Jorge Rubio Nava, Global Head of Citi Social Finance, recently outlined Citi’s global role in social finance and the prospects for growth in Vietnam and throughout Asia.
Since its establishment in 2005, Citi Social Finance has been primarily focused on microfinance, later branching out to finance that enhances access to crucial services for overlooked communities. The venture has successfully mobilized over US$19.7 billion, positively impacting 22.7 million low-income and underserved families, including 12.3 million women in over 50 emerging markets.
In 2021, the bank introduced its Global Social Finance Framework and, three years later, issued a $3 billion Social Finance Bond. Social finance’s goal is not just to provide funds but also to assure that these funds reach communities where they can foster inclusive economic development.
Citi defines social finance as supporting projects that enhance access to vital services for underserved populations. This includes affordable infrastructure, housing, economic inclusion, education, food security, and healthcare. Each transaction under this umbrella is scrutinized against pre-set criteria and anticipated social outcomes, with the bank having developed internal guidelines for eligibility, financing structures, and impact measurement.
In Vietnam, Citi recently finalized two social trade finance transactions with BIDV and MB. These deals spotlight the significant opportunities in the country, where micro, small, and medium-sized enterprises (MSMEs) contribute more than 45% to GDP and over 60% to employment.
Citi provided over $100 million in social trade advance facilities to BIDV and MB, intended to bolster the banks’ lending to MSMEs for working capital and income-generating activities. This contributes to business expansion and job creation. These transactions also showcased how social finance can be amplified through collaborations with local financial institutions.
In addition to their banking partnerships, Citi is also engaging with corporate clients, such as a Vietnamese coffee company. Through a financing arrangement, they are supporting the company’s working capital while also helping expand market access for smallholder coffee farmers via its supply chain.
What was the purpose of Jorge Rubio Nava’s recent trip to Vietnam?
The purpose of the visit was to engage with corporate clients and financial institutions to explore how social finance can aid in business growth.
What is required for social finance to develop further in Vietnam and Asia?
Continued client demand, transparency in the use of proceeds, measurable outcomes, consistent reporting, and scalability are crucial for the growth of social finance in the region.
Does Citi plan to continue expanding its social finance activities in Vietnam and other parts of Asia?
Yes, Citi intends to keep growing its social finance activities in Vietnam and Asia by partnering with clients to develop financing solutions that merge commercial viability with measurable social impact.
