The lender, formally Asian Development Bank, aims to incentivize banks to restructure existing loans or extend new ones to at least 500 women-led SMEs in Vietnam.

The grant, signed by ADB and the government of Vietnam on Tuesday, will help these businesses avoid bankruptcy, preserve employment and access credit at a time when banks are reducing lending, the bank stated.

Five banks, ACB, BIDV, SHB, TPBank and VPBank, have volunteered to compete for the grant by finding eligible businesses to fund on a first-come, first served basis.

Andrew Jeffries, ADB country director for Vietnam, said support in accessing critical financing is essential for women-led small- and medium-sized enterprises adversely affected by Covid-19.

Economic disruptions caused by the Covid-19 pandemic have fallen hardest on small and medium businesses. In the first 11 months, nearly 93,500 companies suspended operations, up 16 percent year-on-year, according to General Statistics Office.

The funding is part of Women Entrepreneurs Finance Initiative (We-Fi), which is governed by 14 founding contributing countries and managed by the World Bank. It aims to mobilize more than $1 billion to improve the business environment for women-owned or led small and medium enterprises.

Last year, ADB received $20.19 million from the initiative to support businesses in Vietnam and the Pacific.