The International Finance Corporation (IFC) has invested VND403.1 billion (US$18.35 million) to buy Tien Phong Bank (TPBank)’s dividend preferred shares.

Accordingly, the investment allowed IFC, a member of the World Bank Group, to acquire a nearly 5 per cent stake in the bank and make it the sixth largest shareholder in TPBank.

A representative from IFC said that the investment in TPBank would help the corporation expand loan services to better serve growing Vietnamese businesses, or this means that the bank can offer loans to more than 40,000 Vietnamese small and medium-sized enterprises (SMEs). IFC also provided consultation to TPBank to improve the bank’s management capacity of risk and develop more products.

TPBank Chairman Do Minh Phu said that with its abundant financing and extensive relationship network , IFC will increase capital resources and governance capacity as well as uncovering opportunities of co-operation with local and international financial institutions.

Additionally, thanks to IFC’s investment, TPBank can complete its long-range plan of becoming the country’s leading digital bank, expanding its retail SME reach, which comprise about 85 per cent of TPBank’s portfolio.

Kyle Kelhofer, IFC country manager for Vietnam, Cambodia and Laos said that through the investment in TPBank , IFC demonstrates continued support to Vietnam’s banking sector and its development of diversified financial products and services to SMEs which will in turn offer more employment.

Founded in 2008, TPBank has grown into a medium-sized bank with total assets of VND83,200 billion (US$3.7 billion) as of mid-2016. TPBank joined IFC’s Global Trade Finance Program in December 2015 with an initial support of US$10 million. Lately, IFC has increased its trade exposure to US$30 million because the bank has used the support effectively.