VPBank (Vietnam Prosperity Joint Stock Company) is the country’s 10th largest bank in terms of assets and the 6th largest private bank, with a total balance sheet of USD 16.3bn at the end of 2019.
USD 35m from the credit line is earmarked to support the bank’s SME lending activity, a business segment that VPBank is specialized in. USD 15m will support the development of its loan portfolio with climate co-benefits, in a country where the environmental risk is growing at a fast rate.
The operation will have a positive impact on access to bank loans for SMEs in a context where there is a lack of financing for SMEs in the country. According to the International Finance Corporation, some 17% of the country’s SMEs have unmet financing needs, creating a financing gap of USD 21.7bn, equivalent to 11% of the country’s GDP. Based on the average loan amount for SMEs, we estimate that Proparco’s financing could allow about 350 more SMEs to benefit from a loan.
The project will also have positive impacts on increasing financing for the fight against climate change in Vietnam, where bank financing for the climate is still relatively low for a market where there are significant needs. In this respect, 30% of Proparco’s loan will be counted as climate-related, as the eligibility list of the Common Principles for Climate Mitigation/Adaptation Finance Tracking will be applied to our loan.
This information is given at the time of signature, without prejudice to any developments in the operation/project