The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors approved a loan of USD 100 million to Vietnam’s Prosperity Joint Stock Commercial Bank (VP Bank). AIIB’s first project in Vietnam would help VP Bank expand lending to the Private Sector; including Small & Medium Enterprises to help sustain business activities disrupted by the COVID-19 Pandemic.
Co-financed with the International Finance Corporation, the non-sovereign loan will support VP Bank’s capacity to provide critical liquidity support and working capital to clients during the crisis, which in turn will support economic recovery in Vietnam.
“This will be AIIB’s first financial intermediary financing in Southeast Asia that will target support for the private sector,” said AIIB Vice President, Investment Operations, D.J. Pandian.
“Small and Medium Enterprises are the backbone of the economy and by injecting liquidity into the market we can help this critical sector as part of the overall economic recovery in Vietnam.”
While Vietnam’s economy has been growing for decades, supported by booming consumption by the growing and urbanising middle class, the country is severely affected by COVID-19 and has suffered significantly during the outbreak.
Vietnam’s GDP growth fell to 3.8 percent in the first quarter of 2020. The International Monetary Fund forecasts the Country’s real GDP growth will drop to 2.7 percent in 2020 from 7.0 percent in 2019.
As of July, AIIB’s Board has approved a total of 16 projects under its COVID-19 Crisis Recovery Facility, amounting to over USD 5.9 billion to support 12 Members in navigating the challenges of these highly uncertain times. AIIB is reviewing additional projects from its Clients.
Additional Information about VP Bank’s response to the crisis can be found here.