FMO, the Dutch entrepreneurial development bank, will provide a $10 million equivalent loan in Vietnamese dong to Vietnam-based microfinance institution Tinh Thuong One Member Limited Liability Microfinance Institution (TYM), according to project information seen by CrowdFund Insider.
The loan will support lending to rural micro-entrepreneurs, FMO said.
The five-year facility is intended to help TYM expand access to finance for underserved borrowers, particularly low-income households and women operating small businesses in rural areas.
The financing will be provided in local currency, helping support TYM’s lending growth while avoiding direct foreign-currency exposure for its borrowers.
TYM is one of Vietnam’s larger microfinance institutions, with a focus on the country’s northern and central regions.
It provides unsecured loans and savings products to more than 228,000 customers through 23 branches and 51 transaction points, according to FMO.
The institution primarily serves rural, female micro-entrepreneurs, and low-income customers who may have limited access to conventional banking services.
Its target borrowers include poor and near-poor households, low-income women and microenterprises seeking financing for income-generating activities.
FMO said the investment is aligned with its strategy on financial inclusion, gender-focused investing, and inclusive growth. The development bank said expanding access to financial services among underserved groups could help address inequalities while supporting economic activity among low-income households.
Beyond financial products, TYM provides non-financial services to its customers, including free health checks, capacity-building programmes, scholarships, and other community activities.
FMO said the combination of financial and non-financial support contributes to its development objectives in the communities where TYM operates.
The investment is also linked to the United Nations Sustainable Development Goals on reducing inequalities and achieving gender equality, or SDGs 10 and 5 respectively.
FMO classified the transaction as Environmental and Social Category FI-C, reflecting the microfinance nature of TYM’s portfolio.
The classification indicates that the institution’s lending activities are subject to environmental and social screening appropriate for financial intermediaries.
According to FMO’s project information, TYM has no exposure to activities covered by FMO’s exclusion list or transactions that would trigger the International Finance Corp’s Performance Standards.
TYM screens transactions against its own exclusion list and is required to operate in accordance with applicable Vietnamese laws and regulations.
The financing comes as development finance institutions continue to use local financial intermediaries to channel capital toward small businesses and underserved borrowers in emerging markets, particularly where conventional financial services remain less accessible.