At the 4th APEC Supply Chain Finance Conference in HCM City on November 11 (Photo: VNA) HCM City (VNA) – Vietnam has been in short of supply chain financesolutions, which help local firm expand their business and penetrate into newmarkets, heard a conference in Ho Chi Minh City on November 11.
Experts said that Vietnam has recorded robust export growth in recent years,with free trade agreements opening up new market opportunities for local firms.However, a lack of working capital and transaction banking services like supplychain financing partially affect local suppliers’ ability to accept largeorders or develop new relationships with their partners in the value chain.
Without supply chain finance solutions, it would be difficult for bothsuppliers and distributors to optimise their capital management by convertingtheir sales receivables and inventories into cash and accessing to lower-costcredit, they said at the fourth annual conference on supply chain financing inAsia-Pacific by the State Bank of Vietnam (SBV) in collaboration with the APECBusiness Advisory Council and the International Finance Corporation (IFC).
According to statistics from the National Registration Agency for SecuredTransactions, the number of registrations for transactions in accountsreceivable and inventory financing only accounts for 30 percent, which is muchlower than the figures in more developed markets.
Ha Thu Giang, deputy head of the Credit Policies for Economic SectorsDepartment under the SBV, described supply chain financing as an effectivesolution that help members of the value chain improve competitive edge and gainoptimal benefits, while creating favourable conditions for financialinstitution to control capital flow.
Therefore, supply chain financing would be a development trend of the bankingsystem in the time ahead, she added.
However, Giang pointed out major difficulties to develop the service inVietnam, such as lack of transparency in corporate financial information,limited capacity of local suppliers, and the absence of a comprehensivecustomer database and e-commerce platforms providing supply chain financing.
Meanwhile, IFC Country Manager for Vietnam, Cambodia and Laos Kyle Kelhofersaid the availability of supply chain finance products will help local firmspromote linkages with global chain.
However, few financial institutions in Vietnam offermodern supply chain finance services at large scale, which is a missedopportunities for both financial service providers and local businesses, headded.
With the support from the Swiss State Secretariat for Economic Affairs (SECO),IFC is implementing an advisory project to put forth supply chain financing formicro, small and medium-sized businesses through improving legal frameworks,sector infrastructure, capacities of service providers and awareness of localfirms.
IFC pledged support for Vietnamese players to develop and diversify supplychain finance market, he stressed./.
VNA
