IFC increases trade finance limits to support Vietnamese businesses amid Covid-19
The increased total limit of US$294 million will enable these banks to improve their capacity to cover payment risk in granting trade financing to local companies, mostly small and medium enterprises.
The International Finance Corporation (IFC), a member of the World Bank Group, has increased trade finance limits for Vietnamese banks as a rapid response initiative to address, in advance, potential trade finance challenges triggered by the outbreak of the novel coronavirus, known as Covid-19.
The spread of Covid-19 has caused business disruptions in Vietnam since the first case was announced in late January. Apart from a fall in tourism and associated services, the epidemic has affected cross-border trade impacting manufacturing, agribusiness and other sectors.
In response, IFC is supporting Vietnamese businesses by increasing trade limits for four client commercial banks including An Binh Commercial Joint Stock Bank, TienPhong Commercial Joint Stock Bank, Vietnam International Commercial Joint Stock Bank (VIB), and Vietnam Prosperity Joint Stock Commercial Bank. The increased total limit of US$294 million will enable these banks to improve their capacity to cover payment risk in granting trade financing to local companies, mostly small and medium enterprises.
This initiative complements the State Bank of Vietnam, the country’s central bank, (SBV)’s call to financial institutions to support local businesses, which may be affected by the coronavirus outbreak — particularly those in trade and supply chain linkages.
“Leveraging IFC’s global experience in responding to several economic crises in the past, the decision to increase trade limits is an effort to ensure continued trade flows during this challenging phase. The expanded trade finance line will help mitigate trade finance risks, thus softening the impact of Covid-19 on the Vietnamese economy and the private sector,” said Mehmet Mumcuoglu, IFC Financial Institutions Group Manager for East Asia and the Pacific.
“IFC’s initiative, an effective response to help ensure resiliency, shows our confidence in our local partner banks as well as our commitment to strengthen Vietnam’s economy,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR.
Following this fast-to-implement and flexible trade finance instrument, IFC is exploring other expanded interventions to extend its support to Vietnam to mitigate the economic impact of Covid-19 and help the nation sustain robust economic growth.
- The Vietnam-US comprehensive partnership facilitates investment activities: PM
- Vietnam's securities accounts surpass 5-million mark
- Finance ministry proposes extending tax payments worth US$870 million for domestic cars
- Foreign capital returns to Vietnam's stock market in 2022: SSI
- Vietnam’s easing monetary policy unlikely to reverse amid Fed’s rate hike
- Shinhan Financial to acquire 10% stake in Vietnamese e-commerce Tiki
- Banks cut lending rates to support businesses
- Gov’t aims at transparent, sustainable stock market
- KEB Hana Bank committed to long-term presence in Vietnam
- Corporate bond issuance in Vietnam declines sharply in Q1
Vietnam opens doors for foreign investors in new business fields: PM
Dream of a riverside city
Where to go and what to do in Hanoi for locals and tourists?
Exhibitions mark President Ho Chi Minh’s 132nd birthday anniversary
The Vietnam-US comprehensive partnership facilitates investment activities: PM
FPT opens new office in New York, 10th in US
Vietnam’s e-commerce: driver for economic recovery in post-Covid-19
Vietnam, Qualcomm boost cooperation for 5G development
SEA Games 31 delegates get free Hanoi Bus Tour