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IFC-led Commitment of $185 Million in VIB to Develop SMEs, Strengthen Housing Segment

Hanoi, November 15, 2017 —IFC, a member of the World Bank Group, is providing Vietnam International Commercial Joint Stock Bank (VIB) with a $185 million syndicated loan. The IFC-led financing package aims to address two key development challenges in Vietnam — the financing gap faced by micro, and small and medium enterprises (SMEs), and lack of affordable housing.  
Of about 600,000 formal active SMEs, only 30 percent could access bank capital with the total loan amount accounting for just three percent of the banks’ portfolio. As Vietnam aims to emerge as a manufacturing and commercial hub in South East Asia, long-term funding for SMEs is becoming more critical. Also, the rapid urbanization is creating new demand for housing in major cities, with estimated needs of 374,000 additional units in cities annually.
Given the scenario, IFC’s long-term funding commitment would enable VIB to double its SME and affordable housing portfolios over the next five years, lending more than $1 billion in total.
“The much-needed syndicated funding from IFC and participating banks will help grow VIB’s SME and affordable mortgage portfolios, positioning the bank to become one of the leaders in these segments,” said Han Ngoc Vu, VIB Chief Executive Officer . “The long-term financing is particularly relevant in Vietnam, where debt markets are still nascent, limiting the funding channels and options for financial institutions.”
The five-year financing package comprises $100 million from IFC’s own account and $85 million from three international lenders including Cathay United Bank Co. Ltd, Industrial and Commercial Bank of China Ltd., Hong Kong Branch, and Thailand’s Kiatnakin Bank Public Company Ltd.
This syndicated facility marks a milestone for VIB and other local privately owned banks in Vietnam to access long-term funding from foreign commercial lenders, enabling them to grow longer-term financial products such as residential mortgage lending,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR. “This project will support the country’s key development goals of creating jobs, developing SMEs, and strengthening industrialization and urbanization.”
VIB joined IFC’s Global Trade Finance Program in 2011 and the current trade line of $120 million has enabled it to help local companies increase their import and export activities and create jobs . IFC also advised the bank on SME banking to effectively and sustainably serve the SMEs, one of its strategic segments, going forward.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit
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About VIB
Established in 1996, Vietnam International Commercial Joint Stock Bank (VIB) has now become one of few local banks with the highest credit ranking rated by Moody’s. Currently, VIB owns 160 branches/ transaction offices nationwide and banks with more than 8,000 correspondent banks in 61 countries. The bank has over 4,000 employees serving 1.6 million personal customers and 34,000 corporate customers. Commonwealth Bank of Australia (CBA), VIB’s strategic shareholder, is one of the world’s 10 largest banks by market capitalization, with more than 100 years of history. CBA now owns a 20 percent stake at VIB. Through the capability transfer program, both parties have collaborated closely and efficiently to make VIB the most innovative and customer-centric bank of Vietnam.