ADB provides $300 Million Loan to BIDV to Support SMEs in Viet Nam

Attending the ceremony were Deputy Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV), Mr. Phan Duc Tu – Chairman of the BIDV’s Board of Directors, Mr. Eric Sidgwick – ADB Country Director for Vietnam, Mr. Nguyen Van Than - President of Vietnam Association of Small and Medium Enterprises (VINASME) and other representatives from the SBV, the BIDV and the ADB. On the side of the lending banks participating in the syndicated loan component, there were the representatives from the KEB Hana Bank, the CTBC Bank, Shin Kong Bank, Taipei Fubon Bank…

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

SBV Deputy Governor Nguyen Thi Hong delivers a speech at the ceremony

In her speech at the signing ceremony, SBV Deputy Governor Nguyen Thi Hong congratulated the signing of the loan agreement. At the same time, she called for stronger cooperation between the ADB, the BIDV and other commercial banks in order to find new, more in-depth and effective cooperation opportunities. This is the ADB's largest lending project to a commercial bank in 2018 for the entire Asian region. This is also the first time that the ADB has implemented a limit and provided medium and long-term fiduciary loans to a Vietnamese commercial bank without the Government’s guarantee. The loan will be used to help the SMEs in Vietnam pursue the goal of environmentally sustainable development, contributing to the economic development and poverty reduction.

Mr. Phan Duc Tu, Chairman of BIDV’s Board of Directors, speaks at the ceremony

According to the Chairman of the BIDV’s Board of Directors, this facility confirms the positive evaluation of the international development financing institutions toward Vietnam's economic stability and development; the confidence in the banking and finance operations in Vietnam in general and in the BIDV in particular. “The facility will support the SMEs in Viet Nam and it also reaffirms our partnership with the ADB in achieving poverty reduction, economic growth, regional integration, and environmental protection,” said Mr. Phan Duc Tu. “The loan symbolizes the long-term cooperation between the ADB and the BIDV for sustainable development in Viet Nam.”

“The ADB’s partnership with the BIDV, the largest lender to the country’s SME sector, will boost the lending to the businesses, which often find it challenging to gain access to finance,” said the Director General of the ADB’s Private Sector Operations Department. “The BIDV’s effort to make the SME lending a key strategic priority is aligned with the ongoing endeavors by the ADB and the Government of Viet Nam to improve accessibility to finance for the SMEs, thereby contributing to inclusive economic growth.”

SMEs account for most of Viet Nam’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 for their expansion. The loan demonstrates the ADB’s ability to catalyze long-term lendings from commercial institutions to channel investments in order to bring about a momentum for development.

VA