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ADB provides US$5 million to support women-led SMEs in Vietnam
By Van Ly
Wednesday,  Dec 23, 2020,14:08 (GMT+7)

ADB provides US$5 million to support women-led SMEs in Vietnam

By Van Ly

Governor of the State Bank of Vietnam Nguyen Thi Hong (L) and ADB country director for Vietnam Andrew Jeffries pose for a photo after signing the agreement – PHOTO: COURTESY OF ADB

HANOI - The Asian Development Bank (ADB) and the Vietnamese Government on December 22 signed a US$5 million grant agreement to support Vietnamese women-led small- and medium-sized enterprises (SMEs) affected by the Covid-19 pandemic.

“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 to access critical financing is essential for small- and medium-sized enterprises, especially women-led SMEs adversely affected by Covid-19."

SMEs, which have very limited resources to manage economic shocks, have been hit hard by economic disruptions caused by the pandemic. In June 2020, the General Statistics Office reported that nearly 30,000 Vietnamese businesses registered to temporarily suspend their operations in the first half of 2020, a 38% increase compared with the same period last year.

The grant, funded by the Women Entrepreneurs' Finance Initiative, will finance the Covid-19 Relief for Women-led Small- and Medium-Sized Enterprises Project, aimed at incentivizing participating banks in Vietnam to restructure existing loans or extend new loans to at least 500 women-led SMEs.

Funds will be disbursed on a first-come, first-served basis, so that the banks will be competing for the funds and are incentivized to proactively find eligible women-led SMEs.

Five banks have volunteered to participate in the program, comprising the Asia Commercial Bank, Bank for Investment and Development of Vietnam, Saigon-Hanoi Bank, Tien Phong Bank and Vietnam Prosperity Bank.

The economic gains of the project are likely to come from helping women-led SMEs avoid bankruptcy, preserve employment and access credit at a time when banks are reducing lending.

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