Ho Chi Minh City, March 27, 2019—IFC,
a member of the World Bank Group, is providing a loan of $100 million to
Vietnam’s Orient Commercial Joint Stock Bank (OCB). The IFC-led financing
package, combined with advisory services, will boost lending to small and
medium enterprises (SMEs), especially women-owned or led ones, and will
promote supply chain finance in Vietnam.
Comprising 98 percent of Vietnam’s total enterprises, SMEs are the primary
engine of job creation in Vietnam, employing more than half of the labor
force and contributing about 40 percent to the gross domestic product.
Yet, around 60 percent of SMEs have unmet financing needs—a $21 billion
financing gap. Access to finance is therefore key to unlock the potential
The long-term financing package comprises $57.16 million from IFC’s own
account and $42.84 million from the multi-investor Managed Co-Lending Portfolio
Program (MCPP) managed by IFC. Notably, OCB aims to use at least 50 percent
of the loan proceeds to finance WSMEs, with support from the Women Entrepreneurs
Finance Initiative (We-Fi)—a collaborative multi-stakeholder partnership
aimed at addressing financial and non-financial constraints faced by WSMEs
in developing countries.
“OCB sees SMEs as an important target segment to realize its strategy
to become a leading retail and SME bank in Vietnam. IFC’s financing package
helps reinforce the bank’s continued commitment to expanding lending to
this segment, enabling SMEs to further grow and improve their performance
in the context of increased competition,” said Nguyen Dinh Tung, OCB Chief
This project is the first investment IFC will make in a commercial bank
under its partnership with We-Fi. We-Fi’s ambition to help expand financial
and market access to women will be realized through a performance-based
incentive that will help catalyze at least $50 million in loans to women
In addition to funding, in partnership with the Swiss State Secretariat
for Economic Affairs (SECO), IFC will help OCB develop its supply chain
finance (SCF) business. While Vietnam is an export driven economy, currently
few local banks offer a full range of supply-chain financial services to
smaller businesses. With IFC’s support, OCB will develop a supply chain
finance electronic platform to support the financing of commercial transactions
in a transparent and efficient manner.
“Switzerland supports this private sector-led initiative on supply chain
finance because it offers an innovative solution to address the longstanding
challenge of access to finance for Vietnamese SMEs. It complements other
instruments in the framework of Switzerland’s support to the private sector.
All Swiss initiatives aim at increasing productivity and competitiveness
of SMEs in Vietnam,” said Marcel Reymond, Head of Cooperation, Embassy
of Switzerland in Vietnam.
IFC has provided to date more than $400 million in financing for women
entrepreneurs in Vietnam. The country is one of the three biggest markets
of the IFC’s gender finance program.
“This financing package with its large mobilization component
is expected to have a catalytic impact for gender finance in the Vietnamese
banking sector, which is at a critical juncture of mobilizing long-term
private funding to support the country’s crucial goals of developing SMEs
and accelerating economic growth,” said Vivek Pathak, IFC Regional Director
for East Asia and the Pacific. “We share OCB’s vision to become a specialized
SME and retail bank in Vietnam by exploring new opportunities and deploying
innovative solutions to better address SMEs’ financing needs.”
IFC and OCB’s partnership started in 2011 with a trade finance guarantee
of $20 million under IFC’s Global Trade Finance Program. IFC provided
additional financing with a $25 million loan in March 2012 and a revolving
short-term liquidity of $10 million. This partnership allowed the bank
to increase financing to more small and medium enterprises and women-owned
businesses and help more local companies increase trade and create employment
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In fiscal year 2018, we delivered more
than $23 billion in long-term financing for developing countries, leveraging
the power of the private sector to end extreme poverty and boost shared
prosperity. For more information, visit www.ifc.org
Orient Commercial Joint Stock Bank is a commercial
bank established in 1996. Currently, OCB has 130 transaction points along
Vietnam with total asset as at the end of 2018 more than $4.2 billion equivalent.
Effectiveness, sustainability, risk management with the application of
international standards are top concerns in OCB’s operation. In December
2018, OCB was recognized to have met with Basel II requirements by the
State Bank of Vietnam. For more information, visit ocb.com.vn.
Entrepreneurs Finance Initiative
(We-Fi) is a collaborative partnership
among the 14 governments that have made financial contributions, eight
multilateral development banks that serve as implementing partners, and
other public and private stakeholders. We-Fi was formally established in
October 2017 as a Financial Intermediary Fund hosted by the World Bank.
We-Fi invests in programs and projects that help unlock billions of dollars
in financing to address the full range of barriers facing women entrepreneurs—increasing
access to finance, markets, technology, and mentoring, while strengthening
policy, legal and regulatory frameworks. As one of the We-Fi Implementing
Partners, IFC supports private sector clients with investment and advisory
services to expand financial services and market access for women-owned/led
firms, as well as increasing the capacity of women entrepreneurs to run
high-growth businesses. For more information, visit www.we-fi.org.
The Swiss State Secretariat for Economic Affairs
(SECO) represents the Swiss Confederation’s center of expertise for all
core economic policy issues, including Switzerland’s economic development
cooperation. SECO’s mandate is to enable sustainable and inclusive economic
growth. For SECO, growth is sustainable if it creates jobs, helps to increase
productivity, to reduce poverty, inequalities and global risks. It is our
aim to contribute to sustained economic growth, high employment and fair
working conditions, by creating the necessary regulatory framework conditions
and through promoting private sector engagement. Our strategy is to help
integrate partner countries into the global economy and enhance their competitive
position. For more information, visit https://www.seco-cooperation.admin.ch/secocoop/en/home.html.