Switzerland to support Vietnamese banking sector
08 May 2023 11:06
The Asian Development Bank (ADB) and the State Secretariat for Economic Affairs (SECO) will jointly promote the provision of financial services in Vietnam. To this end, they have signed a co-financing agreement of up to 5 million US dollars. An additional 2 million US dollars will be made available from the Japanese government’s Japan Fund for Prosperous and Resilient Asia and the Pacific.
As detailed in a press release issued by ADB, the financial technology financed with these funds is intended to support the State Bank of Vietnam (SBV) in its efforts to strengthen the regulatory framework for digital finance, build the capacity of government and other industry stakeholders, and assist financial institutions in the development of digital banking services. The aim is to improve the low level of financial inclusion in Vietnam, especially among SMEs and small companies run by women.
According to information in the press release, nearly 80 percent of the Vietnamese population have no or insufficient access to banking services. The unmet financing requirement is estimated at around 21 billion US dollars. SMEs owned by women are impacted by this situation to an above-average extent. Training courses on fintech and best practices in green banking are intended to improve access to financing, with a target quota of 25 percent female participation also stipulated.
Moreover, according to Winfried Wicklein, ADB Director General for Southeast Asia, Vietnamese banks “rely heavily on collateral-based credit decisions”. This is a disadvantage for SMEs, which “typically have little or no collateral”. This technical assistance can help to “find solutions such as alternative credit scoring and introducing digital lending”, he adds. ce/mm