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WASHINGTON — The IFC and the Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) signed a memorandum of understanding on May 11 to become strategic partners for helping small and medium enterprises scale up finance and participate in global supply chains, including high-tech agricultural chains.

The signing took place during the visit to the US by Prime Minister Phạm Minh Chính, who is leading a Vietnamese delegation to the US – ASEAN Special Summit in Washington D.C.

The tie-up is expected to help HDBank build a supply chain finance (SCF) portfolio of US$1 billion in the next three years, thereby growing its SCF portfolio – currently active in sectors like construction materials, agribusiness, FMCG, supporting industries, and downstream petroleum distribution. 

The IFC will help it design an SCF strategy for the agricultural sector, broaden its SCF products – especially supplier and distributor financing – and bring on board anchor firms along with their suppliers and distributors, among others.

HDBank CEO Phạm Quốc Thanh said: “SCF that links buyers, suppliers and financial institutions will efficiently support trade cycles. IFC’s timely support will enable local businesses to leverage emerging trade opportunities and improve their linkages to formal supply chains, contributing to Việt Nam’s economic growth.

Stephanie von Friedeburg, senior vice president, operations, IFC, said: “Small and medium enterprises are the backbone of the economy and essential to Việt Nam’s goal of becoming a manufacturing hub in the region.

“IFC’s support to domestic financial institutions such as HDBank will contribute to increasing SMEs’ linkages with global supply chains and open up opportunities for development and job creation.” 

On April 14 the IFC granted HDBank a trade finance limit of $40 million within the framework of the Global Trade Finance Programme to enhance its trade finance payment risk guarantee capacity, mainly for SMEs.

In 2021 it provided a long-term loan of $70 million to HDBank to support renewable energy businesses.

It also bought $95 million worth of international convertible bonds issued by HDBank to support increased lending to micro, small and medium enterprises.

The total value of commitments and cooperation between the IFC and HDBank has exceeded $200 million and is expected to keep increasing. — VNS