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Vietnam: Making the Financial System Work Better for Women Entrepreneurs

This post originally appeared the USAID Private Sector Engagement Hub Exposure site. Read the original piece here.

Women entrepreneurs face significant challenges in building their businesses. The USAID-supported Beacon Fund, established in 2020, provides fit-for-purpose financing and business support to women-led businesses in Southeast Asia. One of its first investments was in Hoa Nang Organic, a women-led organic rice company in Vietnam that has sustainability and gender equality at the center. The investment has already given Hoa Nang more confidence and credibility, showing the impact that applying a gender lens to investments can have in empowering women and giving them more economic opportunities.

Photo credit: Hoa Nang Organic

By Natalie Alm, INVEST Communications Advisor

It’s clear that investing in women is good for communities and for the planet. Governments, development organizations, and philanthropies are rallying to promote women’s economic empowerment as a critical element in countries’ development. Beyond the societal benefits, evidence also suggests that women can provide more consistent returns on investment and less risky debt. By investing in women, private sector companies and development agencies like USAID can do good, and do well financially — so it’s in all of our best interests to see women entrepreneurs succeed.

However, women face significant challenges in building their businesses. This is true at every stage. Domestic responsibilities and caregiving work may limit the time they can spend building a business. They are less likely to have the collateral, such as a house or land, necessary to establish bank accounts or seek business loans, and often end up paying higher interest rates. When seeking investment, they have smaller networks to fundraise among, and face bias or double standards in how their pitches are received, compared to men. Women investors are twice as likely to invest in women entrepreneurs, but they make up only 14 percent of fund managers globally.

If we really want to help bridge the financing gap for women entrepreneurs and help them get the support they need to build their businesses, how can we assess their specific and holistic needs, recognizing that the traditional investment system was just not designed for them in the first place?

One entrepreneur’s journey

In 2015, Dang Thi Truong An was working at an agriculture company and looking for ways to introduce more sustainability into the company. She led a successful pilot program, but the company wasn’t willing to scale it.

So she left to start her own agribusiness in 2017, launching Hoa Nang Organic, an organic rice company. Hoa Nang began slowly, with An and her co-founder working with local farmers in the southern Ben Tre province, part of the Mekong Delta Region known as the “Rice Bowl of Vietnam.” As of today, they work with smallholder farmers on 200 hectares of farmland.

Like many smaller women-led firms, Hoa Nang Organic operated on its own timeline, focused on moderate and steady growth. While many of these smaller women-owned businesses are in fact profitable, cash-flow positive businesses growing at healthy rates, they are sometimes dismissed as ‘lifestyle’ or ‘micro-businesses’ and miss out on critical funding opportunities. Moreover, the margins in organic agriculture are especially slim, discouraging many investors. Hoa Nang also wasn’t the “unicorn” company that most venture capitalists are looking for, one with explosive growth and goals to exit.

Photo credit: Hoa Nang Organic

Giving women entrepreneurs the support they need

Enter the Beacon Fund. The investment firm approaches this gap as a market opportunity for providing more financial services to women entrepreneurs. USAID agreed. As part of its goal to catalyze commercial investment for women’s economic empowerment and equality, USAID backed impact investing firm Patamar Capital in launching the new fund focused on women-led and women-focused businesses in Southeast Asia.

USAID provided $1 million in catalytic capital support through the INVEST initiative. This served as a “risk buffer” to incentivize additional investment from the private sector. With the fund’s lower risk profile, additional investors have put in more than $20 million to date.

Beyond providing financing, the Beacon Fund is relationship-driven, selling itself as a partner for the women founders it invests in. “We’re not just a bank loan,” says Yen Do, investment manager at the Beacon Fund. “The founders feel they are backed by a professional institutional investor and advisor, which adds to their credibility and confidence.”

The power of investment

Hoa Nang is the Beacon Fund’s second-ever investment. Their commitment has given An and her team new connections and increased confidence in pursuing additional funding alternatives that previously seemed out of reach, now that they have a stronger track record and reputation. An says that it is also a “validation of Hoa Nang’s values, that we have potential.”

In addition to its environmental commitments, Hoa Nang wants to do good for the communities in which it works. “I think that Hoa Nang is able to marry the traditional business of farming with a modern approach, bringing social value in addition to economic value,” says An. Women make up more than 70 percent of Hoa Nang’s staff and about half of the farmers it works with, and An and her team are intentional about building female leadership within the business. They have facilitated management trainings and English programs for staff and negotiate directly with the women farmers, who often control their family finances, on pricing.

Hoa Nang has grown to supply rice through more than a dozen distributors and online in Vietnam and secured a major contract with one of Vietnam’s largest dairy companies. They also hope to explore additional rice products, like rice noodles or rice paper, and want to expand into America and Europe.

Photo credit: Hoa Nang Organic

The ripple effects of empowering women leaders

The market opportunity is impressive: Looking forward, the fund aims to raise $100 million by 2023 to support many more women-led businesses, recognizing that they don’t always fit into traditional venture capital and private equity investing models. Rather than fitting women into the system, Beacon aims to change the system itself, highlighting alternative models of entrepreneurial success and the big opportunity in expanding investors’ sights beyond the unicorns.

The Beacon Fund recently announced a multi-million commitment from the Visa Foundation and is actively looking for additional women-led businesses to add to its portfolio. As Yen says of Beacon’s long-term goals, “It’s about empowering the founders and shifting power dynamics — that’s what a lot of we’re doing in gender lens investing ultimately comes back to.”

Changing the way the investment system works for women and empowering women leaders creates powerful ripple effects. Ultimately, women entrepreneurs will be able to break through the biases, participate fully in the economy, and pass along those benefits to their communities.

Photo credit: Hoa Nang Organic



INVEST, a USAID initiative, mobilizes private investment for development goals. It drives inclusive growth and sustainable development in emerging markets.

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INVEST, a USAID initiative, mobilizes private investment for development goals. It drives inclusive growth and sustainable development in emerging markets.