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Assessment of the State's Export Development Situation at the Vietnam Development Bank


d. No opinion or other opinion: 24 votes, accounting for 13.5%.

The majority of VDB's TDXK activities are rated as normal, while the rest are rated as not performing well .


Survey questions

Evaluate

a

b

c

d

Product groups in product catalog

71

52

40

15

Export credit loans





Exports at VDB have the ability to compete

40.0%

29.2%

22.5%

8.4%

high





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Assessment of the States Export Development Situation at the Vietnam Development Bank

The survey on competitiveness in the TDXK product group gives the following results:

a. Agricultural, forestry and fishery products group: 71 votes, 40% rate.

b. Handicraft group: 52 votes, 29.2% rate.

c. Industrial product group: 40 votes, 22.5% rate.

d. Group of whole computers, accessories, components: 15 votes, rate 8.4%

Thus, the NLTS product group is the product group with the highest competitiveness.



Survey questions

Evaluate

a

b

c

d

Disadvantages in TDXK activities

at Vietnam Development Bank is

56

31.5%

37

21.0%

33

18.5%

30

16.9%


Evaluating the disadvantages in TDXK activities at VDB, the results are as follows:

a. Limited capital: 56 votes, 31.5% rate.

b. Lending processes and procedures are too strict and rigid: 37 votes, 21% rate.

c. Regulations on credit guarantees cause difficulties for customers: 33 votes, 18.5% rate.

d. No opinion or other opinion: 30 votes, 16.9% rate.

Thus, limited capital is the main disadvantage in VDB's export-import activities.



Survey questions

Evaluate

a

b

c

d

Outstanding strengths in credit activities

Export application at VDB

52

29.2%

56

31.5%

54

30.3 %

16

9.0 %

Surveying the outstanding strengths in TDXK activities at VDB, the results are as follows:

a. The organization of the TDXK management apparatus is highly professional: 52 votes, 29.2% rate.

b. Wide transaction network across regions: 56 votes, 31.5% rate.


c. Attractive interest rate, beneficial for borrowers: 54 votes, rate 30.3%.

d. No opinion or other opinion: 16 votes, 9% rate.

Thus, transaction network and attractive interest rates are outstanding strengths of VDB.



Survey questions

Evaluate

a

b

c

d

The biggest challenge to development

Export-import activities in Vietnam are:

44

24.7%

52

29.2%

67

37.6%

15

8.4%

Surveying the outstanding strengths in TDXK activities at VDB, the results are as follows:

a. Lack of coordination in the policy mechanism on TDXK: 44 votes, 24.7% rate.

b. The form of credit is still monotonous and lacks connectivity: 52 votes, 29.2% rate.

c. VDB's financial capacity is not strong enough to create financial momentum for exports: 67 votes, 37.6% rate.

d. No opinion or other opinion: 15 votes, 8.4% rate.

Thus, insufficient financial capacity is the biggest challenge for VDB .



Survey questions

Evaluate

a

b

c

d

Opportunity to promote development activities

VDB's export credit activity is

52

29.2%

56

31.5%

54

30.3%

16

9.0%

Survey on opportunities to develop export-import activities at VDB, results are as follows:

a. The Government's consistent policy on promoting export credit: 52 votes, 29.2%

b. Vietnam Development Bank is given strong enough financial capacity: 56 votes, 31.5% rate

c. Vietnam's export products have advantages in regional and world markets: 54 votes, 30.3%

d. No opinion or other opinion: 16 votes, 9%

Thus, increasing financial capacity for VDB and the advantage of Vietnam's export products is

major opportunity to promote the development of TDXK .



Survey questions

Rating

ah

a

b

c

d

TDXK activities at Development Bank

58

53

50

17

What is the difference between Vietnam development and TDXK in the world?





commercial banks

32.6%

29.8%

28.1%

9.6%

Survey on the difference between TDXK at VDB and TDXK at commercial banks, the results are as follows :


a. There is a difference in operating objectives: 58 votes, 32.6% rate.

b. Export credit at VDB is applied uniformly, without flexible adjustment, while export credit of commercial banks is completely based on market mechanism and is adjusted very flexibly: 53 votes, rate 29.8%.

c. Export credit at VDB is only implemented for items in the regulated list, while export credit of commercial banks is implemented for any item not prohibited by the state: 50 votes, rate 28.1%.

d. No opinion or other opinion: 17 votes, 9.6% rate.

The difference assessment is mainly an operational objective .



Survey questions

Rating

ah

a

b

c

d

Main causes affecting

51

59

52

16

TDXK activities in recent times





at VDB

28.7%

33.1%

29.2%

9.0%


The survey of the causes affecting the quality of TDXK at VDB is, with the following results:

a. The mechanism and policies on export-import activities are not consistent and do not really encourage customers: 51 votes, 28.7% rate.

b. The appraisal process and the regulations on collateral ratio are unreasonable, causing difficulties for customers: 59 votes, 33.1% rate.

c. Financial management, compliance with regulations and rules on export of many export enterprises are still weak and negative: 52 votes, rate 29.2%.

d. No opinion or other opinion: 16 votes, 9%.

Thus, the main cause belongs to VDB and customers .



Survey questions

Evaluate

a

b

c

d

Comments on sharing lessons learned

about TDXK in other countries

57

32.0%

54

30.3%

55

30.1%

12

6.7%


Survey on sharing lessons learned about TDXK, results are as follows:.

a. Should refer to the experience of Korea: 57 votes, 32% rate.

b. Should refer to China's experience: 54 votes, 30.3% rate.

c. Should refer to Thailand's experience: 55 votes, 30.1% rate.


d. No opinion or other opinion: 12 votes, 6.7% rate.

