Women entrepreneurs in Vietnam get a fair shot with financing

The Women Entrepreneurs Opportunity Facility (WEOF) was launched by IFC’s Banking on Women program and Goldman Sachs’ 10,000 Women initiative in 2014, in response to the wide credit gap for women-owned enterprises.

IFC estimates that the unmet credit demand for SMEs owned by women in developing countries reaches $1.5 trillion. The goal was to make it easier for banks to lend to small businesses and women-owned SMEs.

This is especially important in Vietnam, where SMEs are vital to the economy. They comprise more than 98 percent of the businesses and are responsible for 50 percent of employment across the country.

However, one key segment of this market—women-owned SMEs—remains especially vulnerable. A recent IFC market study finds the financing gap at $1.19 billion for women-owned SMEs throughout Vietnam. Even though female entrepreneurs bring in an average annual revenue similar to men’s, women in Vietnam still receive fewer bank loans than their male counterparts.

This limits opportunities for women—and that’s where Vietnam Prosperity Commercial Joint Stock Bank (VPBank), saw a chance to make a difference. It was one of the first Vietnamese banks to adopt a strategy specifically designed for women-owned SMEs. Its partnership with IFC goes beyond funding; it includes advice from IFC to facilitate access to non-financial services for women-owned SMEs, making it possible for these entrepreneurs to share experiences with each other and find new networking opportunities for their businesses.

The program registered strong results within just a year of its launch, during which time VPBank lent $600 million to about 2,000 women entrepreneurs. This accounts for 25 percent of its total SME client roster. There were gains in other aspects of the business as well: for example, nearly 2,500 women opened saving accounts, valued at almost $180 million.

These outcomes have prompted IFC and WEOF to reach out to even more Vietnamese SMEs owned by women. Last year, following the partnership with VPBank, IFC and WEOF expanded funding for women-owned SMEs through a loan of $150 million to An Binh Commercial Joint Stock Bank.

On September 25th, 2018, international financial institutions and representatives of worldwide development agencies will meet for the Vietnam Economic Infrastructure Development Forum to discuss upcoming business opportunities in Vietnam. The event will take place at Hilton Hanoi Opera Hotel.

Original source: IFC
Published on 7 August 2018