Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) and the International Finance Corporation (IFC) have recently collaborated to provide $150 million supply chain financing for coffee-exporting companies in Vietnam.

VPBank said in a statement on Friday that the funding is part of an effort to help Vietnam’s small and medium enterprises (SMEs) better integrate into the global agricultural supply chain.

The funding, equally contributed by the bank and IFC, marks the first supply chain co-financing program between IFC and a local commercial bank in Vietnam.

The program is expected to initially channel direct capital to coffee exporters, and later expand to other sectors, thereby enhancing private sector access to the global
agricultural supply chain.

It is noted that each organization brings unique strengths to the collaboration, benefiting the business community through their joint supply chain financing efforts.

VPBank, with its long-standing experience serving SME customers, offers coffee SMEs with preferential financing packages with favorable interest rates and credit conditions.

Additionally, VPBank supports business connections through its extensive customer network.

IFC, as an international organization with presence in more than 100 countries, will help connecting local suppliers and large buyers, including major coffee and agriculture importers with strong financial capacity, extensive networks and efficient supply chain management processes.

Additionally, IFC will advise local suppliers and large buyers on sustainable finance frameworks, sustainable supply chain financing activities, and trends in green agriculture.

This includes information on green agriculture certificates that meet the standards of major import markets in Europe and America.

Notably, the financing under this supply chain finance program will be conducted through VPBank’s digital banking platform, while activities to facilitate connection and
communication between importer and exporter, both domestically and internationally, will be implemented on the bank’s online supply chain finance platform.

This is to ensure seamless experiences for customers.

As coffee remains Vietnam’s primary agricultural export, with export turnover exceeding $4 billion in the past two years, the trade finance collaboration between VPBank and IFC is expected to facilitate the working capital needs of coffee enterprises.

It will also assist local companies in meeting stringent standards for product quality, environmental and social factors and sustainable development set by Vietnam’s major import markets such as Europe, America, and Japan.

According to the report entitled “Trade Finance in the Mekong Region” published by IFC and World Trade Organization (WTO) in early 2024, increasing trade coverage with reasonable borrowing cost can boost Vietnam’s import and export turnover by 6 percent and 9 percent respectively, corresponding to an annual increase in merchandise trade of $55 billion.

Thus, cooperation with international organizations like IFC plays a crucial role in enhancing the capital and technical capabilities for Vietnamese enterprises participating in the global value chain.

Leader Energy secures $23M loan from HSBC to support solar projects in Vietnam