Press Releases

VP Bank officer discussing with a female entrepreneur
VP Bank's female client

On October 20, the Japan International Cooperation Agency (JICA) signed a $75 million loan agreement with the Vietnam Prosperity Joint Stock Commercial Bank (VP Bank) to fund micro, small and medium-sized enterprises (MSMEs) through Private Sector Investment and Finance (PSIF). The loan is in line with the “Initiative on Overseas Loan and Investment for ASEAN” (*1) announced by the Government of Japan in 2019, and is implemented by utilizing the “Facility for Accelerating Financial Inclusion in Asia: FAIA” (*2). In addition, the loan is co-financed with the Sumitomo Mitsui Banking Corporation (SMBC), and is JICA’s first PSIF project in Vietnam co-financed with a Japanese private financial institution after PSIF was relaunched in 2012.

VP Bank, a commercial bank in Vietnam established in 1993, has been engaged for many years in improving financial access for small enterprises as one of the intermediary financial institutions in the Japanese ODA loan Small and Medium-Sized Enterprises Finance Project (III) (approved in 2009). These focus on financing to MSMEs, consumers and the retail sector as their main business segments, with more than 100,000 MSME customers in Vietnam. In recent years, the bank has been highly evaluated for actively developing products and financial services to reach out to women-owned micro, small and medium-sized enterprise (WMSME) clients. In addition, JICA has been supporting the enhancement of women’s financial access in Vietnam through the technical cooperation Project for Promoting Gender-Responsive Financial Inclusion through Vietnam Women's Union (*3) since 2019, and VP Bank has been providing management diagnostic tools for female enterprises and WMSMEs as a partner organization in the project.

MSMEs play a crucial role in the Vietnamese economy, accounting for 98.7 percent of the total number of enterprises, more than 45 percent of the gross domestic product, and more than 63 percent of employment. However, their access to finance is limited; especially, very few WMSMEs are able to finance their businesses.

In accordance with the initiative of the “2X Challenge: Financing for Women (*4), JICA provides more than 30 percent of the total loan amount for enterprises in which women play an active and management role through VP Bank. Likewise, the loan from JICA will help VP Bank expand lending to MSMEs including WMSMEs, and will contribute to Vietnam’s sustainable economic growth. This project contributes to Goals 5, 8, 9, and 17 of the SDGs (Sustainable Development Goals). In September 2021, JICA issued a gender bond (*5) to raise funds in order to promote gender-related activities. The funds raised by gender bonds will be used for projects that contribute to gender equality and women’s empowerment, and the disbursement to VP Bank is made with the source of funds.

Vietnam has a special day called “Women’s Day” twice a year: “World Women’s Day” (Mar. 8), and the “Vietnam Women’s Day” (Oct. 20). The latter is regarded as an important day in Vietnam to praise women’s empowerment and show gratitude and respect to women. The loan is expected to promote further women’s social success in Vietnam by improving financial access for female entrepreneurs.

On March 30, 2021, JICA and SMBC launched the SMBC-JICA Sustainable Finance (*6) Framework which aims at improving borrowers’ sustainable businesses and the above-mentioned loan agreement is the first project under this framework in Vietnam. The framework will utilize JICA’s experience as a development finance institution to identify development challenges, project monitoring, and project impact evaluation. This framework will adopt the common impact evaluation and monitoring majors for the co-finance project, and share and manage the results mutually. With such elements in the framework, it will align internationally recognized guidelines and principles to target the achievements of SDGs(*7)and receive the third party review of the framework to confirm its alignment. Through the framework, JICA will further collaborate with SMBC, mobilize more private funds for developing countries, and contribute to the socio-economic development of developing economies.


(*1) Initiative on Overseas loan and Investment for ASEAN:
This is an initiative launched by the Government of Japan with the prime minister’s statement at the 22nd Japan-ASEAN Summit in November 2019, which focuses on the field of financial inclusion in the ASEAN and Asian regions, including Vietnam. The Government of Japan has committed to doubling JICA’s investment and financing in the fields of high-quality infrastructure, financial access, women’s empowerment, and green investment in the ASEAN region by mobilizing private investments.
(*2) Facility for Accelerating Financial Inclusion in Asia: FAIA
This is a facility launched as one of the pillars of the “Initiative on overseas loans and investments for ASEAN,” aligning with the philosophy, “improve financial access in the ASEAN region and provide loans with regional financial institutions for the purpose of empowering women, low-income people, and MSMEs.”
(*3) Project for Promoting Gender-Responsive Financial Inclusion through Vietnam Women's Union
The project aims at promoting the development and provision of both financial and non-financial services that meet the needs of poor and low-income (BOP: Base of the Pyramid) women through the capacity building of the Vietnam Women’s Union and financial services providers to enhance gender-responsive financial inclusion.
(*4) 2X Challenge: Financing for Women
This is an initiative adopted by various multilateral and bilateral development financial institutions, including JICA, at the G7 in June 2018. It has set out to mobilize $3 billion by 2020 for projects that contribute to women’s economic empowerment. In order to further expand this initiative, in 2021 a new goal to mobilize $15 billion over the two years 2021-2022 was set. “2X” represents the goal of doubling both the amount and effectiveness of investments in women.
(*5) Gender bond:
Bonds issued in September 2021 to address gender issues that have been recognized for their significant importance in the wake of the COVID-19 crisis. The funds raised by gender bonds will be used for JICA projects that contribute to gender equality and women’s empowerment.
(*6) Sustainable Finance
This refers to the utilization of financial services integrating environmental, social, and governance (ESG) considerations into the investment decisions, leading to sustainable economic and social resolutions.
(*7)Guidelines and principles to target the achievements of SDGs
Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines of the International Capital Market Association and Green Loan Principles and Sustainability Linked Loan Principles of the Loan Market Association.

• (*1) Initiative on overseas loans and investments for ASEAN
• (*2) Facility for Accelerating Financial Inclusion in Asia: FAIA
• (*4) 2X Challenge: Financing for Women 2021
• (*5) Gender bond