Vietinbank secures $120m trade line
Vietinbank secures $120m trade line
The Industrial and Commercial Bank of Viet Nam (VietinBank) and the International Finance Corporation (IFC) signed yesterday a US$120 million trade line agreement.
The deal is set to assist Vietnamese businesses to develop and enhance their imports and exports.
As part of IFC's Global Trade Finance Program (GTFP), this funding will improve VietinBank's capacity to cover payment risk when granting trade financing to local companies, mostly small and medium enterprises.
Since its launch in 2005, more than 500 banks from 150 countries have joined the programme, which aims to promote trade in emerging markets by linking up local financial institutions with major international banks and enable the local lender to offer more competitive financing.
The deputy general director of Vietinbank, Nguyen Duc Thanh, hailed the trade line, saying that it will significantly boost the bank's capacity to deliver trade finance solutions to local importers and exporters.
"Through the programme, Vietinbank will be able to reaffirm its reputation globally, and this will help increase our access to new markets," Thanh said.
Vietinbank is the country's first State-run commercial lender to join the trade finance programme, which was introduced in Viet Nam in 2007.
Since then, more than 570 guarantees have been issued by participating banks to support $2.5 billion worth of trade finance, making Viet Nam one of IFC's top trade finance markets.
In the fiscal year 2012-13 alone, the programme committed a record $800 million to participating banks.
By complementing banks' capacity to deliver trade finance solutions, IFC has helped businesses to maintain their import-export activities and ensure continued trade flows vital to private sector growth despite liquidity constrains, said Nathalie Louat, IFC's senior manager of financial markets in East Asia and the Pacific.
"This shows our commitment to strengthening and fostering the development of Viet Nam's financial markets," Louat added.
A partner of Vietinbank since 2011, IFC has an 8.03 per cent equity stake in the bank. Since then, Vietinbank and IFC have co-operated in many fields. IFC has helped the bank to expand its small and medium enterprises loan portfolio, strengthen its risk management, improve its corporate governance and grow its energy-efficiency financing.
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