IFC Partners with Southeast Asia Commercial Joint Stock Bank to Increase Lending to Smaller Businesses and Women-Owned SMEs in Vietnam, Promote Climate Finance

The package will comprise up to $80 million from IFC’s own account and $50 million to be mobilized from international lenders, in addition to a $20 million trade finance line. While the investment aims to increase SeABank’s SME lending portfolio, at least $20 million will be earmarked for women-owned SMEs, with support from the Women Entrepreneurs Finance Initiative (We-Fi). With a strategy to expand its reach to women-owned and -led small and medium enterprises (WSMEs), IFC’s funding will help the bank triple its current WSME lending, accounting for about 25 percent of its total SME portfolio by 2024. 

Climate finance is a new area in Vietnam with a $753 billion climate investment opportunity between 2016 and 2030 as the country aims to reduce greenhouse-gas (GHG) emissions by 9 percent by 2030 to mitigate climate change impact. IFC is helping SeABank to support this country need with $30 million to be allocated for climate-friendly projects. Further, IFC’s support is expected to help SeABank build a $60 million climate-finance portfolio by 2024.

“IFC’s long-term financing and technical advice will enable SeABank to focus on two strategic segments—WSMEs and climate financing—and position itself as a bank of choice for women-owned businesses and climate-friendly projects over the next five years,” said Le Thu Thuy, General Director of SeABank. “Given the pandemic, IFC’s timely investment also allows us to extend support to more businesses at a critical time while contributing to the stability of Vietnam's overall financial market.” 

IFC will advise the bank to develop a banking on women strategy to help bridge the $4.9 billion financing gap of WSMEs, accounting for more than one fifth of the SME financing gap in Vietnam. The bank will further support green building and energy efficiency projects, which can help reduce greenhouse gas emissions.

“IFC’s new partnership with SeABank reaffirms IFC’s commitment to support the continued development of a strong financial sector in Vietnam” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Lao PDR. “Our investment in SeABank reiterates our confidence in the bank and its strategic direction to increase financing for SMEs and climate investments, furthering green and inclusive growth, and helping Vietnam build back better from the COVID pandemic.”

IFC’s $20 million trade guarantee line under its Global Trade Finance Program (GTFP) will boost SeABank’s capacity to provide financing for importers and exporters to minimize trade disruption given the ongoing pandemic. Participation in GTFP will enable SeABank to join a network of more than 500 bank partners in nearly 100 emerging-market countries.