The first phase of an up to $150 million financing package, the funding package will help expand lending to small and medium enterprises (SMEs), especially women-owned businesses, increase access to climate finance, and boost international trade opportunities.
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 per cent of its total SME portfolio by 2024.
Meanwhile, 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 per cent 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.
She stated that given the pandemic, IFC’s timely investment also allows them to extend support to more businesses at a critical time, while contributing to the stability of Vietnam’s overall financial market.
IFC will provide technical support to help SeABank expand its loan portfolio for WSMEs, scale up its climate-finance business, and strengthen its environmental, social and governance (ESG) practices.
Further, the bank will develop a banking on women strategy to help bridge the $4.9 billion financing gap for WSMEs, which accounts for more than one fifth of the SME financing gap in Vietnam.
In addition, the bank will support green building and energy efficiency projects, which can help reduce GHG emissions. Developing an integrated ESG framework – aligned with IFC requirements – will boost the bank’s capacity to assess and manage environmental and social risks, contributing to its sustainable growth and expanding its green banking portfolio.
“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 after the COVID-19 pandemic,” stated he.
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.