Hanoi (VNA) -🔥 The AsianDevelopment Bank (ADB) and the Government of Vietnam on December 22 signed a 5million USD grant agreement, funded by the Women Entrepreneurs Finance Initiative(We-Fi), to support Vietnamese women-led small and medium-sized enterprises(WSMEs) whose access to finance has been weakened because of COVID-19.

Andrew Jeffries, ADB Country Director forVietnam, said that although the country has managed the COVID-19 pandemic well,supply chain disruptions, economic downturns in export markets, and declines intourism have slowed the country’s economy. “To revive and sustain their businesses,support to access critical financing is essential for small- and medium-sizedenterprises (SMEs), especially WSMEs adversely affected by COVID-19,” he noted. Economic disruptions caused by COVID-19fall hardest on SMEs, which have very limited resources to manage economicshocks. In June 2020, the General Statistics Office(GSO) reported that nearly 30,000 Vietnamese businesses registered totemporarily suspend their operations, a 38 percent increase over the first halfof 2019. The grant will finance the COVID-19 Relieffor WSMEs Project, aiming to incentivise participating banks in Vietnam torestructure 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 areincentivised to proactively find eligible WSMEs. Five banks have volunteered to participatein the grant, including the Asia Commercial Bank, Bank for Investment andDevelopment of Vietnam, Saigon-Hanoi Bank, Tien Phong Bank, and VietnamProsperity Bank. The economic gains of the project arelikely to come from helping WSMEs to avoid bankruptcies, to preserveemployment, and to access credit at a time when banks are reducing lending. Theproject complements the Government’s financial inclusion strategy, approved inFebruary, which places special emphasis on both women and SMEs. We-Fi is governed by 14 foundingcontributing countries and managed by the World Bank. It aims to mobilise morethan 1 billion USD in commercial and international financial institutionfinance to improve the business environment for women-owned or led SMEs. In2019, ADB received 20.19 million USD from We-Fi to support WSMEs to accessfinancing and training in Vietnam and the Pacific./.