15:38 | 13/12/2018 Economy
The Asian Development Bank (ADB) and the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) on December 12 signed a 300-million-USD loan agreement to support the growth and productivity of small- and medium-sized enterprises (SMEs) in Vietnam.
|ADB and BIDV on December 12 signed a 300-million-USD loan agreement to support the growth and productivity of SMEs in Vietnam - Source: VNA|
The facility is comprised of a senior unsecured A loan of 200 million USD provided by ADB and a B loan of 100 million USD provided by 12 commercial lenders, divided into a three-year tranche and a five-year tranche.
General Director of ADB’s Department of Private Sector Operations Michael Barrow said that ADB’s partnering with BIDV – the largest lender to the country’s SME sector – will boost lending to smaller businesses, who often find it challenging to gain financial access.
BIDV’s efforts to make SME lending a key strategic priority is aligned with ongoing endeavours by ADB and the Vietnamese Government to improve access to finance for SMEs, thereby contributing to inclusive economic growth, he added.
The facility will support SMEs in Vietnam and also reaffirm BIDV’s partnership with ADB in achieving poverty reduction, economic growth, regional integration, and environmental protection, said Chairman of BIDV’s Board of Directors Phan Duc Tu.
He affirmed that the loan symbolises the long-term cooperation between ADB and BIDV for sustainable development in Vietnam.
SMEs account for most of Vietnam’s businesses, contributing around half of total employment and 40 percent of gross domestic product. Despite their significant contributions to the economy, SMEs still encounter numerous obstacles that inhibit their economic potential, including lack of access to the finance needed to expand.
In recent years, BIDV has increasingly served the SME segment with positive results. As of the end of June 2018, BIDV had 250,000 SME customers, almost 40 percent of all SME customers in Vietnam. Its lending portfolio to SMEs reached over 240 trillion VND (approximately 10.4 billion USD), giving it the largest share of SME lending among the banks nationwide.
The loan will make ADB the first development finance institution to provide long-term lending to BIDV. ADB will work with BIDV to maximise the positive social and environmental impacts of the assistance by implementing an environmental and social management system.
Digital finance will be promoted through the introduction of new digital products to reach financially underserved populations in rural areas, including SMEs owned by women.