On June 21, the International Finance Corporation (IFC) announced that it and Japanese bank Sumitomo Mitsui Banking Corporation (SMBC) would provide a commodity-backed loan worth 40 million USD to Thanh Thanh Cong - Bien Hoa Joint Stock Company (TTC AgriS), Vietnam's leading agricultural business company.
This is the first warehouse-backed loan provided by IFC and SMBC. The loan was made under IFC's Global Warehouse Finance Program (GWFP). This funding is expected to boost the warehouse financing market in Vietnam, which is still in its nascent stage. At the same time, encourage domestic banks to participate in the agricultural business value chain to optimize funding opportunities in this potential industry.
GWFP is deployed to increase working capital for manufacturers or traders of agricultural products by using goods in warehouses as collateral. Launched in 2010, to date, GWFP has funded more than 10 billion USD globally.
Ms. Dang Huynh Uc My, Vice Chairman of the Board of Directors of TTC AgirS, said that this financing solution will be the premise to allow TTC AgriS to receive loans through the use of raw materials as collateral. This will help the company be more proactive and flexible in purchasing, storing and distributing raw materials and goods, aiming for an optimal system that achieves the highest efficiency.
"We believe that the cooperation with IFC and SMBC will be an important part of TTC AgriS's circular economy development strategy, in accordance with the direction of transforming the integrated smart agricultural economic model to affirm its leading position in the market in comprehensive agricultural business solutions in Vietnam and in the region," Ms. My said.
Mr. Thomas Jacobs, IFC Country Director for Vietnam, Cambodia and Laos, said that IFC prioritizes the agricultural business sector because of the huge impact on development and poverty reduction that this industry can bring. With solid economic growth, the rise of the middle class and higher demands on hygiene and food safety in Vietnam, these two investments will help diversify the range of products and better services for consumers, support local producers and facilitate the flow of goods trade - key to the future recovery and resilience of the agricultural sector. This will contribute to improving the competitiveness of Vietnam's agribusiness value chain, creating more jobs and improving people's livelihoods.
Source Youth Newspaper: https://thanhnien.vn/ifc-dau-tu-vao-nong-nghiep-tai-viet-nam-185230621115829298.htm