Hanoi, Vietnam, August 15, 2013
—IFC, a member of the World Bank Group, has invested around $805 million in Vietnam during the 2013 fiscal year to help expand lending to small and medium enterprises, create jobs and spur growth as the country’s economy slowed and companies found it challenging to obtain financing.
Vietnam’s economy is experiencing its longest spell of slow growth since the onset of economic reforms in the late-1980s, growing just 5 percent in the second quarter from the same period last year. Many enterprises have cited high borrowing costs as a key factor in shutting down or declaring bankruptcies. To improve access to finance, IFC’s Global Trade Finance Program has helped Vietnamese banks increase lending to local exporters and importers, facilitating cross-border trade that is vital to private sector growth.
During the 2013 fiscal year, which ended on June 30, IFC’s trade finance program enabled participating banks to issue 155 guarantees to support more than $800 million in trade finance, making Vietnam one of IFC’s top markets in this field.
“After operating in Vietnam for more than 15 years, we have confidence in the country’s long-term economic prospects and have remained fully committed to supporting its growth during difficult periods,” said Karin Finkelston, IFC Vice President for Asia Pacific. “Looking forward, we will focus our efforts on helping accelerate necessary structural reforms in the state-owned enterprises and in the banking sector, in order to see Vietnam’s economy maintain its competitiveness and return to more robust economic growth.”
With its global expertise, IFC will help banks improve their ability to manage and recover non-performing loans as well as achieve international standards of risk management and corporate governance. This will help them run more efficiently so that the private sector, particularly small and medium enterprises, can get financing at a lower cost.
To promote low-carbon economic growth, IFC ramped up efforts to improve energy efficiency in Vietnam’s industries. With IFC’s financial and advisory support, two Vietnamese lenders – Techcombank and VietinBank – have increased their lending to energy-efficiency projects to more than $60 million over the last three years. IFC is also supporting the Ministry of Construction in revising the Building Energy Efficiency Code that aims to reduce up to 15 percent of energy consumption per square meter in new buildings.
IFC’s total investments in East Asia Pacific reached a record $3.4 billion in 83 projects during the 2013 fiscal year, up around 15 percent from the previous fiscal year. Vietnam ranked second after China in terms of IFC investment volume in East Asia Pacific.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
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