When President Biden traveled to Vietnam last week, he described a “50-year arc of progress in the relationship between our two nations” and formally elevated ties to a Comprehensive Strategic Partnership to foster increased collaboration on regional security and global supply chains, as well as the “people-to-people” ties that are at the heart of sustained progress.
For DFC, the people of Vietnam are also at the core of a rapidly growing portfolio in the country that is helping farmers reach larger markets, investing in small businesses, and providing growth capital to innovative IT startups.
DFC CEO Scott Nathan, who was in the country with President Biden last week, announced more than $400 million in new DFC financing to help advance these goals, which includes two transactions to major Vietnamese banks VPBank and TP Bank, to bolster lending to small- and medium-sized enterprises in the country, including those businesses that are owned by women and often face especially significant challenges accessing finance.
These new commitments will nearly triple DFC’s portfolio in Vietnam to $737 million, representing DFC’s largest exposure in Southeast Asia and our second largest in the Indo-Pacific region.
This increased focus on Vietnam comes as the country works to return to brisk levels of economic growth that were disrupted by COVID-19. In the wake of the pandemic, Vietnam’s annual GDP growth contracted from more than seven percent in 2019 to less than three percent today, impacting businesses of all sizes as well as the suppliers and farmers that support these businesses.
DFC recognizes that restoring the pre-COVID levels of growth will require investment in businesses in both traditional and emerging sectors of the economy.
Earlier this year, for example, DFC committed a $4 million loan to help a small chocolate business, Marou Chocolate Company, build a modern processing facility so that it can increase its capacity and support more farmers.
Another DFC investment, in the Australis Aquaculture fish farm, is helping the country expand seafood exports beyond shrimp by raising barramundi, or Asian sea bass, a local fish with a high nutritional value that is enjoying increased demand around the world. Today, Australis is the world’s largest exporter of barramundi and sells to major retailers around the world.
DFC’s support for investment funds in the country has provided capital to multiple IT startups that are creating jobs for an increasingly educated workforce. Beacon Fund, for example, has used DFC financing to invest in multiple IT businesses, including Topica EdTech, which provides online undergraduate programs to students across Southeast Asia.
“DFC is proud to be supporting the U.S.-Vietnam Comprehensive Strategic Partnership by announcing more than $400 million in new investments in the country,” said DFC CEO Scott Nathan. “We are excited to continue to invest in Vietnam, a crucial partner in advancing economic growth and stability, sustainable energy, technology and innovation, and resilient supply chains.”