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Viet Nam,Soc Rep of
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PS: VIE 41933-01
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The Bank for Foreign Trade of Viet Nam (Vietcombank)
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Location
Headquartered in Hanoi, Vietnam, Vietcombank is the principal commercial bank in Vietnam and has 60 branches, 78 sub-branches and transaction centres.
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Sector Classification
Industry & Trade / Small & Medium Scale Enterprises
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Web Posting
23 October 2007
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Most Recent Update
20 December 2007
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Project Sponsor(s)
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Investment Approval Date
2007 (Expected Approval Year)
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Estimated Completion Date
31 January 2008
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- Cost and Financing Plan (in US$ million)
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Bank Assistance
| Source |
Amount |
Description |
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Public Sector Loan |
20.00 |
Loan to Vietcombank |
| Total |
20.00 |
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Other Financing Source(s)
- Description
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The proposed ADB assistance consisting of a loan of $20 million to The Bank for Foreign Trade of Viet Nam (Vietcombank), to be relent to the fully-owned leasing subsidiary, Vietnam Financial Leasing Company (VFLC). The loan is expected to strengthen the leasing industry and expand the funding resources and financial services available to the SME sector in Viet Nam. The activity of leasing companies in Viet Nam is constrained by the need to borrow at short maturity to fund a business that lends at a longer maturity. The underdeveloped nature of corporate debt market in Viet Nam has made non-bank leasing firms heavily dependent on commercial banks for their funding through short-term borrowings and commercial paper. This has resulted in maturity mismatches in asset and liabilities and higher cost of funds for these institutions.
The proposed loan from ADB to VFLC will provide them access to medium-term funds and thereby enable them to promote alternative and more competitive financing instruments to SME entrepreneurs to promote their operations and profitability and enhance their growth and competitiveness.
The proposed loan will be used to provide leasing facilities to small and medium-sized companies, especially in light manufacturing and services in the major urban centres of Hanoi and Ho Chi Minh City.
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- Rationale
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- Objectives and Scope
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ADB's objectives for the proposed loan are (i) to increase the availability of term financing for financial leases, thereby assisting SME access to finance; and (ii) to strengthen the cooperation between the bank branches and the leasing company to service the SME customer base
The proposed loan will enable Vietcombank to meet its objective to extend term leases to SMEs through its leasing subsidiary, Vietnam Financial Leasing Company (VFLC) in Hanoi and Ho Chi Minh City.
- Policy Dialogue
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- Environment Category:
FI
- Environment Impact and Mitigation
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- Social Aspects and Remedies
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- Benefits and Beneficiaries
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The proceeds of the proposed loan will be used by Vietcombank for on-lending to VFLC, to fund term leases in response to demand from SMEs in Viet Nam.
- Beneficiary Participation in Formulation
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- Beneficiary Participation in Implementation
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- Contacts
- Bank
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Madeleine Varkay
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Private Sector Development Specialist
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SEGF
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Tel. No.:
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(632) 632-6450
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E-mail:
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mvarkay@adb.org
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- Project Sponsor(s)
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Projects 
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