Although Vietnam has made progress in reducing poverty and growing its economy in recent years, its small and medium-sized businesses often struggle to access financing, according to the DFI.
Swedfund, Sweden’s development finance institution (DFI) has committed $15m (€12.9m) to the Excelsior Capital Vietnam Fund II, which provides growth capital to SMEs in the retail, manufacturing, healthcare, education and tech sectors.
Although Vietnam has a relatively young population, with 70% aged between 15 and 64 years, and SMEs account for 98% of all registered companies, the country’s banking system offers budding entrepreneurs limited long-term financing capabilities, according to Swedfund.
The investment in Excelsior II may help attract more women to the country’s formal economy, according to Sofia Gedeon, Swedfund’s investment director sustainable enterprises.
“This strengthens the Vietnamese private sector and contributes to creation of quality jobs, improved industry standards, and to increased women participation in the workforce, and in leading positions. Moreover, it contributes to increased participation in the formal economy, in a country where 65% of the workforce operate in the informal economy. In this way, Swedfund’s investment supports a more sustainable and resilient economy,” Gedeon said.
Founded in 1979 to reduce poverty through sustainable investments in developing countries, Swedfund’s operations are financed by reflows from its SEK13bn (€1.2bn) portfolio and through capital injections from the development budget of the Swedish foreign office.
