IFC APPROVES FIRST LOAN UNDER MEKONG FINANCING LINE
-Support for Local Private Sector in Vietnam-
L. Joseph
Phone: (202) 473-7700
Fax: (202) 974-4384
E-mail: ljoseph@ifc.org
WASHINGTON, D.C., June 16, 1998 --- The International
Finance Corporation has approved its first financing to a local private
company in Vietnam, with a loan of US$300,000 to Vinh Phat Company Limited,
a garment manufacturer and exporter. The financing, which will support
the company’s expansion program, will increase production in the firm,
and bolster Vietnam's exports as well as employment.
Vinh Phat is undertaking a US$645,000 expansion program in response to
current and projected demand increases. Under this program, the company
will raise its output from 170,000 to 300,000 cut-make trim units per year
by enlarging production space, improving facilities, and purchasing additional
production equipment. The company will also implement measures to enhance
productivity.
Mr. Javed Hamid, IFC’s Asia I Director, noted the established reputation
of the Vietnamese garment sector among international retailers, and the
particular flexibility of Vinh Phat to meet improved quality and production
standards that accompany increased demand. Mr. Hamid said that IFC’s loan
will help the company to increase its exports and create new employment.
It provides a good model for future Mekong Financing Line (MFL) investments,
he added. MFL is a US$5 million facility, which enables IFC to lend to
and make investments in small and medium-sized enterprises (SMEs) in Vietnam,
Cambodia, and Lao PDR.
The Vinh Phat project was developed with the assistance of the Mekong Project
Development Facility (MPDF), which provides business planning assistance
and training to private firms in Vietnam, Cambodia, and Lao PDR. Headquartered
in Vietnam, MPDF is managed by IFC and funded by IFC and several bilateral
and multilateral donors.
IFC, part of the World Bank Group, fosters economic growth in the developing
world by financing private sector investments, mobilizing capital in the
international financial markets and providing technical assistance and
advice to governments and businesses.
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