IFC raises trade finance limit for 4 Vietnamese bank to $294m amid virus fears

The spread of coronavirus has caused business disruptions in Vietnam since the first case was announced in late January. Apart from a fall in tourism and associated services, the epidemic has affected cross-border trade impacting manufacturing, agribusiness and other sectors, IFC said in a statement.

Commercial banks including An Binh Commercial Joint Stock Bank, TienPhong Commercial Joint Stock Bank, Vietnam International Commercial Joint Stock Bank, and Vietnam Prosperity Joint Stock Commercial Bank receive benefit from the policy.

The increased total limit of $294 million will enable those banks to improve their capacity to cover payment risk in granting trade financing to local companies, mostly small and medium enterprises.

“VIB welcomes this timely and meaningful initiative to cope with possible liquidity constraints and de-risking trends during this challenging period,” said Han Ngoc Vu, CEO and member of the board of directors of Vietnam International Commercial Joint Stock Bank.

This initiative complements the State Bank of Vietnam’s call to financial institutions to support local businesses, which may be affected by the coronavirus outbreak — particularly those in trade and supply chain linkages.

“IFC’s initiative, an effective response to help ensure resiliency, shows our confidence in our local partner banks as well as our commitment to strengthen Vietnam’s economy,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR.