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IFC Supports Vietnam’s Small and Medium Enterprisesby Helping Them Gain Access to Finance
Ho Chi Minh City, Vietnam, May 10, 2016—IFC, a member of the World Bank Group, is supporting the growth of Vietnamese small and medium enterprises by promoting factoring services as a means of access to critical finance.
Vietnam is one of the world’s fastest-growing economies and has new regional and international trade arrangements forged with ASEAN Economic Community, European Free Trade Agreement and the coming Trans-Pacific Partnership. However, many of the country’s producers and traders lack the financial means to expand with strength. By providing short-term funding against receivables, together with management solutions, such as risk protection and collection services, factoring services will allow businesses to take advantage of imminent growth opportunities, both at home and beyond.
“The increasing trend of globalized markets and falling trade barriers are leading to multiplication of cross-border business opportunities,” said Kyle Kelhofer, IFC’s Country Manager for Vietnam, Cambodia and Lao PDR. “Vietnamese small and medium enterprises can increasingly leverage new trade finance facilities such as factoring to improve competitiveness and attract foreign partners so that they can expand trade volume and grow business.”
IFC, Factors Chain International (FCI), Vietnam Banks’ Association (VNBA) and Vietnam International Bank (VIB) offered a one-day intensive training on factoring to promote secured transactions and greater access to private sector finance. Nearly 200 representatives from commercial banks and enterprises also attended a conference in Ho Chi Minh City today to learn about the full range of services covered by factoring. They discussed the benefits for importers, exporters and service providers such as commercial banks while addressing the challenges involved with delivering and scaling up factoring services in Vietnam.Implemented in partnership with Canada, Japan and Switzerland, the training and conference programsare examples of IFC’s continued support of small and medium enterprises.
“Factoring services help businesses save existing credit linesand enjoy deferred open account payment terms as well as avoid language barrier when dealing with foreign partners,” said Vuong Thi Huyen, VIB’s Head of Wholesale Banking Division. “As a leading SME trade bank and the best issuing bank in East Asia & Pacific, VIB is ready to support import-export enterprises and SMEs via innovative financing solutions, including factoring to expand and grow their businesses.”
With an annual international trade volume of about $300 billion, Vietnam demonstrates significant potential for the development of international factoring. According to FCI, in 2014, factoring in Vietnam handled by FCI members amounted to Euro 100 million, a fraction of the total volume of business handled by its factoring companies worldwide, which neared Euro 2,373 billion. Factoring services in Vietnam is currently offered by eight official providers, three of which are members of FCI, a global network of leading factoring players. In Vietnam, IFC has also piloted factoring services via its Global Trade Supplier Financing facility since May 2003, providing financing of over $4.5 million to 11 local suppliers of four international buyers in the garment sector.
“Factoringis simply a package of services designed to make international trade as easy and smooth as possible by offering risk mitigation tools and liquidity together to support the growth in trade between importers and exporters, so it’s a preferred method in international trade around the world,” said Peter Mulroy, Secretary General of FCI. “If you want to expand foreign sales, you will have to offer buyer-friendly terms such as open account which factoring can support without reducing your security or affecting your cash flow.”
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it’s needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit
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About Factors Chain International (FCI) Global Representative Body for Factoring
FCI was set up in 1968 as an umbrella organization for independent factoring companies around the world. Today we have grown into the world’s representative factoring network and association with more than 400 members in 90 countries. In 2016 the activities of IFG (International Factors Group) were integrated into FCI. Today, FCI is truly the global representative body for the Factoring & Receivables Finance Industry. For more information, visit
About Vietnam Banks’ Association (VNBA)
VNBA - is a voluntary professional organization of credit institutions in Vietnam; it operates in a voluntary principle of autonomy and self-responsibility; it gathers and motivates its members to cooperate and support one another in their operations; it protects legitimate rights and interests of the members; it acts as a link between the Members and the government agencies; it aims at stable,
effective, prudential, and healthy development of the credit institutions of Vietnam and contributes to the implementation of the monetary policies for socioeconomic development. VNBA currently has 55 members, including 36 commercial banks, 12 finance companies and 07 other types of organizations.For more information, visit
About Vietnam International Bank (VIB)
Vietnam International Commercial Joint Stock Bank, abbreviated as Vietnam International Bank (VIB), was established on September 18,1996. By September 2011, after 15 years of operation, VIB has become one of the top commercial joint stock banks in Vietnam with the total asset of more than 100,000 billion dong (more than $5 billion). Currently, VIB has more than 4,000 staff serving more than one million customers in 154 branches and transaction offices throughout the country, providing quality products and services to more than 1.6 million personal customers and about 20,000 corporate customers. For more information, visit