The first inclusive Business Investment Forum was held on April 1 in Ho Chi Minh City, to determine further steps to be taken towards the establishment of an Inclusive Business Fund in Vietnam.
|Representatives of organizations discuss at the forum (Photo: U. Phuong)|
The Ministry of Planning and Investment (MPI), the Asian Development Bank and the Netherlands development organization (SNV) organized the forum jointly.
The event aimed to discuss possible investment opportunities, promote an exchange between companies interested in “Inclusive Business (IB)” and possible financial institutions and set up the Inclusive Business Fund in Vietnam.
During the Forum, various experts shared their views on the Inclusive Business approach and the readiness of Vietnam for social financing at the base of the pyramid (BoP).
“Inclusive business initiatives are already tested in Latin America and Africa. But our work in Vietnam would be the first comprehensive development partnership support initiative in Asia.” said Mr. Allert van der Ham, the Regional Director of SNV Asia.
The ADB/SNV study found that more than 70 companies are already doing business at the “base of the pyramid (BoP)” and at least 16 investors and funds in the country could be interested in debt or equity investments in an inclusive business fund for Vietnam with an initial fund of US$60-100 million.
The study proposed ADB to be the “seed investor” with US$20 million. Financial needs for inclusive business ventures are estimated between US$0.4 million and US$10 million for a period of 6 years, with an average of about US$3.7 million per venture. The fund could therefore cover a number of diversified investments.
|Inclusive Business Mapping poster outside the forum hall (Photo: U. Phuong)|
In addition, the study also proposed a grant of US$5-6 million to finance a regional technical assistance project to facilitate inclusive business incubators in six countries and various development partner agencies showing interest in cooperating with ADB on both the capacity building initiative as well as on the establishment of the investment fund for inclusive business.
The study pointed out that some private companies in Vietnam are already engaged in business ventures working with and for the poor. The study further found that the business environment in Vietnam is very conducive to the idea of social financing at the “base of the pyramid (BoP).” Also private sector enterprises are indeed forthcoming with specific investment opportunities for new BoP ventures. The capital market has adequate conditions to establish and run an Inclusive Business Fund that generates attractive social and financial returns. The government and development partners support the IB-BoP approach and wish to help Vietnam broaden its initiatives at the interface between private sector development and poverty reduction.
Those attending the forum were Nguyen Van Trung, Planning and Investment vice Minister, Nguyen Hoa Cuong from MPI, Vietnam Business Council for Sustainable Development (VBCSD) and many experts from development partner institutions. Initiative taking organisations like ADB, SNV, Danish Internacional Development Agency, the Netherlands Development Finance Company, Market for the Poor, chief executive officers of Kien Long Bank, Rang Dong Company and Duc Viet company, Dragon Capital, Mekong Capital, private sector firms, investment funds and development partner agencies were also present.