The Vietnam Joint Stock Commerical Bank for Industry and Trade (VietinBank) and the International Finance Organisation (IFC) have signed a US$120 million trade agreement to help Vietnamese businesses enhance their imports and exports.
The agreement is within the framework of the IFC’s Global Trade Finance Program (GTFP), which is being implemented in over 150 countries through more than 500 banks.
It will help promote trade in newly emerging markets through linking local financial organisations with international banks and create conditions for these organisations to supply competitive trade finance services.
The programme will help VietinBank to cover payment risk when granting trade financing to local small and medium-sized enterprises.
In his speech at the signing ceremony on July 5, Nguyen Van Thang, VietinBank Director General, said the capital will facilitate domestic business activities.
Since its launch in Vietnam in 2007, the program has issued more than 570 guarantees for banks worth US$2.5 billion, making the country one of IFC’s top trade finance markets.
In the 2013 fiscal year, it has committed to the provision of US$800 million – a record high guarantee for banks.
Nathalie Louat, IFC’s senior manager of financial markets in East Asia and the Pacific, said by supporting banks’ capacity to deliver trade finance solutions, IFC has helped businesses to maintain their import-export activities and contribute to ensuring stable growth despite having liquidity difficulties.
As VietinBank’s strategic partner since 2011, IFC currently holds 8.03% of the bank’s equity stake.