IFC finances trade development in Viet Nam amid COVID-19
VGP - Close to 2,000 exporters and importers in Viet Nam have benefitted over the past fiscal year from trade financing from the International Finance Corporation (IFC) designed to help businesses withstand the impacts of COVID-19 and preserve jobs.
IFC’s Global Trade Finance Program (GTFP) has boosted the capacity of six banks in Viet Nam to cover payment risks in granting trade financing to local companies, mostly small and medium enterprises. With IFC’s support, the banks have issued 974 guarantees valued at US$686 million to support exporters and importers.
IFC also provided US$418 million to local suppliers, helping them maintain liquidity given payment term extensions required by buyers. This support came under the IFC Global Trade Supplier Finance program, which provides short-term financing to suppliers exporting to international buyers, by discounting invoices once they are approved by the buyer.
Demand for supply chain finance surged during the pandemic due to the liquidity gap faced by suppliers as a result of disrupted supply chains. In response, IFC increased its financing for Vietnamese garment and agribusiness suppliers by 28 percent in fiscal 2021, allowing 31 companies to sustain operations and securing more than 100,000 jobs.
As in previous crises, IFC’s extensive global experience contributed to maintaining trade flows vital to business operations and to preserving jobs in Viet Nam during the early stage of the COVID-19 pandemic, said Nathalie Louat, IFC Global Director of Trade and Supply Chain Finance
IFC will continue supporting businesses shore up their working capital and increase trade activities as production cycles recover and economies rebuild after the crisis, she added.
IFC,a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.
By Thuy Dung
