Foreign banks funnel capital into Vietnam
|IFC supports Vietnamese banks to boost clients' finance amid Covid-19|
|The downfall of credit demand in Vietnam|
|World Bank's expert: Strategies to mitigate the public health crisis and prepare for economic revival|
|Indo Trans Logistics Corporation truckers at a warehouse facility. The logistics firm wins a USD 70 million loan from the International Finance Corporation. — Photo ITL Corp.|
The IFC, a member of the World Bank Group, is providing a financing package of USD 70 million to Indo Trans Logistics Corporation of Vietnam in an aim to support the development of the logistics sector, thus facilitating trade and enhancing the competitiveness of the country’s economy during COVID-19.
Vietnam’s logistics sector has enjoyed strong growth over the past few years. This can be attributed to the record-high foreign investment mainly in manufacturing and processing industries – both require a strong logistics function – and booming local consumption, according to Vietnam Investment Review.
However, the logistics sector is fragmented with more than 95 percent of service providers being local small- and medium-sized enterprises with modest operations and lower competitiveness. Consequently, a few players with foreign investment lead the market, providing high value-added services. In view of this, the government is implementing a comprehensive plan to boost the competitiveness of the domestic logistic segment.
The IFC’s investment – first in the Vietnamese logistics sector – is especially timely when long-term funding is not readily available due to the COVID-19 situation. This funding will help Indo Trans Logistics (ITL), one of the leading domestic logistic companies in Vietnam, transform and grow by acquiring new assets, developing new warehouses and facilities, and deploying advanced information technology systems.
|The funding will help Indo Trans Logistics (ITL), one of the leading domestic logistic companies in Vietnam, transform and grow. Photo: itlvn.com|
Further, this will enable ITL to provide higher quality and sophisticated logistics services to its customers including local manufacturers and small- and medium-sized enterprises.
“The IFC’s long-term funding and international expertise, especially in the context of the current pandemic, is a highly valuable support which will certainly enable us to improve the efficiency of the ITL’s existing logistic assets and to expand our network and business portfolio to better serve our customers,” said Ben Anh, CEO of ITL.
In addition, the IFC will also help the company improve its environmental, social, and corporate governance standards for sustainable development.
High logistics costs impact the overall cost of doing business and negatively affect Vietnam’s competitiveness both globally and domestically. “This is why, despite uncertainties amid the ongoing pandemic, the IFC is steadfast in its commitment to support essential investment in Vietnam’s logistics supply chain to help facilitate more efficient and competitive trade,” said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia, and Lao PDR.
He added, “The IFC’s investment in companies like ITL aims to support the growth of domestic private logistics firms capable of providing comprehensive and efficient logistics services. This will help improve the sector’s capacity to serve the growing higher value-added manufacturing and processing industries, which require a more sophisticated, efficient, and lower-cost logistic function.”
Bac Giang LGG Garment Corp wins a financial support package worth USD 12.7 million from Standard Chartered to boost its production line of COVID-19 safety suits and masks. Photo: Vietnam Investment Review
Meanwhile, Bac Giang LGG Garment Corp - a Vietnamese protective workwear maker - said it had received a financial support package worth USD 12.7 million from Standard Chartered to boost its production line of COVID-19 safety suits and masks, Viet Nam News reported.
"The package is a tremendous help in improving the supply of COVID-19 protection equipment and to the global effort to fight the virus," said Luu Tien Chung, Director-General of Bac Giang LGG Garment Corp.
Earlier in March, Standard Chartered rolled out low-interest loan packages for pharmaceutical businesses and firms that manufacture COVID-19 safety equipment.
Nirukt Sapru, CEO of Standard Chartered ASEAN & South Asia, said the bank stood shoulder to shoulder with the Vietnamese garment maker in the fight against COVID-19.
|Photo courtesy of HSBC|
In another development, HSBC Vietnam became the first foreign-owned bank to issue bonds worth VND 600 billion (USD 26 million) in Vietnam.
Tim Evans, director-general of HSBC Vietnam, said the bank would be committed to Vietnam in the long term and had plans to expand its operation and capital in the future. /.
Another forecast puts Vietnam in the number one position in terms of potential growth for 2020 and 2021 among ASEAN+3 region, despite complicated developments of ...
“We must stay calm and resolved to continue performing the dual tasks of containing COVID-19 and preventing economic fragility and negative growth.” said PM in ...
Foreign enterprises including Japanese lauded Vietnam as a safe and successful country for investors.