Re-positioning financial product(s) for women-led enterprises is a critical component of the Ignite Initiative: Unleashing the power of women entrepreneurs (Ignite). Focused Group Discussions were held by CARE International in Vietnam (CARE) and Vietnam Prosperity Joint‑Stock Commercial Bank (VPBank) – an Ignite partner in Ha Noi and Ho Chi Minh City in July 2020 with the participation of more than 10 women entrepreneurs to identify the credit in need.  

Many stories were told and some of them are reflected in the below sharing of Mrs. Dang Thi Chau Giang – the representative of VPBank to the Initiative.  


The worried sighs of small enterprise owners amid the new wave of COVID-19

A massive loss of turnover due to direct or indirect impacts of COVID-19 was a common story we heard when interviewing more than a dozen of enterprises Ha Noi and Ho Chi Minh City. Revenue has fallen down by 70 to 90 per cent for most enterprises while some minor ones have experienced around 30 per cent loss of income.

Yet to enjoy the recovery

In the morning of July 24, 2020, we had a cozy discussion with Mrs. Huong Mai – Director of Saigon Today Travel company in a small office in Ha Noi. While we wanted to discuss another topic with this beautiful, light make-up woman, our conversation was unintentionally shifted to the impacts of COVID-19 on her business. Mrs. Mai decided to start her own business in 2017 by acquiring a tourism company in Ho Chi Minh City, after 19 years working for Torseco. Thanks to her vast experience, wide networks, and strong customer relationship, the company earned VND 30 billion of revenue within the first year in which two third was from inbound and outbound tours. In the same year, Mai and her husband rented new spaces and opened two new restaurants. They also invested in a small hotel in Sapa, creating a complete chain of business. This helped the couple raised their 2019 revenue up to VND 120 billion.  

COVID-19 then suddenly came with toxic impacts. On the second last day of the lunar year in 2019, the news of a strange virus in Wuhan resulted in a series of tour and room cancellations by Chinese visitors (300 rooms, 5 nights),  kicking off  a tough year for the company. COVID-19 entered  Vietnam after the Lunar New Year and no tour could take place until the end of May. Her company was only able to resume the tours in June, after a series of stimulus activities by the Government, cities, and airways carriers. It started to have some cash flows though it was quite limited.

Their two restaurants were closed during the social distancing period in Hanoi as they could not bear the costs. Each restaurant costs them VND 3 billion a month, including space rental fee, staff salaries, and operational expenses, not to mention a large upfront investment. This crisis knocked her down for almost a month in mental depression. Her hotel in Sapa was closed for months. It opened for some individual visitors in June 2020 but had to optimize the operation by providing meals in its large open space.

Then the month of June 2020 passed by with a hope of recovery. Mrs. Mai estimated that the eager-to-travel domestic customers after the long social distancing period would bring about nearly VND 10 billion revenue to the company. But this is less than one tenth of the previous year. Hundreds of her employees were laid off. She referred this as a “3-in-1 combo crisis”.

This is her story on July 24, 2020.  By the same time the following day, the whole country was plunged into the second wave of COVID-19 infection. That beautiful woman must be reckoning her annual income when tours cancellation started over again…

I stayed in a hotel in the center of District 1 during my 3-days business trip to Ho Chi Minh City. Thu Khoa Huan is no longer a busy street, just like a girl who passed her most charming young years. This 300-meters street leading to Ben Thanh market is the location of 11 hotels, of which 3 are closed. On their doors still hang the paper notes that closure is due to instruction by the Government since April 2020.   The hotel security staff remembered my name and spoke to  me after my check-in. He seemed to be so lonely in his polite black vest, taking on various tasks from bellman, security staff to hotel management officer. He couldn’t hide his intimate sigh even when he smiled: “Though we have few dozens of rooms, there are only 15 customers today and 4 for tomorrow, maybe none the next days… I have never seen this happen before”.

While there is life, there is hope

Serious loss of revenues as a result of COVID-19 is the common situation shared by most of the enterprises that we interviewed in Hanoi and Ho Chi Minh City. Most of them suffered a reduction of 70  – 90 per cent in revenue, only some food distribution enterprises had a smaller loss at 30 per cent. Most of them are trying to transform their business activities and struggling for survival.

Ms. Nhi is the owner of Gia Hoa Phat company – an exclusive distributor of Dilma tea sachets imported from Sri Lanka. Facing with falling demands from hospitality sector, the company shifted to retail markets and diversified its products with additional consumable items such as seasoning, soy sauce, etc. to ease the revenue loss and ensure basic salaries for its staff.

Quynh Anh – a young owner of Ifood, which provides imported food such as salmon, pork, beef, etc. to restaurants and hotels in Hanoi. She swiftly launched online sale channels, taking advantages of  convenient delivery services to offset the impact of income loss. The online channel currently accounts for 30% of Ifood’s revenue. Given this win amid the Covid-19 crisis, Quynh Anh stills plans to import fisheries from  for retail activities. Unfortunately, such magic does not happen to all enterprises. Most of businesses  operating in hospitality, tourism, and manufacturing industries which rely on imported materials must transform their business activities as well as cut costs at the maximum level.

Regardless of their status, all interviewed enterprises indicated that they need good financial supports to reinvest or to pay their debts.

During the first half of the year, various banks have restructured loans for COVID-19 affected enterprises. The total number of supported enterprises by June 22, 2020 was nearly 260,000. According to the Central Institute for Economic Management (CIEM), nearly 86 per cent of Vietnamese enterprises are suffering from COVID-19 impacts and 19.3 per cent will cease their businesses (13 per cent higher than in 2019). A rough estimation shows that nearly 400,000 enterprises require debt restructuring supports.

With an effort to regulate the interest rates, in early July 2020, the State Bank of Vietnam requested commercial banks to reduce deposit interest rates in order to lower the lending interest rates, thus reducing pressure on businesses in the fight for survival during the crisis. However, interviewed enterprises indicated that these rates are still high. It is not easy to get loans since the banks are also cautious to protect themselves.

The Ignite Initiative unleashes the power of women entrepreneurs in major urban and periurban centers of Vietnam. It increases their access to finance, technology, information, and entrepreneurial networks through collaboration among financial service providers (FSPs), business accelerators, and NGO partners. In Vietnam, CARE co-implements the Initiative’s activities with 3 partners, including Vietnam Prosperity Joint-Stock Commercial Bank (VPBank), Canal Circle Vietnam Technologies Co., Ltd. (Canal Circle), and Women’s Initiative for Startups and Entrepreneurship (WISE), with the financial support from the Mastercard Impact Fund.