IFC, TP Bank boost trade finance for smaller enterprises in Vietnam
(VOV) - The International Finance Corporation (IFC), a member of the World Bank group is providing a trade facility of up to US$10 million to TienPhong Commercial Joint Stock Bank (TPBank) to enhance its support for local enterprises and help boost international trade opportunities, according to an IFC press release on December 17.
The facility, part of IFC’s Global Trade Finance Program (GTFP), will provide TPBank with risk coverage in granting trade financing to local companies, and access to a global network to help grow its trade finance business. The network helps promote transactions in challenging markets, boost competitive financing, and build correspondent bank relationships with new institutions at low risk.
“This trade line helps extend our capacity to meet trade finance demand from small and medium enterprises, one of our main target client groups,” said Nguyen Hung, TPBank’s Chief Executive Officer. “Being part of IFC’s GTFP will help us get recognized by a wider range of correspondent banks globally, and make it easier for us and our clients to complete international transactions. "As IFC is very thorough in partner banks’ appraisal and selection, this IFC’s GTFP line is a “stamp of approval" of TP Bank’s management efforts and strive in improving the bank's operation towards international standards.”
“IFC’s trade finance support to TPBank will enable the country’s small and medium enterprises sector to increase its share of global trade,” said Kyle Kelhofer, IFC’s Country Manager for Vietnam, Cambodia and Lao PDR. “Expanding trade flows is essential for SME growth and will help boost the economy, generate foreign exchange, and create jobs. This investment is also a testament of IFC’s continued commitment to support the strengthening of Vietnam’s banking sector. We look forward to further expand our partnership with TPBank, as well as our entire investment and advisory program in the Vietnam financial sector, to support the country’s economic growth and integration.”
Since the introduction of IFC’s GTFP program in Vietnam in 2007, more than 950 guarantees have been issued by participating banks to support US$4.2 billion worth of trade finance, making Vietnam one of IFC’s top trade finance markets. IFC’s GTFP supports trade in emerging markets by providing partial or full guarantees for individual trade transactions backed by IFC’s triple-A rating.
Since its inception in 2005, the award-winning program has provided over 18,000 trade finance guarantees to support more than US$30 billion worth of trade transactions in emerging markets. The program includes more than 500 bank partners in nearly 100 emerging-market countries.