IFC invests $100mln in SeABank
Investment offers the chance for low and middle-income families to purchase homes.
The International Finance Corporation (IFC) has announced a $100 million investment in the Southeast Asia Commercial Joint Stock Bank (SeABank), to boost access to housing loans.
The bank expects to at least double the number of housing loans signed with low and middle-income earners by 2026, and the project is also expected to create thousands of new jobs in construction and related sectors.
With a rapid annual urbanization rate of 3 per cent, half of Vietnam’s population - about 50 million people - are expected to live in urban areas by 2040. This creates demand for an estimated 374,000 additional housing units each year. However, the limited availability of long-term funding has restricted the ability of domestic banks to grow their long tenor loan book, including housing loans. This makes access to housing finance especially challenging for low and middle-income homebuyers, who need longer-term funding due to their low incomes.
Ms. Le Thu Thuy, Vice Chairwoman of the Board of Directors at SeABank, said it is honored to once again receive the precious trust and valuable investment of $100 million to promote housing lending, which increases the IFC’s total investment in the bank to nearly $400 million. “The current housing demand among low and middle-income families in Vietnam is considerable, but their access to finance remains limited,” she explained. “The IFC’s funding will provide SeABank with stable long-term capital and help us strengthen our lending portfolio in affordable housing, therefore promoting access to housing finance, expanding the market and generating economic growth in Vietnam. At the same time, it contributes to enhancing SeABank’s competitive advantage in the domestic banking industry.”
The IFC will also advise SeABank on developing dedicated housing finance products to better serve low and middle-income earners, which is a key priority of the Vietnamese Government.
“Limited housing supply along with rising demand has aggravated the housing shortage for low and middle-income earners in Vietnam’s cities, leaving many simply unable to access the funds they need to buy a home,” said Mr. Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia, and Laos. “By supporting a leading player, the IFC will help address the shortage of affordable housing financing solutions and send a positive signal to the market, highlighting the viability of catering to this untapped market. We are optimistic that this will have a catalytic effect on other banks, promoting a more competitive sector that’s better positioned to meet Vietnam’s growing housing needs, boosting the economy and delivering benefits for people.”
The IFC aims to increase the availability of long-term funds for mortgage lending in emerging markets, allowing access to better quality housing, promoting inclusive development, and creating jobs. In Vietnam, it has worked with both housing developers and banks to promote the availability of both affordable housing and housing finance that lower and middle-income households can access.
