According to a 2018 report by the World Bank, Vietnam's credit access index ranks 29th out of 190 economies surveyed, higher than the average of the Organization for Economic Co-operation and Development (OECD) and East Asia & Pacific. But Vietnamese small and medium-sized enterprises (SMEs) said it is a big challenge for them to access credit. According to the Vietnam Chamber of Commerce and Industry (VCCI), only 30 percent of SMEs in Vietnam have access to loans from the formal sector, with the rest having to use their own funds or depend on unregulated loans. This makes it hard for them to find business opportunities and solve other problems with respect to cash flow, working capital, and debts. The VCCI has drawn up a list of loans types and the challenges each segment faces. Bank loans Many banks have made it possible for SMEs to get access to credit. In the past few years most joint stock banks have earmarked tens of trillions of dong ($1=VND23,381) for priority sectors. … [Read more...] about Who do Vietnam’s small and medium-sized enterprises turn to for funds?
Bank finance for working capital
Vietnam’s merger and acquisition (M&A) market has seen significant growth over the past decade with a total of 4,353 deals valued at $48.8 billion done. Last year there was the biggest M&A deal ever when Thaibev Group bought 53.59 percent of the country’s largest brewery Sabeco through its subsidiary. This interest is expected to spread to other booming sectors like energy and infrastructure, education, pharmaceuticals, and telecoms in the near future aided by the constant efforts by the government to ease the restrictions on foreign investment in several sectors. In practice, M&A transactions involve guidance from consultants with various kinds of expertise until the deal is closed. The performance of legal due diligence (DD) in conjunction with financial and business DD is the first step in a deal as a pre-contractual investigation before proceeding with any further negotiations between the relevant parties. In M&A transactions, legal DD serves to collate … [Read more...] about Legal due diligence vital for business acquisitions in Vietnam
Bamboo Bike Cycling in Mekong Delta (CSR event of BNP Paribas Ho Chi Minh City Branch in 2017) Having been in Vietnam since 1989, what do you think about the development of the banking industry in the country? Tremendous efforts have been made by the State Bank of Vietnam over the past few years to improve the quality of the balance sheets of many commercial banks. The Vietnamese banking industry has therefore become healthier and is a key player in supporting Vietnam’s gross domestic product (GDP) growth. Credit growth is something we carefully look at and BNP Paribas Vietnam’s credit growth mirrored Vietnam’s significant 18 percent Credit Growth in 2017. The Vietnamese banking industry is very well positioned to implement and follow Basel II requirements in the next few years. We are also already seeing mergers in Vietnam and this trend should intensify in the future, leading to an increased consolidation of the market. Aymar De Liedekerke Beaufort, … [Read more...] about BNP Paribas accompanies banking development in Vietnam
Illustrative image (Photo: VNA) Hanoi (VNA) – How to ensure financial sustainability and long-term financial services for the poor at the same time remains a headache for both policy makers and financial service suppliers. This issues was discussed at a workshop entitled “Pro-poor Rural and Agriculture Finance Best Practices: Experiences of Vietnam” held by the Vietnam Bank for Social Policies (VBSP), the Asia-Pacific Rural and Agriculture Credit Association and the International Fund for Agriculture Development in Hanoi on September 5. Dao Minh Tu, Deputy Governor of the State Bank of Vietnam (SBV), told the workshop that the Party, the Government and the banking sector have always paid special attention to finance for farming areas in Vietnam. Under the national target programme on sustainable poverty reduction, the VBSP was assigned to provide credit for poor households and social assistance beneficiaries. In addition, the Government and the SBV have … [Read more...] about Banks seek ways to ensure long-term financial services for the poor
The banking sector needs solutions to provide more funding for agriculture and rural areas to ensure sustainable development, according to experts. The statement was made at the workshop ‘Pro-poor Rural and Agriculture Finance Best Practices: Experiences of Viet Nam’ held by the Viet Nam Bank for Social Policies (VBSP), the Asia-Pacific Rural and Agricultural Credit Association and the International Fund for Agriculture Development in Ha Noi on Wednesday. The Party, the Government and the banking sector have always paid special attention to finance for farming areas in Viet Nam, Dao Minh Tu, deputy governor of the State Bank of Viet Nam (SBV) told the workshop. Under the national target programme on sustainable poverty reduction, the VBSP was assigned to provide credit for poor households and social assistance beneficiaries. In addition, the Government and the SBV have directed preferential credit programmes for agriculture and countryside areas in domestic credit … [Read more...] about Banking sector works on funding for farmers