IFC and HDBank scale up finance for SMEs

May 12, 2022 | 11:59
(0) user say
On May 11, the IFC and Ho Chi Minh City Development JSC Bank (HDBank) signed an MoU to become strategic partners, supporting small- and medium-sized enterprises (SME) to scale up finance and participate in global supply chains, including high-tech agriculture.
IFC and HDBank scale up finance for SMEs
Representatives at the signing ceremony

The event took place during Prime Minister Pham Minh Chinh's visit to the US leading the Vietnamese delegation to attend the US-ASEAN Special Summit in Washington DC.

This cooperation is expected to help HDBank build its supply chain finance (SCF) portfolio to $1 billion in the next 3 years. It is currently active in construction materials, agribusinesses, fast-moving consumer goods, and petroleum distribution.

The IFC will assist HDBank to design an SCF strategy for the agricultural sector, broaden its SCF products – especially supplier and distributor financing – and bring onboard anchor firms along with their suppliers and distributors.

Pham Quoc Thanh, HDBank’s CEO said, “SCF that links buyers, suppliers, and financial institutions will efficiently support the trade cycles. The IFC’s timely support will enable local businesses to leverage emerging trade opportunities and improve their linkages to formal supply chains, contributing to Vietnam’s economic growth.”

Stephanie von Friedeburg, senior vice president of operations at the IFC stated, “SMEs are the backbone of the economy and are essential to Vietnam’s goal of becoming a manufacturing hub in the region. The IFC’s support for domestic financial institutions such as HDBank will contribute to increasing their linkages with the global supply chains and open up opportunities for development and job creation.”

Previously, on April 14, the IFC granted HDBank a trade finance limit of $40 million within the framework of the Global Trade Finance Program to enhance payment risk guarantee capacity for domestic enterprises.

In 2021, the IFC provided a long-term loan of $70 million to HDBank to support renewable energy businesses. It also channelled $95 million to international convertible bonds issued by HDBank to support increased lending to micro, small, and medium-sized enterprises.

Currently, the total value of commitments and cooperation between the IFC and HDBank has reached more than $200 million and will continuously increase and develop in the coming time.

By Mai Dang

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional