WASHINGTON, D.C., June 16, 1998 --- The International Finance Corporation has approved its first financing to a local private company in Vietnam, with a loan of US$300,000 to Vinh Phat Company Limited, a garment manufacturer and exporter. The financing, which will support the company’s expansion program, will increase production in the firm, and bolster Vietnam's exports as well as employment.
Vinh Phat is undertaking a US$645,000 expansion program in response to current and projected demand increases. Under this program, the company will raise its output from 170,000 to 300,000 cut-make trim units per year by enlarging production space, improving facilities, and purchasing additional production equipment. The company will also implement measures to enhance productivity.
Mr. Javed Hamid, IFC’s Asia I Director, noted the established reputation of the Vietnamese garment sector among international retailers, and the particular flexibility of Vinh Phat to meet improved quality and production standards that accompany increased demand. Mr. Hamid said that IFC’s loan will help the company to increase its exports and create new employment. It provides a good model for future Mekong Financing Line (MFL) investments, he added. MFL is a US$5 million facility, which enables IFC to lend to and make investments in small and medium-sized enterprises (SMEs) in Vietnam, Cambodia, and Lao PDR.
The Vinh Phat project was developed with the assistance of the Mekong Project Development Facility (MPDF), which provides business planning assistance and training to private firms in Vietnam, Cambodia, and Lao PDR. Headquartered in Vietnam, MPDF is managed by IFC and funded by IFC and several bilateral and multilateral donors.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets and providing technical assistance and advice to governments and businesses.
