|The five-year financing package is likely to improve the Vietnamese banking sector’s competitiveness by promoting a cashless economy via innovation and competition. It is further expected to create and facilitate between 35,000 and 56,000 jobs over the next five years. — VNS Photo|
HÀ NỘI — The International Finance Corporation (IFC) and Tiên Phong Commercial Joint Stock Bank (TPBank) have inked a deal following which the financial arm of the World Bank will provide a syndicated loan of US$100 million to help TPBank extend long-term funding to mirco, small and medium enterprises (MSMEs), and individual borrowers through digital delivery channels.
The five-year financing package is likely to improve the Vietnamese banking sector’s competitiveness by promoting a cashless economy via innovation and competition.
It is further expected to create between 35,000 and 56,000 jobs over the next five years.
Lack of financial access is one of the key challenges for MSMEs, which employ about 77 per cent of Việt Nam’s labour force and contribute to around 41 per cent of the country’s GDP.
According to the IFC, about 70 per cent of MSMEs have financing needs, resulting in a $23.6 billion gap, equivalent to 12 per cent of GDP.
The IFC’s long-term funding commitment will enable TPBank to double its MSME portfolio over the next five years, providing more than $1.8 billion in about 46,000 loans by 2022. Notably, up to 65 per cent of the transactions will be made digitally.
“The much-needed syndicated funding from the IFC and international lenders will help TPBank to implement a long-term digital strategy to capture the digital demographic growth opportunity and increase its reach to the unbanked and under-served segment,” said TPBank CEO Nguyễn Hưng.
“This syndicated facility is expected to have a catalytic impact for the Vietnamese banking sector, which is at a key juncture of mobilising long-term private funding needed to support the country’s key development goals of developing SMEs and creating jobs,” said Kyle Kelhofer, IFC Country Manager for Việt Nam, Cambodia and Laos.
The IFC and TPBank’s partnership started in early 2016 and has expanded over the years, allowing the bank to help more local companies increase trade, generate revenues and create employment opportunities. — VNS