Representatives of IFC and OCB at the signing of the loan agreement (Photo: VOV)

IFC provides USD 40 million for the Orient Commercial Bank (OCB) to support COVID-hit clients, especially small and medium enterprises (SMEs).

This one-year renewable loan will offer OCB additional liquidity to lend to businesses as it is offering payment relief to its borrowers at the same time, VOV reported. 

OCB will prioritize clients working in sectors which face direct impact of Covid-19 such as tourism and manufacturing and those related to disease response activities. 

“Our experience from the past shocks, including the global financial crisis in 2008, has taught us that micro, small and medium enterprises are impacted by the current crisis. Keeping them solvent is therefore key to saving jobs and limiting the economic damage“, said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Laos.

IFC (Photo: IFC)

He noted that the IFC’s support to OCB will not only aid the bank to extend payment relief to clients but also enable it to offer new loans to SMEs, supporting continued operations and preserving jobs, thereby accelerating Vietnam’s economic recovery. 

Nguyen Dinh Tung, CEO of OCB, said that the bank is reviewing and adjusting its credit programmes to make them more suitable for the current situation while continuing the implementation of preferential policies for firms to access capital and restore operation, thus helping with the recovery of the national economy, according to Dealstreet Asia. 

VP Bank (Photo: Vietnam Biz)

Both VPBank and OCB are serving as clients of IFC. The World Bank’s investment extended USD 212.5 million financing package to VPBank in January in 2020 and USD 100 million funding to OCB earlier.  

A recent survey by the Vietnam General Statistics Office showed that around 90 percent of local SMEs and 92 percent of micro-businesses were hit hard by the global health crisis. 

Vietnam achieved its initial success in containing the pandemic with the nationwide lockdown being removed in late April. However, Covid-19 invaded Vietnam again two weeks ago with increasing local transmission.