A leading official from the International Finance Corporation (IFC) of the World Bank Group has affirmed that the IFC has confidence in Vietnam’s long-term economic prospects and commits to supporting its growth during difficult times.
IFC Vice President for Asia Pacific Karin Finkeiston made the remark at an annual press conference held in Hanoi on August 15 to announce the outcomes of the IFC’s operations during the 2013 fiscal year (July 2012-June 2013).
“Looking forwards, we will focus our efforts on helping accelerate necessary structural reforms, particularly in the banking sector, in order to see Vietnam return to more robust economic growth,” Finkeiston stressed.
The IFC has invested around US$805 million in Vietnam during the fiscal year to help expand lending to small and medium-sized businesses, generate jobs, and spur growth as the country’s economy slowed and companies found it difficult to get financing, IFC Regional Director Simon Andrews reported.
Vietnam’s economy is experiencing its longest spell of slow growth since the onset of economic reforms in the late 1980s, growing a mere 5% in the second quarter from the same period last year. Many enterprises have cited high borrowing costs as a key factor behind closures and bankruptcies.
In response, the IFC’s Global Trade Finance Programme has helped Vietnamese banks improve access to finance by increasing lending for local exporters and importers, thus facilitating cross-border trade that is vital to private sector growth.
During the 2013 fiscal year, which ended on June 30, the IFC’s trade finance programme enabled participating banks to issue 155 guarantees worth US$800 million, making Vietnam one of the institution’s top markets in trade finance.
The IFC’s total investments in East Asia Pacific reached a record US$3.4 billion in 83 projects for the whole period, up around 15% on an annual basis. Vietnam ranked second after China in terms of IFC investment volume in the region.
Andrews also revealed that his corporation will help banks improve their management ability, recover bad debts, and achieve international standards in risk management and corporate governance.
The moves will help banks run more efficiently so that the private sector, particularly small and medium-sized enterprises, is able to get financing at a lower cost, Andrews added.