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IFC provides record funding for trade finance for small businesses in Vietnam

IFC has committed a record $505 m in the last 12 months to enable Vietnamese banks to help local companies increase their import & export activities.

IFC, a member of the World Bank Group, has committed a record $505 million in the last 12 months (fiscal 2011) to enable Vietnamese banks to help local companies increase their import and export activities and create jobs through its Global Trade Finance Program.

The program, since its launch in Vietnam in late 2007, has helped improve the capacity of nine banks to cover the payment risk in granting trade financing to local companies, mostly small and medium enterprises. Under the program, the banks have issued 268 guarantees to support $1 billion in trade finance transactions. Techcombank, an IFC partner since 2007, has been the program’s largest user in Vietnam.

“IFC’s Global Trade Finance Program has helped extend our capacity considerably to deliver trade finance for local importers and exporters over the past few years when trade lines have been limited,” said Do Diem Hong, Executive Vice President and Head of Financial Institutions of Techcombank. “As part of the program’s extensive network of more than 400 participating banks, Techcombank will be recognized globally and this will further strengthen our international transactions.”

This year Lien Viet Bank, Orient Commercial Bank, Tien Phong Bank, and Vietnam International Bank joined the program. IFC’s other partner banks in Vietnam are An Binh Bank, Asia Commercial Bank, Saigon Thuong Tin Commercial Bank and Vietnam Export Import Commercial Bank.

“By complementing banks’ capacity to deliver trade finance solutions, IFC has helped ensure continued trade flows vital to enterprise growth despite liquidity constraints,” said Simon Andrews, IFC Regional Manager for Vietnam, Cambodia, Lao PDR, and Thailand. “IFC’s partnership has also helped banks attract more trade lines from other foreign banks.”

Started in 2005, IFC’s Global Trade Finance Program has issued more than 9,650 guarantees to support more than $16 billion in trade finance transactions in emerging markets. The program extends and complements the capacity of banks to deliver trade finance for importers and exporters on a per-transaction basis in markets where trade lines may be limited. Through the program, IFC provides coverage for more than 210 issuing banks in more than 89 emerging markets and has a network of more than 400 participating banks worldwide.