IFC, HDBank ink strategic cooperation for supporting SME scale-up

The May 11 event took place on the occasion of the visit to the United States of America of Prime Minister Pham Minh Chinh, who is leading the Vietnamese delegation to attend the U.S. – ASEAN Special Summit in Washington D.C.

IFC and HDBank have signed a deal to become strategic partners. Photo courtesy of HDBank

This cooperation is expected to help HDBank build its supply chain finance (SCF) portfolio of $1 billion in the next three years, accordingly growing its SCF portfolio, currently active in construction materials, the agribusinesses sector, fast-moving consumer goods (FMCG) as well as supporting industries and downstream petroleum distribution.

International Finance Corporation (IFC) will assist Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) to design an SCF strategy for the agricultural sector, broaden its SCF products, especially supplier and distributor financing, and bring on board anchor firms along with their suppliers and distributors, among others.

“SCF that links buyers, suppliers, and financial institutions will efficiently support the trade cycles. IFC’s timely support will enable local businesses to leverage emerging trade opportunities and improve their linkages to formal supply chains, contributing to Vietnam’s economic growth,” said Pham Quoc Thanh, HDBank’s CEO.

“It will further help HDBank realize its vision to be among the top banks in the country with a core focus on small and medium enterprise (SME) and retail banking, while emphasizing value chain financing and growing its anchor client base. Also, agriculture chain is an important target industry for us, especially high-tech and green agriculture.”

“Small and medium enterprises are the backbone of the economy and essential to Vietnam’s goal of becoming a manufacturing hub in the region,” said Stephanie von Friedeburg, senior vice president, Operations at IFC.

“IFC’s support of domestic financial institutions like HDBank will contribute to increase SME linkages with the global supply chain and open up opportunities for development and job creation.”

Previously, on April 14, IFC granted HDBank a trade finance limit of $40 million within the framework of Global Trade Finance Program to enhance payment risk guarantee capacity in trade finance for domestic enterprises, mainly SMEs.

In 2021, IFC provided a long-term loan of $70 million to HDBank to support renewable energy business. IFC also subscribed $95 million to international convertible bonds issued by HDBank to support increased lending to micro, small and medium enterprises.

Currently, the total value of commitments and cooperation between IFC and HDBank has reached more than $200 million, set to increase and develop in future.