EVN Finance Joint Stock Company

Debt : January 2024

BIO has granted a USD 10 M loan to EVN Finance Joint Stock Company, a deposit taking Non-banking Financial Institution in Vietnam

Amount

$ 10,000,000.00

Type of investment

Debt

Development impacts

Local economic growth
Private sector consolidation/innovation
Fight against climate change and preservation of natural resources

Beneficiary locations

Asia: Vietnam

Investment field

Financial Institutions

Activity

KK.64.190 Commercial banking

Organisation

EVN Finance Joint Stock Company

Website

https://www.evnfc.vn/

Domicile

Vietnam

EVN Finance Joint Stock Company is a deposit taking Non-banking Financial Institution (“NBFI”) that is regulated by the State Bank of Vietnam. Formerly owned by the state-owned electricity utility company, Electricity of Vietnam (“EVN”), it is the second largest NBFI in terms of assets.

The project aims to support EVNF in growing its Micro, Small and Medium-sized enterprises and renewable energy portfolios.

EVNF is the only NBFI in the financial Vietnamese market with a “general license” which allows it to offer a wide range of services. However, its main source of income is its loan portfolio, of which almost half are SMEs.

Development impacts

Local economic growth
The project will help increase access to financial services for SMEs and microenterprises
Private sector consolidation/innovation
Our investment will help EVNF digitise its services and internal processes, allowing it to increase competitiveness, cost efficiency and reach.
Fight against climate change and preservation of natural resources
EVNF plans to expand its renewable energy portfolio by 2027.

E&S Impact

As requested by the Vietnamese Central Bank, EVNF and BIO agreed that the ESMS should be extended to the whole portfolio, and be more demanding towards highest risks and largest transactions, as requested by the EDFI E&S standards. EVNF will also undertake an assessment on its alignment to the Client Protection Principles for its practices towards micro-clients.

Finally, given EVNF’s focus on solar energy, BIO requested it to exclude controversial PV suppliers that are accused of direct involvement in forced labour in Xinjiang.

Situation at the time of investment

EVNF has an E&S policy and has recently developed an Environmental and Social Management System (ESMS) with the support of a consultant. The ESMS was released in July 2023 to become compliant with the recent requirements of the Vietnamese Central Bank that request financial institutions to identify and mitigate E&S risks for SME, corporate and individual customers in all sectors. This new process has been incorporated in the Company’s credit assessment since Q4/2023. In parallel, EVNF has appointed an E&S Manager and E&S officer. It also has a grievance mechanism in place.

Risk Category: A