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ADB Signs Financing Agreements with 8 Viet Nam Banks to Boost Trade

HANOI, VIET NAM (28 April 2009) - The Asian Development Bank (ADB) today signed financing agreements aimed at bolstering trade with eight Vietnamese banks.

The ADB inked the pacts with Asia Commercial Bank, Military Bank, Saigon Thuong Tin Bank, Techcombank, Vietnam Bank for Agriculture and Rural Development, Vietnam Bank for Industry and Trade, Vietnam Export Import Bank, and Vietnam International Bank. ADB is expecting to sign the similar agreements with two more Vietnamese banks shortly, making the total number of participating Vietnamese banks to 10.

The agreements come at a time when the global crisis has made financial institutions increasingly reluctant to lend because of the need to shore up their own capital. Failure to support companies with trade financing threatens to exacerbate and prolong the worldwide economic downturn, a problem for Asian nations like Viet Nam that have active export industries.

"Credit for trade financing has declined everywhere, including in Viet Nam. These agreements will have ADB work with Vietnamese banks to support local companies doing international trade. That will, in turn, help keep people in jobs," said Philip Erquiaga, Director General of ADB's Private Sector Operations Department.

Viet Nam's exports dropped by 19% on year in April to $4.3 billion while imports tumbled 35% to $5.5 billion in the same time period, according to the Viet Nam government's customs department. That left Viet Nam with a trade deficit of $1.2 billion in April after recording surpluses for the first three months of the year.

The agreements are part of ADB's recently expanded $1 billion Trade Finance Facilitation Program (TFFP) that is expected to garner up to $15 billion in trade support in Asia by the end of 2013.

"Financing under the TFFP can be made available to both private firms and to state-owned enterprises. Viet Nam needs to promote trade to counter the adverse impact of the global economic slowdown. Through the TFFP and other assistance, ADB is committed to helping Viet Nam strengthen its resilience and to promoting its economic recovery," said Ayumi Konishi, ADB's Country Director for Viet Nam.

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2008, it approved $10.5 billion of loans, $811.4 million of grant projects, and technical assistance amounting to $274.5 million.

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