08:28 | 07/04/2019 Economy
The International Finance Corporation (IFC) will lend $100 million to Orient Commercial Joint Stock Bank (OCB) towards extending credit to SMEs.
|OCB aims to use at least 50 percent of this loan to finance women-owned or managed SMEs - Photo by VnExpress|
The long-term financial package provided by IFC, a World Bank affiliate, will comprise $57.16 million from its own capital, and another $42.84 million raised from other sponsors through the corporation’s Managed Co-Lending Portfolio Program.
OCB aims to use at least 50 percent of this loan to finance women-owned or managed SMEs, with support from the World Bank’s Women Entrepreneurs Finance Initiative (We-Fi).
We-Fi is a multi-government and bank partnership aimed at unlock financing for women-led/owned businesses in developing countries.
An IFC announcement Wednesday morning said it would also provide consultancy services alongside the finance package, facilitating OCB in providing loans to small and medium enterprises (SMEs).
In addition, the IFC will help the local bank develop supply chain financing, which involves lending to SMEs without collateral.
According to the IFC, SMEs account for 98 percent of total enterprises in Vietnam. This is the main source of job creation in Vietnam, employing more than half of the workforce and contributing about 40 percent of the country's GDP.
However, about 60 percent of SMEs face a shortage of capital, which the credit institution estimates at $21 billion. Access to finance, according to IFC, is the key to unlocking the potential of SMEs.
According to the Vietnam Chamber of Commerce and Industry (VCCI), only 30 percent of SMEs in Vietnam have access to loans from the formal sector, with the rest having to use their own funds or depend on unregulated, informal loans.