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Vietnamese SMEs to get support from USD300 million loan
  • | dtinews.vn | December 12, 2018 06:59 PM

The Asian Development Bank (ADB) and Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), the country’s largest commercial bank by assets, on Wednesday signed a USD300 million loan agreement to support the growth and productivity of local small and medium-sized enterprises (SMEs).



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The facility is comprised of a senior unsecured A loan of USD200 million provided by ADB and a B loan of USD100 million provided by 12 commercial lenders and divided into a three-year tranche and a five-year tranche.

The agreement was signed by Director General of ADB’s Private Sector Operations Department, Michael Barrow and BIDV’s Senior Executive Vice President in charge of the Board of Management, Le Ngoc Lam at a ceremony in Hanoi.


Speaking at the ceremony, director General of ADB’s Private Sector Operations Department, Michael Barrow said that ADB’s partnering with BIDV, the largest lender to the country’s SME sector, will boost lending to businesses, which often find it challenging to gain access to finance.

“BIDV’s effort to make SME lending a key strategic priority is aligned with ongoing endeavors by ADB and the Government of Vietnam to improve access to finance for SMEs, thereby contributing to inclusive economic growth,” he said.


“The facility will support SMEs in Vietnam and also reaffirms our 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. “The loan symbolizes 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% of gross domestic product. Despite their significant contribution to the economy, SMEs still encounter numerous obstacles that inhibit their economic potential, including lack of access to finance needed to expand.

In recent years, BIDV has increasingly served the SME segment with positive results. As of 30 June 2018, BIDV had 250,000 SME customers—almost 40% of total SME customers in Vietnam. Its lending portfolio to SMEs reached over 240 trillion Vietnam dong (VND) (approximately USD10.4 billion), giving it the largest share of SME lending among the country’s banks.

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.

Founded in 1957, BIDV is the largest commercial bank in Vietnam by total assets. As of November 2018, the bank’s total assets reached over VND1.25 quadrillion (equivalent to USD55 billion) with a network of over 1,000 branches and transaction offices in Vietnam and worldwide. For the three consecutive years since 2016, BIDV has been the only bank in Vietnam to be honored with the award of “ADB’s Leading Partner Bank in Vietnam”. It has also been awarded “Best SME Bank Vietnam 2018” by Global Banking and Finance Review (UK), “SME Bank of the Year” by Asian Banking & Finance (Singapore), and “Best SME Bank Vietnam 2018” by Alpha Southeast Asia.

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