ADB, Switzerland Sign US$5 Million Co-Financing Deal to Support Vietnamese Fintechsby Fintechnews Switzerland May 8, 2023
The Asian Development Bank (ADB) and Switzerland signed a co-financing agreement of up to US$5 million for Vietnamese fintechs focused on addressing financial inclusion in the country, particularly among small and medium-sized enterprises (SMEs).
This funding, along with a US$2 million contribution from the Japan Fund for Prosperous and Resilient Asia and the Pacific, financed by the Government of Japan, will support a technical assistance that aims to expand inclusive and climate finance in the country.
This will help the State Bank of Vietnam (SBV) to strengthen the regulatory framework for digital finance, build the capacity of government and other industry stakeholders, and assist financial institutions to develop digital banking.
Additionally, this will also will help advance women’s financing access, including through the provision of training opportunities on fintech and green banking best practices to SBV staff.
They are targeting 25% female participation, as well as consulting services to women-led SMEs on preparing green loan applications.
“Financial institutions rely heavily on collateral-based credit decisions. This disadvantages SMEs, which typically have little or no collateral. Banks also often centralize their credit processes, making it relatively more expensive to process smaller loans. This technical assistance can help find solutions such as alternative credit scoring and introducing digital lending.”
said Winfried Wicklein, Director General for Southeast Asia at ADB.
By enhancing the regulatory environment for innovative fintech solutions and building capacities of market players in digital finance, Switzerland supports Vietnam in fostering the digital transformation of its financial sector. Ultimately, this will help SMEs in Vietnam to better access finance and expand their businesses.”
said Dominique Paravicini, Head of Economic Cooperation and Development at the Swiss State Secretariat of Economic Affairs (SECO) and Switzerland’s Governor to ADB.
This article first appeared on fintechnews.sg