Enhancing access to finance for women-owned SMEs

The Roundtable Discussion was attended by Ms. Khuong Thanh Ha, Deputy Director General of the International Cooperation Department of the SBV; Mr. Donald Lambert, Principal Private Sector Development Specialist, the ADB’s Viet Nam Resident Mission; together with representatives of several relevant agencies, the SBV’s entities, international organizations, associations, commercial banks, and other experts.

Small and medium-sized enterprises (SMEs) in general and women-owned SMEs in particular play an important role in creating jobs and generating income for workers, reducing poverty, promoting economic growth. However, these customers have been facing a lot of difficulties and challenges, including lack of financial access.

Ms. Khuong Thanh Ha, Deputy Director General of the International Cooperation Department, speaks at the Roundtable Discussion.

In her opening speech, Ms. Khuong Thanh Ha, Deputy Director General of the International Cooperation Department, shared that, the private sector is an important driver of the economy, and a factor contributing positively to Vietnam's economic growth in the recent decades. In 2021, the private sector contributed 42-43% of the GDP, employed about 85% of the economy's workforce, playing a significant role in mobilizing the social resources for investment into production and business activities, helping to accelerate the economic growth and the economic restructuring, increasing the budget revenues, improving the people's lives, and ensuring the social security.

SMEs are an important part of the private sector and play an increasingly important role in the economic development. Over the past years, SMEs have experienced an extensive development in terms of scope of operations, and a diverse growth in terms of industries and fields. The number of SMEs has increased over the years, and SMEs are now operating in many industries and fields, meeting the needs for the development of the country.

With the advantages of low investment capital and abundant labor resources, SMEs provide the market with a wide variety of products in all sectors of the economy, creating many options and meeting all consumer needs, thereby boosting the consumption power of the economy. Moreover, SMEs exploit and promote the potentials and strengths of the local resources, contributing to the economic restructuring. With the flexibility and dynamism in their activities, SMEs can quickly adapt to new business conditions, especially when the economy experiences shocks from natural disasters and epidemics, such as the recent years, ensuring the resilience without having to reduce their workforce. Instead, SMEs can often attract a large number of workforces to come back when the economy enters a new recovery cycle.

Ms. Ha emphasized that the development of the private sector has contributed to women's empowerment through the increases in employment opportunities and career development. The trend of female leaderships in the private sector is becoming more common. The development of women-owned SMEs plays an important role in creating jobs, generating income, empowering women and ensuring gender equality.

Supporting women-owned SMEs is a practical requirement for Vietnam. Access to finance for women-owned SMEs is always a priority for those enterprises and the State management agencies. Besides the support finance from the local investment and development funds, the credit resources provided by commercial banks is also an important channel to support those SMEs.

The Roundtable Discussion was aimed to share a draft report of the ADB’s study on the financial access for women-owned SMEs in Vietnam, thereby receiving comments and feedbacks of the stakeholders to finalize the policy recommendations to the State management agencies. This was also an opportunity for the stakeholders to share the problems and difficulties regarding those SMEs’ access to finance.

Mr. Donald Lambert, Principal Private Sector Development Specialist of the ADB, speaks at the Roundtable Discussion.

On behalf of the ADB’s Viet Nam Resident Mission, Mr. Donald Lambert, Principal Private Sector Development Specialist, shared that, there are differences between women- and men-owned SMEs. The ADB’s study has shown that the percentage of loans provided to women-owned SMEs is much smaller than that provided to men-owned SMEs. Mr. Donald Lambert expressed his wishes that the report would make a good contribution, and can be used as a basis to consider and address the current gaps. The feedbacks of the participants in the Roundtable Discussion are expected to identify the solutions for closing the current gaps and bringing better values.

At the Roundtable Discussion, the participants also exchanged and discussed about potential policies to support women-owned SMEs to access credit resources from commercial banks; listened to an overview presentation on the ADB-supported project on “Promoting Transformative Gender Equality Agenda in Asia and the Pacific”, and the draft report of the ADB’s study on Access to Finance for Women-Owned SMEs, within the framework of the Women Accelerating Vibrant Enterprises in Southeast Asia and the Pacific (WAVES) program. The participants also discussed several key points and the relevant findings on financial accessibility of women-owned SMEs in Vietnam from the perspectives of both the supply and the demand sides; the challenges and policies to promote access to finance for women-owned SMEs; the implementation progress of the credit support programs for women-owned SMEs by the commercial banks (BIDV, TPBank); the international experience in enhancing financial access for women-owned SMEs; etc.

LK