Norwegian development finance institution Norfund will invest $30 million in Vietnam-based Southeast Asia Commercial Bank (SeABank) through a convertible loan.
The loan can be converted into common shares of SeABank within a four-year term, the Vietnamese lender said in a statement.
The investment will provide additional capital to support SeABank’s retail banking customers and micro, small and medium enterprises (MSMEs) in Vietnam.
“Financial inclusion is Norfund’s core mandate and is aligned with SeABank’s strong commitment to finance and support retail banking customers and SMEs in Vietnam. The partnership will look to be a catalyst to help uplift the unbanked and underbanked in the country,” said Fay Chetnakarnkul, Regional Director (Asia) at Norfund.
Prior to the planned investment by Norfund, SeABank has raised funding totalling nearly $600 million from overseas organisations such as the International Finance Corporation and the US International Development Finance Corporation.
These investments were aimed at accelerating the bank’s sustainable development strategies focusing on enhancing SMEs’ financial access, ESG practice application, and climate change mitigation, it said.
In addition, SeABank looks at increasing disbursements for green credits and climate change mitigation projects as well as green mortgages for individual customers.
SeABank is among the smaller commercial banks in Vietnam, with $10.7 billion in total assets. It is listed on the Ho Chi Minh City Stock Exchange at a $2.3 billion market capitalisation.
Last year, the bank sold its microfinance unit, Post and Telecommunication Finance Company, to AEON Financial for about $175 million.
Before committing its investment to SeABank, Norfund has backed a spate of other private lenders in the country, including VPBank, Techcombank, Sacombank, and ABBank. The Norwegian investor is also a limited partner in growth equity funds managed by Vietnam Investment Group and Exelsior Capital Vietnam Partners.
Most recently, Norfund provided a loan to Mutual Trust Bank in Bangladesh. Its other active investments in the financial sector in Asia include Hattha Bank in Cambodia and Yoma Bank in Myanmar.