Vietnam draws impact investment, opening new opportunities for SMEs

Many international investors, financial institutions, agencies, and businesses gathered at the 'Vietnam Impact Connect: Capital for Growth' forum in Ho Chi Minh City on Tuesday to discuss solutions for strengthening the capacity of Vietnamese SMEs and improving their access to global capital sources.

The forum was co-hosted by the Investment and Trade Promotion Center of Ho Chi Minh City and Impact Investment Exchange, and supported by Global Affairs Canada.

Speaking at the event, Nguyen Loc Ha, vice-chairman of the Ho Chi Minh City People’s Committee, said impact investing is becoming a major trend globally as it aims not only for financial returns but also for positive social and environmental outcomes.

Alongside traditional capital sources, new financial models such as impact investing are opening pathways to connect international resources with businesses that pursue sustainable development, Ha noted.

Impact investing refers to investments designed to generate both financial returns and measurable positive impacts on society or the environment.

These investments are often associated with goals such as poverty reduction, job creation, environmental protection, gender equality, and support for vulnerable communities.

Ho Chi Minh City is actively promoting such sectors as the green economy, clean energy, high technology, innovation, and digital transformation, while also developing a startup and innovation ecosystem to support new business models.

“The city always welcomes and encourages collaborative initiatives between financial institutions, investors, and the business community to foster innovation, promote green economic development, and enhance the quality of growth,” Ha said.

He also affirmed that the city will continue improving its investment climate and supporting firms.

Capital must reach SMEs

The forum was part of the Canada-funded Impact Investment Readiness Vietnam project.

Since 2022, the initiative has mobilized more than CAD$17.5 million (US$12.9 million) in impact investment into Vietnam and helped strengthen the capacity of nearly 250 social-impact enterprises.

Robert Kraybill, chief investment officer at Impact Investment Exchange, said the world needs around $4 trillion annually to achieve sustainable development goals.

Building financial infrastructure is essential to channel private capital into sectors with the greatest needs.

“Vietnam is well positioned to attract this capital thanks to its commitment to achieving net-zero emissions by 2050 and its vibrant community of impact-driven enterprises, making the country an appealing destination for investment,” Kraybill said.

In Vietnam, sectors such as energy and financial services are currently attracting the largest share of impact investment capital.

The International Finance Corporation committed a record $310 million in climate financing for the 2024 fiscal year.

However, limited collateral, insufficient credit histories, and a lack of flexible financial instruments tailored to business cash flows continue to pose challenges for Vietnamese SMEs seeking to access investment capital, including impact investment funds.