HANOI, VIETNAM, Feb. 27—The United Kingdom today signed an agreement to provide financial support of GBP1.5 million (US$2.4 million equivalent) to the Mekong Project Development Facility (MPDF), an IFC-managed technical assistance facility promoting small- and medium-sized enterprises (SMEs) in Vietnam, Lao PDR, and Cambodia. The U.K. joins six other donor countries — Australia, Finland, Japan, Norway, Sweden, Switzerland — and the European Union in approving funding for MPDF.
Mr. David Fall, the U.K.'s Ambassador to Vietnam, said at the signing in Hanoi, "The British Government considers that the growth of SMEs is essential if Vietnam is to share in the economic prosperity and improved living standards of the Southeast Asian region."
Mr. Thomas Davenport, Manager of MPDF, responded, "We very much appreciate British support to MPDF because it is an indication of strong donor confidence. It will broaden our developmental activities with SMEs and promote a stronger environment for the indigenous private sector. We believe that SMEs are the backbone of an economy and play a vital role in generating jobs and distributing the benefits of development more equitably."
MPDF's mandate is to help SMEs to expand, establish new operations, and restructure or privatize by assisting in the development of bankable proposals. It also undertakes training and capacity building. During its five-year term, MPDF anticipates having a total budget of US$25 million. IFC has also extended US$5 million in seed capital to SMEs through the Mekong Financing Line to help mobilize additional capital and complement MPDF's technical assistance in strengthening local private sectors.
MPDF, which began operations last year in Hanoi and Ho Chi Minh City, also has a small office in Phnom Penh and will be opening another in Vientiane.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries. Along with other donors, the Corporation has set up facilities, similar to MPDF, offering technical assistance and advisory services for small business development in Africa, Eastern Europe, and the South Pacific.
Since 1994, the U.K. has been a major donor to IFC's technical assistance programmes, contributing a total of about GBP 32.7 million (US$51.5 million equivalent).
