VP Bank, OCB get $140mln loans from IFC for Covid-19 response

In a statement to media, IFC, a member of the World Bank Group, said the additional financing will help the Vietnamese banks lend more to small private firms disrupted by the Covid-19 pandemic.

As part of its Covid-19 fast-track financing support package, IFC is providing VPBank with $100 million and OCB with $40 million in one-year, renewable senior loans.

The funding will provide VPBank and OCB, IFC’s existing clients, with additional liquidity to continue lending to businesses as these banks are offering payment relief to their borrowers at the same time.

The pandemic has severely impacted Vietnamese businesses including SMEs, a key driver of Vietnam’s economic growth over the past two decades. Guided by the State Bank of Vietnam, VPBank and OCB have taken various relief measures for their SME clients impacted by Covid-19.

IFC is also partnering with international lenders including the Asian Infrastructure Investment Bank to mobilize an additional financing package to further expand VPBank’s lending capacity to local businesses impacted by the pandemic.

AIIB will be co-financing up to $100 million to support VPBank’s trade finance and working capital finance to Vietnamese enterprises, including SMEs, during the Covid-19 crisis.

IFC is providing $8 billion in fast-track financing to support private-sector clients during the Covid-19 crisis.

The bulk of IFC’s financing is going to client banking institutions, enabling them to continue to offer trade financing, working capital support, and medium-term financing to companies struggling with disruptions in supply chains, especially SMEs.

“Our experience from past shocks, including the global financial crisis 2008, has taught us that micro, small and medium enterprises are especially impacted by the current crisis. Keeping them solvent is therefore key to saving jobs and limiting the economic damage,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR.

The support to VPBank and OCB is expected to help the banks extend payment relief to clients and enable them to offer new loans to SMEs, supporting continued operations and preserving jobs.

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