BIDV, the Japan International Cooperation Agency (JICA) and Japanese SMEs Company (JSC) have signed an agreement to finance a rental factory for SMEs in southern Dong Nai Province’s Nhon Trach 3 Industrial Park.

​Under the agreement signed on August 13, 2015, the JICA will lend BIDV a preferential loan of 2.94 billion Japanese yen (USD24 million) with a fifteen year tenor. The loan will come from Japan’s Private Sector Investment Finance (PSIF). BIDV will then on-lend to JSC to finance a rental factory project.

According to Mr. Quach Hung Hiep, BIDV’s Senior Executive Vice President:The selection of BIDV for the JICA’s two-step loan has further confirmed the bank’s prestige and capabilities in the international capital market. The bank’s securement of the loan for the factory-for-lease project has confirmed its commitment to supporting businesses which have Japanese investments in Vietnam.

The JICA considered several Vietnamese banks for the loan, as well as conducting an evaluation study of around 5,000 Japanese firms in terms of factory demand in Vietnam’s industrial parks. Established in June 2015, JSC is a joint venture between the Tin Nghia Corporation, the Forval Japan Company and the Dong Nai Container Port Company.

Mr. Yasushi Tanaka, director general of the Private Sector Partnership and Finance Department, JICA, said the co-operation would be an opportunity to expand credit relationships with one of the leading banks in Vietnam. The project in Dong Nai Province aimed to meet the business demands of the support industry in Vietnam. It was expected that under the support of Japan’s Saitama Province, there would be many SMEs with high technology seeking to rent a factory in the area.

Mr. Nguyen Thanh Binh, a member of the JSC’s board of directors, appreciated the positive support received from JICA and BIDV. He said the JICA’s long-tenor loan disbursed through BIDV would help the company to save costs, stabilise and expand its production. The company is targeting the provision of long-term factory areas for Japanese companies in the Dong Nai province.

With the signing of the two-step loan agreement, the parties hope to continue building stronger relationships, contributing to the long-term development of each party and bringing mutual benefits to businesses within the two countries. If achieved, these outcomes will help realise the objectives set out in the Vietnam - Japan cooperation framework towards 2020-2030, of developing strategic relationships between the two countries.