VPBank and IFC to offer $150 million to coffee exporters
VPBank and IFC to offer $150 million to coffee exporters
A major Vietnamese bank and the International Finance Corporation (IFC) have collaborated to provide $150 million in supply chain financing for coffee-exporting companies in Vietnam.
VPBank announced on July 12 that the funding is part of an effort to help Vietnam’s small- and medium-sized enterprises (SMEs) better integrate into the global agricultural supply chain. This marks the first supply chain co-financing scheme between IFC and a local commercial bank in Vietnam.
The initiative is expected to channel direct capital to coffee exporters initially, and later expand to other sectors, thereby enhancing private sector access to the global agricultural supply chain.
VPBank, with its long-standing experience serving customers is the SME sector, offers coffee exporters preferential financing packages with favourable interest rates and credit conditions. Additionally, VPBank supports business connections through its extensive customer network.
Meanwhile, IFC, as an international organisation with a presence in more than 100 countries, helps connect local suppliers with large buyers, including major coffee and agriculture importers with strong financial capacity, extensive networks, and efficient supply chain management processes.
Additionally, IFC will advise local suppliers and large buyers on sustainable finance frameworks, sustainable supply chain financing activities, and trends in green agriculture. This includes information on green agriculture certificates that meet the standards of major import markets in Europe, the United States, and Japan.
The financing under this supply chain finance programme will be conducted through VPBank’s digital banking platform, while activities to facilitate connection and communication between importers and exporters, domestically and internationally, will be implemented on the bank’s online supply chain finance platform.
As coffee remains one of Vietnam’s primary agricultural exports, with export turnover exceeding $4 billion in the past two years, the trade finance collaboration between VPBank and IFC is expected to facilitate the working capital needs of coffee enterprises.
It will also assist local companies in meeting stringent standards for product quality, environmental and social factors and sustainable development set by Vietnam’s major import markets.
According to a report published by IFC and World Trade Organization earlier this year, increased trade coverage with reasonable borrowing costs could boost Vietnam’s import and export turnover by 6 per cent and 9 per cent respectively, corresponding to an annual increase in trade of $55 billion.
