Germany’s DEG to provide $55 mln loan to back Vietnam lender OCB’s SME portfolio

DEG, the German government’s investment arm, has committed a $55 million loan for Vietnam’s Orient Commercial Joint Stock Bank, or OCB.

The funding will be used for on-lending to Vietnamese small- and medium-sized enterprises (SMEs), a DEG disclosure seen on Wednesday.

“$27.5 million, or 50% of total exposure, is earmarked for women-led and women-owned SMEs to promote greater participation of women to drive business, raise productivity and improve the living standards of families in Vietnam,” wrote the firm, part of the German state-run development bank KfW.

“The DEG loan contributes to DEG’s strategy of supporting local decent jobs and market and sector development,” it added.

DEG elaborated that SMEs are one of Vietnam’s main economic drivers, contributing 45% of the country’s GDP.

Established in 1996, Ho Chi Minh City-headquartered OCB is a publicly-listed private commercial bank offering a wide range of banking services to corporate, SME and individual clients. The bank currently operates almost 150 branches and transaction offices in Vietnam.

OCB currently engages more than 6,000 employees, of whom 57% are women, and expects additional jobs through the bank’s job growth as well as the creation of new jobs at its corporate borrowers, says DEG.

This March, DEG approved an investment of 17 million euros ($18.1 million) into Hayat Kimya Vietnam Company, an Asian Development Bank-backed maker of baby diapers, wet wipes, and women’s hygiene pads.

The funding is used to build up production capacity in Vietnam to reduce logistic costs and time, said the German Development Finance Institution.

“Through this engagement, DEG is providing substantial long-term financing which is not readily available locally. This investment in future markets like Vietnam fits with DEG’s strategy and it will contribute to female empowerment in the healthcare value chain,” the German firm said in a disclosure at that time.

In May, Germany's Deutsche Bank announced it almost doubled the allocated capital for Deutsche Bank Vietnam to over $200 million to better support its clients’ expansion plans in the country.