The International Finance Corporation has increased trade finance limits for Vietnamese banks to improve their capacity to cover SME payment risks after COVID-19 outbreak.

The spread of COVID-19 has caused business disruption in Vietnam since the first case was announced in late January 2020. The hardest hit areas include tourism and associated services, cross-border trade, manufacturing and agribusiness, among other sectors.

IFC is supporting Vietnamese businesses by increasing trade limits for four client commercial banks including An Binh Commercial Joint Stock Bank (ABBank), Tien Phong Commercial Joint Stock Bank (TPBank), Vietnam International Commercial Joint Stock Bank (VIB) and Vietnam Prosperity Joint Stock Commercial Bank (VPB).

The increased total limit of USD 294 million will enable these banks’ capacity to cover payment risks in granting trade financing to local companies, mostly small and medium enterprises, IFC said in its press release on February 21. This initiative follows the State Bank of Vietnam’s call to financial institutions to support local businesses, which may be affected by the coronavirus outbreak – particularly those in trade and supply chain linkages.