Representatives of OCB (left) and IFC (right) sign the agreement. (Photo courtesy of IFC) Hanoi (VNA) - The International FinanceCorporation (IFC) – a sister organisation of the World Bank and member of theWorld Bank Group - and the Orient Commercial Bank (OCB) on March 27 signed acooperation deal on a 100 million USD credit package and a consultancyprogramme to promote supply chain financing.
Under the agreement, IFC will provide a loan worth 100million USD to the OCB with a term of three years, including 57.16 million USD fromIFC’s own account and 42.84 million USD from the multi-investor ManagedCo-Lending Portfolio Programme (MCPP) managed by IFC.
TheIFC-led financing package, combined with advisory services, will boost lendingto small- and medium-sized enterprises (SMEs), especially women-owned ormanaged, and will promote supply chain finance in Vietnam.
Comprising98 percent of Vietnam’s total enterprises, SMEs are the primary engine ofjob creation in the country, employing more than half of the labour force andcontributing about 40 percent to gross domestic product. Yet, some 60 percentof SMEs have unmet financing needs, creating a 21 billion USD financing gap.Access to finance is key to unlock the potential of SMEs, according to IFC.
Speakingat the signing ceremony, OCB General Director Nguyen Dinh Tung said thebank sees SMEs as an important target segment to realise its strategy to becomea leading retail and SME bank in Vietnam.
“IFC’sfinancing package helps reinforce the bank’s continued commitment to expandinglending to this segment, enabling SMEs to further grow and improve theirperformance in the context of increased competition,” he added.
Inaddition to funding, in partnership with the Swiss State Secretariat forEconomic Affairs, IFC will help OCB develop its supply chain finance business.While Vietnam is an export driven economy, few local banks offer a full rangeof supply-chain financial services to smaller businesses. With IFC’s support,OCB will develop a supply chain finance electronic platform to support thefinancing of commercial transactions.
“Thisfinancing package with its large mobilisation component is expected to have acatalytic impact for gender finance in the Vietnamese banking sector, which isat a critical juncture of mobilising long-term private funding to support thecountry’s crucial goals of developing SMEs and accelerating economic growth,”said Vivek Pathak, IFC Regional Director for East Asia and the Pacific.
IFChas provided to date more than 400 million USD in financing for womenentrepreneurs in Vietnam.-VNA
VNA
