Vietnam's Orient Commercial Joint Stock Bank (OCB) has just secured a substantial loan of $100 million from the prestigious International Finance Corporation (IFC).
This remarkable financial agreement, set to span over a five-year term, aims to bolster OCB's lending portfolio specifically for small and medium-sized enterprises (SMEs). The significance of this loan cannot be overstated, especially given the prevailing economic challenges faced by both the global and Vietnamese markets.
OCB's leadership expressed their elation, saying, "This news is a cause for celebration not only for OCB but also for our valued customers amidst the arduous economic landscape. This capital infusion will empower OCB's SME clientele by granting them access to loans with favourable interest rates, thereby facilitating investment and fostering business expansion in the current phase of economic growth."
Thomas Jacobs, IFC country director for Vietnam, Cambodia, and Laos, underscored the importance of credit availability for SMEs, especially during times of global economic uncertainty.
"SMEs are crucial agents for recovery, growth, job creation, and innovative initiatives. Against the backdrop of lingering global economic uncertainties, this new loan strengthens the collaboration between IFC and OCB, enabling the bank to realise its vision of becoming a premier retail bank that caters to the needs of SMEs in Vietnam," he said.
OCB has been actively implementing an array of policies and programmes aimed at benefiting their SME clientele.
Notably, they have launched a favorable interest rate package of VND1 trillion, which will remain in effect until June 30, 2023. This exceptional initiative offers substantial interest rate reductions of up to 2 per cent per year for short-term loans and up to 1.5 per cent per year for medium to long-term loans, significantly outperforming the prevailing market rates for OCB's SME borrowers.
Customers who have never availed themselves of OCB's financial services or have settled all previous loans with the bank at least three months before the credit approval are eligible to enjoy interest rates as low as 7.99 per cent per year for short-term loans and 10.49 per cent per year for medium to long-term loans.
Furthermore, OCB is proactively implementing programmes that extend beyond traditional collateral-based loans. The bank is committed to credit restructuring for struggling enterprises, providing temporary financial relief by easing the burden of principal and interest repayments.
Looking ahead, OCB has plans to launch additional programmes tailored to industries that have faced significant challenges in recent years yet are currently experiencing robust recoveries. These industries include the tourism sector (comprising hotels and restaurants) as well as logistics and construction services.
Emphasising their commitment to cutting-edge risk management practices, the OCB has prioritised investments in advanced technologies. The OCB is poised to remain at the forefront of institutions implementing the Basel III framework by 2022.
Notably, the OCB recently became the first bank in Vietnam to fulfill all advanced risk management requirements outlined by Basel standards in terms of cloud-based capital calculation platforms under the Internal Ratings-Based approach.
In addition, it has embarked on a groundbreaking collaboration with IBM and Seatech to launch a pioneering project focused on monitoring, detecting, and managing fraud in their digital multichannel banking operations.
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By Trung Duong