JBIC and VDB at signing
JBIC signed an untied loan agreement totaling up to $100 million with the Vietnam Development Bank (VDB), with the Government of Viet Nam providing a guarantee for the loan. The loan was cofinanced with a private financial institution, with JBIC providing guarantee cover for the cofinanced portion.
VDB is a public financial institution wholly owned by the Government of Viet Nam and provides finance for trade and domestic business investment at its head office and branch offices in the country. The loan aims to finance the local supporting industries that are doing business with Japanese firms, in partnership with VDB having a broad network across the country. The loan is thus expected to help Japanese firms operating in Viet Nam to secure a stable supply of raw and other materials, with better quality and lower cost, thereby supporting their efforts to strengthen international competitiveness.
According to the results of the FY2010 Survey Report on Overseas Business operations by Japanese Manufacturing Companies that JBIC conducted, Japanese Manufacturers consider Viet Nam as the 3rd most promising country for overseas business development over the medium term (around 3 years), following China and India. Since the loan is also expected to be utilized for trade finance in Viet Nam, a country of increasing importance for Japanese firms, it will prove effective in stabilizing the funding environment, thereby contributing to the business development of locally operating Japanese firms.