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IFC Partners with Vietnam Prosperity Bank to Increase Lending to Small Businesses and Women-Owned SMEs

Hanoi, Vietnam, September 8, 2016—IFC, a member of the World Bank Group, is providing a $50 million syndicated loan to Vietnam Prosperity Joint Stock Commercial Bank (VPBank) to expand lending to small and medium enterprises (SMEs), especially women-owned ones. The loan is the first phase of a up to $125 million financing package that will help the bank enhance its support for local enterprises and boost international trade opportunities.

Twenty five percent of the funding will be exclusively earmarked to women-owned SMEs, coming from the Women Entrepreneurs Opportunity Facility, a new global facility dedicated to expanding access to capital for women entrepreneurs. The WEOF was launched by IFC’s Banking on Women program and Goldman Sachs’ 10,000 Women in 2014. The facility aims to help close the credit gap for women-owned enterprises around the world.

IFC’s investment is expected to help VPBank increase its loan portfolio for SMEs to more than $1 billion, with more than $160 million for women-owned SMEs in Vietnam by 2020. The syndication loan comprises $25 million from IFC’s own account and another $25 million from Cathay United Bank.

“Small and medium enterprises are the focal segment of VPBank’s strategy to become a leading retail bank in Vietnam,” said Nguyen Duc Vinh, VPBank Chief Executive Officer. “The financial package will help accelerate the realization of this ambitious target and bring practical benefits to our customers. IFC’s investment also reaffirms VPBank’s operational efficiency and transparency in local financial markets.”  

SMEs are seen as a key driver of Vietnam’s economic growth over the past two decades. However, access to finance is a major obstacle to their business growth and expansion, as only about 30 percent of enterprises have access to formal financial services.

“Enhancing VPBank’s lending capacity underscores IFC’s long-term commitment to fostering the development of Vietnamese financial markets and individual banks,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR. “Expanding access to finance and trade flows is essential for SME growth and will help grow the economy and create jobs.”

“Access to capital is a major obstacle to growth for women entrepreneurs,” said Noa Meyer, Managing Director and Global Head of Goldman Sachs 10,000 Women. “Goldman Sachs research shows that closing this gender credit gap could increase per capita income by around 25 percent in Vietnam by 2030. This new loan to VPBank will place more capital in the hands of women entrepreneurs in Vietnam who will drive future economic growth and job creation.”

This new partnership deepens Goldman Sachs’ 10,000 Women’s commitment to women entrepreneurs. Since 2008, 10,000 Women has provided business and management training to over 10,000 women around the world. Globally, eighteen months after completing the training program, nearly 70 percent of participants have reported increases in revenue and nearly 60 percent have added new jobs.

In addition to the $50 million syndication loan, IFC has also extended a $25 million trade guarantee line under its Global Trade Finance Program (GTFP) to VPBank. This trade facility will boost VPBank’s capacity to provide financing for importers and exporters. Since the introduction of IFC’s GTFP in Vietnam in 2007, which provides partial or full guarantees for individual trade transactions, more than 950 guarantees have been issued by participating banks to support $4.2 billion worth of trade finance, making Vietnam one of IFC’s top trade-finance markets. The program includes more than 500 bank partners in nearly 100 emerging-market countries. 

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