SHB and IFC signed the agreement for SHB to participate in the IFC’s Global Trade Finance Program (GTFP). — Photo courtesy of the bank

Sài Gòn – Hà Nội Commercial Joint Stock Bank (SHB) and the International Finance Corporation (IFC) have signed an agreement for SHB to participate in the IFC’s Global Trade Finance Programme (GTFP).

According to the agreement, SHB will participate in GTFP as the issuing bank with an initial trade finance guarantee limit granted by IFC of up to $75 million.

GTFP is a factoring programme for banks from developing countries. GTFP provides full or partial guarantees to help banks deal with risks associated with trade settlement processes in emerging markets. Guarantees are issued for all private sector commercial transactions that meet IFC criteria.

Participating in GTFP will help SHB expand its global partner banking network, while contributing to promoting trade growth and supporting the import-export activities of domestic businesses.

Speaking at the signing ceremony, Ngô Thu Hà – SHB’s CEO, said: “SHB has been implementing many programmes to accompany and support businesses, especially import-export enterprises, small and medium enterprises (SMEs), and women-led businesses, directing credit flows to green projects, bringing positive impacts to the environment and society.

"We welcome meaningful programmes like GTFP to help businesses proactively deal with liquidity difficulties as well as risk mitigation. At the same time, the programme will also help the bank significantly increase trade finance for many import-export companies, especially during a period when economies around the world face many fluctuations.”

Thomas Jacobs, IFC Country Director for Việt Nam, Cambodia and Laos, said: “Trade is a growth engine that creates better jobs, reduces poverty and increases economic opportunity. IFC’s $75-million trade finance facility will enhance SHB’s capacity to deliver trade finance solutions to serve local businesses, especially SMEs, and help them withstand the impacts of ongoing crises, boosting trade and easing liquidity constraints.”

Earlier, in March 2023, SHB and IFC signed a credit agreement for a loan worth $40 million – the first tranche of a total expected loan package of $120 million from IFC, with a tenor of three years. The loan is intended to support SHB in developing a small and medium-sized enterprise (SME) loan portfolio, including women-led businesses and businesses participating in the supply chain. During the co-operation process, IFC, along with partners in the programme, has been supporting and advising SHB in developing business strategies, contributing to improving management and operating capacity, and risk management according to international standards. — VNS