IFC provides credit package for Vietnamese SMEs

The International Finance Corporation (IFC) and Orient Joint Stock Commercial Bank (OCB) on March 27 signed a cooperation agreement on a US$100-million credit package and an advisory program to promote supply chain financing.

Accordingly, IFC will provide OCB with a loan worth $100 million in three-year term. Of which, $57.16 million is from IFC and the rest $42.84 million is from other sponsors via the Managed Co-Lending Portfolio Program (MCPP) managed by IFC.

This medium-and-long-term credit package is expected to help OCB to provide more loans to small-and-medium-sized enterprises (SMEs), especially women-owned or led ones, and will promote supply chain finance in Vietnam.

According to IFC, SMEs accounts for up to 98 percent of total enterprises in Vietnam. They are the main job creators, employing more than half of workforce, contributing about 40 percent to the country’s gross domestic product. However, 60 percent of SMEs have to face with financial crunch, an estimated $21 billion funding gap.

OCB plans to offer loans with preferential interest rate of around 7 percent per annum and interest rate will be kept unchanged for a while to create conditions for SMEs to be financially stabilized.

Up to now, IFC has financed more than $400 million for women-owned or led enterprises in Vietnam.