The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors approved a loan of USD100 million to Viet Nam’s Prosperity Joint Stock Commercial Bank (VP Bank). AIIB’s first project in Viet Nam would help VP Bank expand lending to the private sector—including small and medium enterprises—to help sustain business activities disrupted by the COVID-19 pandemic.
Cofinanced with the International Finance Corporation, the nonsovereign 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 Viet Nam.
“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 Viet Nam.”
While Viet Nam’s economy has been growing for decades, supported by booming consumption by the growing and urbanizing middle class, the country is severely affected by COVID-19 and has suffered significantly during the outbreak. Viet Nam’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 USD5.9 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.
About AIIB
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia. Headquartered in Beijing, we began operations in January 2016 and have now grown to 102 approved members worldwide. By investing in sustainable infrastructure and other productive sectors in Asia and beyond, we will better connect people, services and markets that over time will impact the lives of billions and build a better future.
