IFC offers $185 million credit package to VIB
IFC offers $185 million credit package to VIB
IFC, a member of the World Bank Group, will provide Vietnam International Commercial Joint Stock Bank (VIB) with a US$185 million syndicated loan.
The IFC-led financing package aims to address two key development challenges in Viet Nam — the financing gap faced by micro, and small and medium enterprises (SMEs) and the lack of affordable housing — VIB said in its statement.
Of some 600,000 existing SMEs, only 30 per cent could access bank capital, with the total loan amount accounting for just 3 per cent of the banks’ portfolio.
As Viet Nam aims to emerge as a manufacturing and commercial hub in South East Asia, long-term funding for SMEs is becoming more critical. Also, rapid urbanisation is creating new demand for housing in major cities, with an estimated need of 374,000 additional units in cities annually, it added.
According to Han Ngoc Vu, VIB chief executive officer, IFC’s long-term funding commitment would enable the bank to double its number of SME clients and affordable mortgage portfolios over the next five years, lending more than $1 billion in total.
“The long-term financing is particularly relevant in Viet Nam, where debt markets are still nascent, limiting the funding channels and options for financial institutions,” Vu said.
The five-year financing package comprises $100 million from IFC’s own account and $85 million from three international lenders -- Cathay United Bank Co Ltd; Industrial and Commercial Bank of China Ltd, Hong Kong branch; and Thailand’s Kiatnakin Bank Public Company Ltd.
Kyle Kelhofer, IFC country manager for Viet Nam, Cambodia and Lao PDR, said this syndicated facility marks a milestone for VIB and other local privately-owned banks in Viet Nam to access long-term funding from foreign commercial lenders, enabling them to develop longer-term financial products such as residential mortgage lending.
VIB joined IFC’s Global Trade Finance Programme in 2011 and the current trade line of $120 million has facilitated it to help local companies increase their import and export activities and create jobs.
