Norfund Grants Convertible Loan to Vietnam’s SeABank

Norfund announced its decision to invest $30 million in SeABank i.e. Southeast Asia Commercial Joint Stock Bank.

The Norwegian Investment Fund for Developing Countries disclosed that the investment in the Vietnam-based bank will be in the form of a convertible loan.

The Loan

A statement from SeABank revealed that in a four-year term, it is possible to convert the loan into common shares of the bank.

The goal is to provide additional capital for supporting micro-enterprises, small and medium enterprises (SMEs) and retail banking customers in Vietnam.

SeABank’s Vice Chairwoman of the Board of Directors (BOD), Le Thu Thuy, talked about the partnership.  

She said that the aim of the partnership was to have a positive impact on Vietnam’s economic growth. In addition, it would enhance financial access for the bank’s retail banking and SME clients.

She added that the loan was also in line with the sustainable development strategy that SeABank had developed for the upcoming period.

The statement further revealed that thanks to the cooperation, SMEs would be able to have access to additional financial resources.

These would be useful for fulfilling their capital demands in the long-term. Additional capital is also available for retail lending purposes, as this group has increasing financial needs.

The Mandate

Regional Director (Asia) of Norfund, Fay Chetnakarnkul, said that the core mandate of the Norwegian Investment Fund for Developing Countries is financial inclusion.

This aligns with the strong commitment that SeABank has shown for supporting and financing SMEs and retail banking customers in Vietnam.

The Director further said that the partnership would become the linchpin that can support the country’s underbanked and unbanked population.

The statement said that due to Norfund’s investment, SeABank’s reputation had been reaffirmed. It also showed trust in the bank’s operational and capital utilization efficiency.

Moreover, the corporate clientele of SeABank will also be able to improve capacity and effectively promote important business areas.

The Fund

The Norwegian government owns Norfund and the investment fund was established for creating jobs and improving lives.

It aims to accomplish this goal through investments in businesses in developing countries, which can result in sustainable development.

SeABank, on the other hand, had previously received foreign investments worth $600 million. These had come from some renowned institutions, such as International Finance Corporation (IFC).

The investments are aimed at accelerating the sustainable development strategies of the bank. SeABank has managed to provide strong support to SMEs and deliver flexible financial solutions.

This is all because of international funding and the capacity available. The bank also gives priority to climate change mitigation projects and green credit disbursements.

In fact, green mortgages are also offered to individuals purchasing houses that have green-building certificates. This has a positive impact on the environment and the socio-economy.