With $5.5 million in funding from SECO, Phase 2 of the Supply Chain Finance (SCF) Program tackles a critical issue: working capital constraints hindering business growth.
Vietnamese exporters often face long waits of 30 to 60 days for payment, restricting their ability to take on larger orders and form new business partnerships. Given that exports contribute significantly to Vietnam’s GDP, these cash flow issues pose a significant obstacle to the country’s economic expansion.
IFC and SECO representatives at the signing ceremony for Phase 2 of the SCF Program. Photo: Hoang Nam/The Hanoi Times
Nguyen Ngoc Canh, Deputy Governor of the State Bank of Vietnam, emphasized the importance of supply chain finance in enhancing cash flow and growth prospects for businesses. “It is a low-risk, highly effective solution to secure the working capital necessary for sustainable business expansion,” he added.
Vietnam is committed to enhancing its financial infrastructure to improve access to supply chain finance. Canh stated, “The State Bank of Vietnam will collaborate with IFC and SECO to promote digital lending platforms and diversify financial products, enabling businesses to integrate more deeply into global supply chains.”
According to Swiss Ambassador to Vietnam Thomas Gass, supply chain finance is crucial not just for SMEs but also for large corporations. He remarked, “Access to working capital is pivotal in boosting business efficiency and unlocking novel growth opportunities.”
The second phase of the program prioritizes the utilization of technology, including blockchain, to enhance transparency and efficiency. “We will harness technology to formulate adaptive financial policies, ensuring the long-term sustainability of the financial system,” Gass assured.
Gass also reiterated Switzerland’s dedication to backing Vietnam’s economic ambitions: “Vietnam and Switzerland will persist in strengthening financial cooperation, building a more robust supply chain finance system, and supporting Vietnam’s path toward a high-income economy.”
Initiated in 2018 with SECO’s support, the SCF program has yielded remarkable outcomes. It has improved financial regulations, offered advisory services to four prominent Vietnamese banks, and facilitated $33 billion in supply chain finance for SMEs.
Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia, and Laos, underscored the program’s significance for Vietnam’s long-term economic development. “An efficient SCF system is vital for Vietnam’s aspiration to become a high-income country,” he said. Jacobs also expressed IFC’s pleasure in continuing its collaboration with SECO and local banks to expand supply chain finance solutions, making it easier for businesses to secure financing, accelerate growth, and solidify their global market presence.
Beyond expanding financial access, Phase 2 of the SCF program will catalyze regulatory advancements, bolster financial institutions, and raise SME awareness of supply chain finance opportunities. As Vietnam refines its financial ecosystem, supply chain finance will be transformative for businesses aiming to scale up and compete on a global scale.
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