JICA and BIDV launch $50m sustainable financing for rural MSMEs

JICA and BIDV launch $50m sustainable financing for rural MSMEs

Japan International Cooperation Agency and BIDV have announced a sustainable financing facility to support rural micro, small and medium-sized enterprises in Vietnam.

The loan agreement, signed last December, lays the foundation for expanded long-term financing to micro, small, and medium-sized enterprises (MSMEs), with a focus on rural areas. On April 13, the two sides held a closing ceremony to mark the successful completion of the Rural MSME Support Programme under Japan International Cooperation Agency's (JICA) Private Sector Investment Finance scheme.

The JICA loan amounts to $50 million. The loan is co-financed with the Asian Development Bank (ADB), which has committed funding of up to $120 million, alongside participation from commercial lenders. In addition, a portion of the ADB financing will be provided through the Canadian Climate and Nature Fund for the Private Sector in Asia, which was established within ADB by the government of Canada.

Under the project framework, the $50 million JICA loan will be channelled through BIDV, with $30 million allocated specifically to MSMEs in rural areas and $20 million designated more broadly.

The scheme will contribute to the UN's Sustainable Development Goals, including Goal 1 (No Poverty), Goal 2 (Zero Hunger), and Goal 17 (Partnerships for the Goals), by supporting rural livelihoods, enhancing financial inclusion, and strengthening international development cooperation.

During the ceremony, stakeholders expressed their expectations that the financing would improve access to finance for MSMEs, particularly those in the agricultural sector, a key domestic industry, thereby contributing to the expansion of agricultural production and increased incomes in Vietnam.

The ceremony marked an important milestone in the initiative and underscored JICA's continued commitment to partnering with Vietnamese financial institutions to support private sector development and long-term economic resilience, particularly in rural and underserved communities.

VIR