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VDB’s Export Credit

Contents

Background of Exportation in Vietnam State’s Export Credit Policy History
Shortcoming & Challenging Development orientation

Background of Exportation in Vietnam

 Moving toward market economy from centrally-planed

economy
 Driving force of Vietnam economy: Export  GDP per capita is low  Export turnover = 70 % GDP

 Main export products are agriculture commodities
 Official ECA is non-existence

State’s Export Credit Policy History
The agencies in charge of State’s Export Credit policy
 1995-2000: The General Department for Development and

Investment (GDDI)
 2000-2006: Development Assistance Fund (DAF)  2006-now: Vietnam Development Bank (VDB)
 

Registered capital : USD 500 million Government guarantee for VDB solvency

 Milestone: Vietnam became the WTO’s 150th member on 11

January 2007

State’s Export Credit Policy History

Previous 2000
 Export credit is primarily performed through State of

Commercial Banks (SOCB): Vietcombank, BIDV…
 There is no centralized bank implementing export credit

policies of State

State’s Export Credit Policy History
2001 -2006: DAF (former GDDI)
 Official export credit policy is announced (Decision No.

133/2001/QD-TTg dated 10 September 2011 by Prime Minister)
 Forms of export credit: short-term lending (buyer’s credit,

supplier’s credit), long-term credit, bid bond, performance bond.
 Interest rate is softer than commercial banks’  Eligible commodities are limited.

State’s Export Credit Policy History
2001 -2006: DAF
Turnover
600 500 400 300 200 100 0 2001 2002 2003 2004 2005
(Unit: USD million)

500

538

310

72

90

State’s Export Credit Policy History
2006 – 2011: VDB (former DAF)  Export credit is implemented under Decree No. 151/2006/QD-CP dated 20 December 2006 by Prime Minister  Forms of export credit: short-term export credit, export credit guarantee, tender guarantee (bid bond) and performance guarantee (bond)  Interest rate is adjusted in line with commercial rate  Eligible products are expanded (agriculture, forestry and aquatic products, handicraft and fine-art, industrial products)

State’s Export Credit Policy History
Turnover (2006-2010)
(unit: USD million)

1,800 1,600 1,400 1,200 1,000 800 600 400 200 0

1,622 1,364 1,010
400

475

2006

2007

2008

2009

2010

State’s Export Credit Policy History

6%

2%

7%

Segment by 2010
Agriculture, forestry and aquatic product Handicraft and fine-art Industrial product

85%

Rice (Cooperation program of Government)

State’s Export Credit Policy History

2011- current: VDB
 Export credit is implemented under Decree No.

75/2011/QD-CP dated 30 August 2011 by Prime Minister
 Forms of export credit: short-term export credit

Shortcoming and Challenging

 Size: rather modest compared with other ECA.  Experience: focused mostly on supplier’s credit and short-

term credit.
 Export credit insurance: non-existence.  Organization: both investment and export credit.

 Legal status of the export policies: weak compared with

other ECA.

Development Orientation

 Overcoming weakness and challenging above.  Inheriting the current regulations in accordance with WTO

and OECD arrangement policies (interest, forms of credit...)
 Establishing an independent agency which has

responsibility for export credit.

VDB contact
A D D : N O . 2 5 A C AT L I N H S T R E E T, D O N G D A D I S T R I C T, HANOI, VIETNAM TEL: 084 4 36375659 FA X : 0 8 4 4 3 6 3 7 8 1 0 4 W E B S I T E : H T T P : / / W W W. V D B . G O V. V N /

Thank you for attention