestic product and half of all employment. Access to commercial finance is a challenge, particularly for women borrowers who often face constraints such as lack of collateral, low financial literacy, higher risk perception by banks, and limited awareness among banks of the potential of the women’s market.
The financial package will help LPBank design new products and procedures to enhance its support to WSMEs. A $750,000 performance-based grant funded by We-Fi will incentivize LPBank to expand its services to female borrowers and implement advisory support services for WSMEs.
LPBank has the largest physical network among privately owned Vietnamese banks, with a nationwide network of 566 bank branches and transaction offices, as well as access to 513 postal transaction offices. This extensive network allows LPBank to reach customers in rural areas where other banks have limited presence.
In Vietnam last year, ADB provided a $13.8 million loan to GreenYellow Smart Solutions Vietnam Co. Ltd (GreenYellow) to support its rooftop photovoltaic solar system projects.
Earlier, the international lender had also agreed to provide an equity investment of up to $15 million to Vietnam-based Australis Holdings, Inc. (AHI) for its Climate-Smart Barramundi and Seaweed Aquaculture project.