Source: Socialist Republic of Vietnam
On behalf of the Vietnamese Government, Governor Nguyen Thi Hong of the State Bank of Vietnam signed the agreements with ADB Country Director for Vietnam Andrew Jeffries, signing on behalf of ADB.
The grant will finance the COVID-19 Relief for WSMEs Project, aiming to incentivise participating banks in Vietnam to restructure existing loans or extend new loans to at least 500 WSMEs.
Five banks have volunteered to participate in the grant, including the Asia Commercial Bank, the Bank for Investments and Development of Vietnam, Saigon-Hanoi Bank, Tien Phong Bank, and Vietnam Prosperity Bank.
“Although Vietnam has managed the COVID-19 pandemic well, supply chain disruptions, economic downturns in export markets, and declines in tourism have slowed the country’s economy,” said Andrew Jeffries, ADB Country Director for Vietnam.
“To revive and sustain their businesses, support in accessing critical financing is essential for SMEs, especially WSMEs adversely affected by COVID-19, he added.
Funds for the project will be disbursed on a first-come, first-served basis, so that the banks will be competing for the funds and are incentivised to proactively find eligible WSMEs.
The economic gains of the project are likely to come from helping WSMEs to avoid bankruptcy, preserve employment and access credit at a time when banks are reducing lending.
The project is also expected to complement the Government’s financial inclusion strategy, approved at the beginning of 2020, which places special emphasis on both women and SMEs.
We-Fi is governed by 14 founding contributing countries and managed by the World Bank. It aims to mobilise more than US$1 billion in commercial and international financial institution finance to improve the business environment for SMEs owned or led by women. In 2019, ADB received US$20.19 million from Wi-Fi to support WSMEs to access financing and training in Vietnam and Asia Pacific.