More than 500,000 Vietnamese businesses will soon have access to $35 billion in supply chain finance loans as the International Finance Corporation (IFC) and the Swiss State Secretariat for Economic Affairs (SECO) expand their support for Vietnam's small and medium-sized enterprises (SMEs).

Supported by $5.5 million in funding from SECO, Phase 2 of the Supply Chain Finance (SCF) Program aims to address a key challenge: working capital constraints that limit business expansion.

Many Vietnamese exporters have to wait 30 to 60 days for payment, limiting their ability to fulfill larger orders and establish new partnerships. With exports accounting for nearly half of Vietnam's GDP, cash flow bottlenecks are a significant barrier to growth.

Representatives from IFC and SECO at the signing ceremony for Phase 2 of the Supply Chain Finance (SCF) Program. Photo: Hoang Nam/The Hanoi Times

Nguyen Ngoc Canh, Deputy Governor of the State Bank of Vietnam, said that supply chain finance is a critical tool for improving businesses' cash flow and growth opportunities. "It is one of the most effective and low-risk solutions to secure working capital and enable sustainable business expansion."

Vietnam is taking steps to strengthen its financial infrastructure to make supply chain finance more accessible. "The State Bank of Vietnam will continue to work with IFC and SECO to promote digital lending platforms and diversify financial products to help businesses integrate more deeply into global supply chains," Canh added.

Swiss Ambassador to Vietnam Thomas Gass said that supply chain finance is not only essential for SMEs but also affects large corporations. "Access to working capital is a fundamental factor in increasing business efficiency and unlocking new growth opportunities," he said.

The second phase of the program will focus on leveraging technology, including blockchain, to improve transparency and efficiency. "We will integrate technology to create adaptive financial policies while ensuring the long-term sustainability of the financial system," Gass said.

He also reaffirmed Switzerland's commitment to supporting Vietnam's economic aspirations: "Vietnam and Switzerland will continue to strengthen financial cooperation, develop a more resilient supply chain finance system, and support Vietnam's journey towards becoming a high-income economy."

Launched in 2018 with support from SECO, the SCF program has achieved significant results by improving financial regulations, providing advisory support to four major Vietnamese banks, and facilitating $33 billion in supply chain finance for SMEs.

Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia and Laos, emphasized the program's role in Vietnam's long-term economic development. "An efficient supply chain finance system is key to Vietnam's high-income aspirations." He added: "IFC is pleased to continue working with SECO and local banks to expand supply chain finance solutions to help businesses secure financing more easily, accelerate growth, and strengthen their position in global markets."

In addition to expanding financial access, Phase 2 of the SCF program will drive regulatory improvements, strengthen financial institutions, and increase SME awareness of supply chain finance opportunities. As Vietnam improves its financial ecosystem, supply chain finance will be a game-changer for businesses seeking to scale up and compete in the global economy.