US bank ready to help local enterprises

08:43 | 23/10/2012
US Export-Import Bank’s Asia-Pacific Export Finance Division senior business development officer James Lewis  updates VIR’s Trinh Trang about the bank’s financing programme to provide $1.5 billion for Vietnam-based enterprises.

us bank ready to help local enterprisesWhy did US Export-Import Bank choose Vietnam to implement this programme?

Vietnam is one of nine priority special focus countries in our strategic planning. Vietnam has a steady gross domestic product (GDP) growth rate and a stable political system and high demand for infrastructure development.

Vietnam is a strong emerging market, offering ground floor and growing opportunities for US exporters and investors. Its economic growth rate has been among the highest in the world in recent years, expanding at an average on 7.2 per cent per year during 2001-2012. Industrial production grew at an average of about 12 per cent during the same period. Despite the continuing global economic recession in 2010, US exports to Vietnam grew by an impressive 21 per cent to $4.8 million in the 12 months ending November, 2011. US exporters saw significant agriculture sector growth, which accounted for one-third of US exports to Vietnam.

How can Vietnamese enterprises or buyers access the programme?

The first step is to start discussions with a local bank, which will help enterprises apply for the transaction and buyers to require the bank to guarantee the transaction.

The next step is to provide as much information about the company as possible to the bank, so it can make a good assessment of the transaction and present it to us. We will then analyse and approve the transaction and the disbursement may not occur before Export-Import Bank declares the transaction operative.

Moreover, buyers must satisfy the credit standard required for each kind of loan. For example, to have medium-term credit insurance and loan guarantees, buyers must have a minimum of a three-year history, a reliable financial statement or audited one if required credit is larger than $1 million and buyers must meet some certain financial ratios.

In the loan disbursement process, the primary required documents include US commercial invoices, proof of payment, evidence of exports and an exporter’s certificate.

Are you worried about the high non-performing loan ratio in Vietnam, as many enterprises have not provided transparent information about themselves to banks?

Of course we worry about this. We know this year is a difficult year and in Vietnam, many businesses have closed. We do not have ability to make an assessment of an individual business so that’s why we need Vietnamese banks to help us to make that assessment to have good credit, we also have a highly capable credit team in Washington to make credit valuations.

We are currently working with some local lenders, most of which are commercial joint stock banks with state capital contributions to guarantee short-term loans. We may not publish the list now, but we already work and get their names.

Credit growth is slow, how can US Export-Import Bank fasten the disbursement process to make more enterprises access loans?

In many parts of the world right now, credit demand has fallen off. We expect the economy will come back and continue to grow.

Do you worry about the cross-ownership in Vietnam’s banking system?

We will not worry about this as long as we have information about the bank and to make it qualified enough to make good assessment for us, then we need as much information as possible to avoid this issue.

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