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The Asian Development Bank (ADB) and the State Bank of Vietnam (SBV) held an event to commemorate the implementation of a US $5 million technical assistance programme funded by Switzerland to foster the development of financial technologies. Together with a US$ 2 million contribution from the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR), funded by the Japanese government, the financing aims to bolster financial inclusion in Vietnam.
Fintech is a priority in the Vietnamese government’s strategies for broadening financial services access for consumers and small and medium-sized enterprises (SMEs). The support provided will enable SBV to enhance the regulatory framework for digital finance, enhance the capabilities of government and various industry stakeholders, and aid financial institutions in the development of digital banking.
The technical assistance will help small and medium-sized enterprises, particularly women-owned and women-led SMEs (WSMEs), get access to finance. It will do this by supporting the SBV in crafting and implementing a regulatory framework that fortifies the digital finance sector, ensuring both a secure market environment and a flourishing ecosystem.
The assistance plan includes offering training opportunities that cover fintech and green banking best practices for SBV staff, with the goal of having a 25% female participation rate. Additionally, consulting services will be extended to women-owned and women-led small and medium-sized enterprises to assist them in preparing green loan applications.
The technical assistance programme will help SBV in refining its policies related to green banking and in conveying these policies to stakeholders in the financial sector.
According to a report from May, green banking is expected to play a pivotal role in assisting Vietnam in securing the necessary annual financing of US$ 11 billion to attain its target for net-zero carbon emissions by 2050.
Moreover, the report noted that as of May, nearly 80% of Vietnam’s population is categorised as unbanked or underbanked. During the same period, the unfilled financing needs of SMEs were estimated at approximately VND 500 trillion (US$ 21 billion). Meanwhile, women entrepreneurs in Vietnam collectively held an estimated US$ 1.2 billion, but only a few banks had taken proactive steps to tap into this market opportunity.
As per an ADB official, financial institutions rely heavily on collateral-based credit decisions, creating a disadvantage for SMEs that usually lack sufficient collateral. Furthermore, banks frequently centralize their credit procedures, making the processing of smaller loans comparatively costly. This technical assistance (TA) initiative aims to identify solutions, including alternative credit scoring methods and the introduction of digital lending, to address these challenges.
The programme will encourage the capacity building of relevant government ministries and members of fintech and banking associations. It will also lend support to selected commercial banks to develop digital banking services.
During the ceremony, SBV Deputy Governor Pham Tien Dung expressed the central bank’s appreciation for the technical assistance project, which will be an important element in establishing a conducive environment for fintech growth. This, in turn, will enhance the quality and variety of fintech services and products, contributing to advancing national financial inclusion.
The project represents an extension of Switzerland’s efforts to bolster Vietnam’s financial sector. By nurturing Vietnam’s fintech sector and promoting the digitisation of the banking industry, the programme creates fresh prospects for small and medium-sized enterprises to enhance their access to financial resources, the Swiss State Secretary for Economic Affairs Dominique Paravicini stated.
