Assessment of the demand for WSS MSME financing opportunities for financial institutions in Vietnam

• Aug 8, 2025
• 1 min

Access to finance remains a major barrier for water supply and sanitation (WSS) micro, small, and medium enterprises (MSMEs) in Vietnam. This limits their ability to scale operations and improve service delivery. Despite rising demand for clean water and sanitation services, these businesses face significant challenges, such as limited credit histories, a lack of tailored financial products, and unclear bankability criteria. These challenges restrict their access to formal financing. 

MSC conducted a qualitative market study to address this. We sought to identify financing gaps and explore ways to enhance financial institutions’ engagement with the WSS sector. The study included interviews with 14 financial institutions and 15 WSS-focused MSMEs across urban and rural regions. It mapped the current lending landscape, assessed financing needs, and analysed stakeholder perceptions and practices. 

We conducted in-depth market research to evaluate MSMEs’ borrowing behavior, operational models, financial constraints, and readiness for credit. These insights helped shape targeted strategies to unlock financing. Some strategies included product design, capacity building for lenders, blended finance opportunities, and regulatory guidance to improve MSME bankability. 

The findings enabled Water.org to understand the WSS financing ecosystem in Vietnam better. The organization developed a six-point action plan. The plan recommended actions to strengthen partnerships with government stakeholders, organize a national forum, and form a local implementation team. It also highlighted how to engage financial institutions, assess financial product viability, and explore blended finance solutions. 

Water.org commissioned this project.