HÀ NỘI — IFC, a member of the World Bank Group, in partnership with Vietnam Prosperity Commercial Joint Stock Bank (VPBank) is extending a commodity financing facility of up to US$50 million to Tân Long Group Joint Stock Company in order to unlock further agri-financing opportunities in this high-potential sector.

This commodity financing support helps Tân Long Group, one of Việt Nam’s leading traders in agricultural products, diversify procurement of agri-commodities. It is also part of IFC’s Global Warehouse Finance Programme (GWFP) that increases available financing to agricultural producers and traders in the countries where agriculture plays an important role in the economy such as Việt Nam.

Underpinning the deal is a 50:50 risk-sharing partnership between IFC and VPBank, with each assuming liability for up to $25 million on an unfunded basis covering half of every eligible transaction under the facility.

“Diversifying trade finance products will help realise VPBank’s strategy of becoming a leading bank in supporting enterprises over the next five years, with supporting local importers and exporters as a pillar,” said Đinh Văn Nho, VPBank’s deputy chief executive officer cum head of Corporate Banking Division.

This partnership is expected to have a significant development impact on the animal protein value chain in Việt Nam — an increasingly important sector in the country — as it will enable Tân Long Group to procure, store and distribute raw materials more effectively and efficiently.

“Việt Nam’s agriculture sector is at a turning point, with growth increasingly leveraging increased efficiency, diversification and value-addition. These types of partnerships with VPBank and Tân Long Group are key steps to enhance the competitiveness of the agribusiness value chain in Việt Nam,” said Kyle Kelhofer, IFC Country Manager for Việt Nam, Cambodia and Lao PDR.

GWFP supports the agriculture sector by providing banks with liquidity or risk coverage backed by warehouse receipts, which can be used to provide financing in the form of short-term loans or guarantees to agricultural producers and traders. To date, the GWFP has supported more than $6 billion in global trade and more than 750,000 farmers in 66 emerging market countries. — VNS