Women-led firms face challenges in accessing bank loans

Only 65 per cent of nearly 96,000 women-owned businesses in Việt Nam have applied for bank loans and only a third has got them.

This implies that only 20,000 women have been able to access bank credit.

VPBank expects to bring both financial and non-financial supports to women-led businesses.

This was reported at a seminar, “Liberating Women Leaders’ Potential,” held by Việt Nam Prosperity Joint Stock Commercial Bank (VPBank)’s Small and Medium Enterprise Division (VPBank SME) in Hà Nội and HCM City last week.

According to a recent report of the International Finance Corporation (IFC), Việt Nam has nearly 96,000 women-owned businesses, making up some 21 per cent of all registered businesses. A majority of these enterprises are of micro scale - 42 per cent are small- and medium-sized enterprises (SMEs) and only one per cent (or more than 850 enterprises) are of a large size.

IFC said the gap between the capital demand of SMEs owned by women and what banks offered was estimated at VNĐ27 trillion (more than US$1 billion).

It added that most banks did not consider applying a separate strategy to SMEs run by women. Some even think that women are less knowledgeable about business and need more support. According to banks, women-led firms are more vulnerable to risks, often do not own family businesses they work for and have lower financial management skills than men.

Đào Gia Hưng, deputy director of VPBank SME, said in Việt Nam, the rate of women-owned companies was seven per cent, the second in Southeast Asia after the Philippines. This is half of the rate in the US and European countries (15 per cent).

Đào Gia Hưng, deputy director of VPBank SME delivers a speech at the seminar.

“This is actually a reason why Vietnamese women have the potential to become CEOs of their companies,” Hưng said.

According to VPBank’s statistics, the rate of overdue debts of women-led firms was half than that of firms led by men. The debt payment of companies owned by women, therefore, will be stricter.

Hưng, however, added that women-owned businesses faced more difficulties, such as small scale, mortgage assets and money flow management.

Sharing the ideas, Đặng Châu Giang, head of marketing and customer care at VPBank, said women-owned firms had made contributions to the economy but did not get as much financial support as needed.

In fact, enterprises led by women hold more potential. The IFC report indicated that women’s approach to risks was different from that of men as the former focused on long-term goals and had greater awareness of risks.

With the desire to accompany and support businesswomen to break out of old frameworks and stereotypes and become entrepreneurs as well as to motivate women-owned businesses to continue to grow, VPBank has offered special support to SMEs led by women.

Women-owned firms can easily access VPBank’s loans without mortgage assets, with a preferential interest rate of 1.5 per cent lower than the normal rate. The lending could be up to VNĐ5 billion each.

“It means that nearly one-third of women entrepreneurs who had not been given loans by banks due to a lack of mortgage assets will now have more convenience in accessing loans,” Giang said.

VPBank also expects to bring non-financial values to women CEOs. 

Attended by more than 600 businesswomen, the seminar provided new opportunities in capital resources, trading networks and multi-dimensional knowledge for women entrepreneurs, helping them develop their professional skills and leadership style.

The seminar also provided a platform to businesswomen to meet and talk directly to speakers before, during and after the programme to help them expand their network and be consulted thoroughly to identify the right direction for their businesses.

VPBank said it would also organise a series of regular meetings and workshops. The bank is building an online app for entrepreneurs seeking information, improving business management knowledge, connecting in trade and establishing a strong network of relationships with other female leaders, thereby seeking and expanding business opportunities for their businesses. The app is expected to be launched in early 2019.

Through its series of the above-mentioned activities, VPBank looks forward to being a supporter in building a community of businesswomen with growing networks and establishing an effective platform for female CEOs to further improve their businesses.

Along with its non-financial values, VPBank SME will bring opportunities for capital and financing products designed to help women owners save money and manage cash flows as well as make use of capital in a flexible way.

“This seminar is the official opening event for the ‘Become the Bank Chosen by Businesswomen’ project, which we started in 2016,” a representative of VPBank said. “The positive response of businesswomen to our series of surveys and pilot activities during the past two years has been of great encouragement to us to implement the project. We hope that acting as a bridge for the female entrepreneur community by providing them timely capital will help inspire and motivate breakthroughs for women-led businesses.”