On October 30, 2020, at the headquarters of the State Bank of Vietnam (SBV), Deputy Governor Nguyen Thi Hong had a meeting with Mr. Alfonso Garcia Mora - Vice President for Asia and the Pacific of the International Finance Corporation (IFC). Under the impacts of the Covid-19 pandemic, the SBV-IFC meeting was held virtually.
Also attending the meeting, on the side of the SBV there were leaders of the International Cooperation Department, the Monetary Policy Department, the Foreign Exchange Management Department, the Banking Supervision Agency and the SBV Office. On the IFC side, there was Mr. Kyle F. Kelhofer – IFC’s Country Manager for Vietnam, Cambodia and Laos.
Speaking at the meeting, Deputy Governor Nguyen Thi Hong congratulated Mr. Alfonso Garcia Mora on his appointment as IFC's Vice President in charge of Asia and the Pacific. Deputy Governor Nguyen Thi Hong also wished the new IFC’s Vice President a successful office term, and hoped that he would be an important bridge to promote the relationship between the IFC and Vietnam. The IFC’s support is among the important resources to help Vietnam to successfully implement the process of economic restructuring, as well as to develop different economic sectors, especially the private one.
Mr. Alfonso Garcia Mora - IFC's Vice President for Asia and the Pacific - thanked Deputy Governor Nguyen Thi Hong for taking the time to meet and work with his Mission. Before taking the position of IFC’s Vice President for Asia and the Pacific, Mr. Alfonso Garcia Mora had spent many years working at the World Bank Group as a Finance Global Director in the Finance, Competitiveness & Innovation Global Practice. “In my experiences, I have worked very closely with the financial sector and financial market development in member countries of the World Bank Group in general and the IFC in particular. I hope that during my term at the IFC, I can further promote the IFC's cooperation activities in Vietnam” - said Mr. Alfonso Garcia Mora.
According to Mr. Alfonso Garcia Mora, the IFC always considers Vietnam as an important member and partner. With the efforts of the representatives from the Vietnamese side, the IFC has successfully promoted the portfolio of support programs for Vietnam. In the recent years, with very rapid development, Vietnam has emerged as one of the Top 10 countries receiving support from the IFC. The IFC’s Vice President emphasized that: "I look forward to achieving the goal of promoting Vietnam's position to be in the Top 5 countries receiving support from the IFC." According to the IFC's portfolio in Vietnam, from 1994 to the end of the 2020 fiscal year, the IFC had invested more than 9 billion USD with more than 160 projects through the forms of capital contribution, share purchases, lending and trade financing. As of June 30, 2020, the total existing investment of the IFC in Vietnam was 1.3 billion USD, of which 1.16 billion USD had been disbursed.
On behalf of the SBV's Board of Management, Deputy Governor Nguyen Thi Hong expressed high appreciation for the IFC's support for Vietnam in general and the banking sector in particular in the recent years. Beside investment activities, the IFC also provides consultancy and advisory support in terms of policy, orientations for the creation and development of the financial and monetary markets, and development of the private sector, etc., creating a basis for references, a reliable information channel for the policy-making and implementing agencies in term of research, policy recommendation and formulation.
For the IFC Vice President's wish to promote cooperation and develop capital markets in Vietnam, the SBV Deputy Governor emphasized that this is also one of the areas receiving big interest by the Vietnamese Government and ministries. Because the current investment capital for businesses in Vietnam is heavily dependent on the credit capital of the banking system. On the side of the SBV, Deputy Governor Nguyen Thi Hong said that developing a financial market based on the different segments and functions would help the banking system to operate better; especially when the economic sectors are able to mobilize capital from many different channels. This would bring about greater security and stability to the economy.
SBV Deputy Governor Nguyen Thi Hong speaks at the meeting
Furthermore, Deputy Governor Nguyen Thi Hong highlighted that the SBV supports the IFC's offer to enhance the IFC's support for the development of small and medium enterprises (SMEs). Currently, over 90% of the total number of enterprises in Vietnam are SMEs, who are faced with many difficulties, challenges in terms of markets, governance capabilities as well as financial resources. According to the Deputy Governor, the SBV has issued many monetary and credit policies to support this group of businesses. However, the SBV hoped that the IFC could pay more attention to supporting the SMEs through sharing international experience and proposing possible solutions, as well as voicing to the Government and the relevant ministries to introduce a new system of consistent policies to support the SMEs.
Financial Inclusion is a topic of great interest to all countries, including the developed ones and the ones from Asia and the ASEAN region. In the case of Vietnam, the Government has made a policy to pursue sustainable economic development - Leaving no one behind. Therefore, the development and implementation of a National Financial Inclusion Strategy (NFIS) plays a very important role in implementing this policy of the Government. The SBV is very grateful for the IFC's assistance in the process of formulating and finalizing the National Financial Inclusion Strategy to 2025, Vision to 2030. By now, although the Strategy has been approved, it is more important to organize and ensure effective implementation of this Strategy. Deputy Governor Nguyen Thi Hong hoped that the IFC would join hands with and support the SBV in the process of implementing this National Strategy, especially when the target groups of this Strategy are the SMEs, women, the poor people in remote and far-flung areas.
During the growth of the banking system in general and the SBV in particular, Deputy Governor Nguyen Thi Hong emphasized that the biggest attention of the SBV's leadership is human resource development. Although the SBV’s current staff have been trained and have quite rich experience, considering new development requirements, they still need to be further trained and improve their knowledge. With the great demands for technical support from the SBV entities, Deputy Governor Nguyen Thi Hong hoped that in the future, the IFC would continue to provide further support as well as call for funding from other international organizations to contribute to the consolidation and enhancement of the operational efficiency of the SBV entities.
VA