The agreements were signed by Governor of the State Bank of Vietnam, Nguyen Thi Hong, and ADB Country Director for Vietnam, Andrew Jeffries.
Speaking at the signing ceremony, ADB Country Director for Vietnam, Andrew Jeffries said that although Vietnam had managed the COVID-19 pandemic well, supply chain disruptions, economic downturns in export markets, and declines in tourism had slowed the country’s economy.
Economic disruptions caused by COVID-19 fall hardest on SMEs, which have very limited resources to manage economic shocks. In June 2020, the General Statistics Office reported that nearly 30,000 Vietnamese businesses registered to temporarily suspend their operations, a 38% increase over the first half of 2019.
The grant will finance the COVID-19 Relief for Women-led Small and Medium-Sized Enterprises Project, aiming to incentivize participating banks in Vietnam to restructure existing loans or extend new loans to at least 500 WSMEs. 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 WSMEs. Five banks have volunteered to participate in the grant, including the Asia Commercial Bank, Bank for Investments 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 WSMEs to avoid bankruptcies, to preserve employment, and to access credit at a time when banks are reducing lending. The project complements the Government’s financial inclusion strategy, approved in February 2020, which places special emphasis on both women and SMEs.