General assessment: need to learn from the experiences of all three countries .

2.3.2. Assessment of the development situation of State-owned export-import at the Vietnam Development Bank

Through actual data on the State's trade and investment activities at VDB from 2011 to 2015, combined with reference information from the survey results on trade and investment, the situation of the State's trade and investment activities at VDB can be assessed as follows:

2.3.2.1. Results achieved

First : basically complete the State's export-import policy.

• State-owned export-import enterprises at VDB contribute to the implementation of basic goals such as encouraging exports to increase foreign currency revenue for the country; Creating jobs, improving people's lives; Contributing to balancing the trade balance, reducing trade deficit.

VDB has closely combined the socio-economic development tasks with the political tasks assigned by the Government and the Prime Minister. VDB closely coordinates with local authorities and associations to support exports in accordance with the socio-economic development strategy in the area and the development planning of each industry and each economic region.

• State export credit is implemented at VDB according to the list of industries as prescribed by the Government. These are industries and commodities that need support within the legal framework of Vietnam, in order to create conditions to promote production, processing, and export of these goods, contributing to promoting economic growth. VDB's export credit capital has made positive contributions to a number of industries, regions, and fields in the list of export promotion that the Government assigned to VDB, especially agricultural, forestry, and aquatic products. From this perspective, the entire VDB system has made many efforts to carry out this important task.

• The State's TDXK at VDB has contributed to improving the competitiveness of the country's export products in general such as: coffee, seafood, wooden furniture, handicrafts, textiles, agricultural products, contributing to promoting the brand of Vietnamese products in the world. Thereby creating an increasingly stable and solid position in traditional markets and expanding the ability to enter new markets after a period of enjoying incentives from the State's TDXK policy.


• State-owned TDXK has contributed to promoting export turnover growth, improving the trade balance and GDP growth of the country in recent years. When export activities develop, it will indirectly create conditions for the completion and development of areas related to trade activities such as: customs, ships, ports, and transportation services.

• Through the State's export credit activities at VDB, the State's export credit policy has been put into practice. Every year, the State budget has supported the interest rate difference for export enterprises by about 500 billion VND. Although the number is not large, it has shown that the policy has been put into practice in economic activities in general and export in particular. More and more enterprises have sought to access the Government's export credit capital to develop their business activities.

Second : the quality and efficiency of credit management is improved.

• In loan management, debt collection, and outstanding TDXK debt

The work of loan management, debt collection, and management of outstanding export credit at the Transaction Office and Branches is carried out by the export credit departments, under the inspection, supervision, and urging of the export credit department of the VDB Headquarters. The export credit officers of the export credit department are assigned to monitor and manage each customer group and each specific customer. For loans to exporters before exporting goods, credit officers closely monitor the progress of capital use by the borrowing enterprise. When the shipment is officially exported, credit officers guide and assist the exporter with the procedures for payment of interest support according to regulations. Quarterly reports are prepared on indicators of loan turnover, debt collection turnover, and outstanding debt at the time, and at the same time, debt classification is conducted according to regulations to assess the export credit quality of each customer and all customers. The export credit departments periodically report the situation to the export credit department. The TDXK Board will synthesize the general situation, and at the same time, based on information on the economic, financial, and market situation; the credit management situation at the Exchange and Branches to promptly direct the deployment and implementation of specific measures to strengthen credit management, limit and prevent possible risks.


• In the management of TDXK quality


Along with the expansion of the scale of credit activities, credit quality management is given top priority. Credit quality management is one of the difficult and heavy tasks in VDB's credit activities, because in addition to the subjective efforts of credit officers, in addition to the regulations on collateral, etc., there are also objective impacts of the domestic economic situation in particular and the world economy in general, which greatly affect the quality of VDB's credit activities. In addition, there are cases where customers intentionally defraud and deceive credit officers. The credit debt group classification table shows that the bad debt ratio in 2011 and 2012 was very high, over 8.5%. This is an alarming thing about the quality of credit activities at VDB. In 2013, the bad debt ratio decreased, but was still high at 8.0%. Compared to the acceptable bad debt ratio of ≤ 3%, VDB's bad debt ratio is much higher, which shows that the quality of TDXK is problematic, but compared to the general situation of the entire economy and the entire banking system, VDB's bad debt ratio is not difficult to understand. By 2014, after debt restructuring, the bad debt ratio had decreased to 7.58%, and by 2015, the bad debt was only 7.02%. This is a positive sign, but much effort is needed to achieve the bad debt ratio as directed by the Government, which is no more than 3% of the entire industry in 2015. It is also necessary to analyze further that among the bad debts of VDB, group 5 debt exists, but not much, mainly group 4 and group 3 debt. Therefore, although the bad debt ratio is high, credit risks occurring at VDB are all handled from the risk reserve fund.

• Gradually improve the efficiency of credit appraisal work

The work of appraising and evaluating customers in many aspects such as appraising production and business plans, capital use plans and collateral as well as related legal factors has been carried out relatively well. The professional department has also guided customers to carry out quite complete procedures when borrowing advance capital for export and returning export documents to be considered for interest rate reduction according to regulations, which has been welcomed and trusted by customers. Creating trust and confidence in customers is considered VDB's success in export credit activities in the past time. Thanks to the professional efforts of the export credit department staff, the monitoring and direction


Close and specific supervision by the leaders of the TDXK department regularly ensures the quality of TDXK.

improved

Third: expand and develop customer relationships in many aspects.

• Strengthen coordination and connection with businesses borrowing capital

Through export credit activities at VDB, the specialized department of the Export Credit Department has coordinated with export enterprises in developing and implementing production and business plans and effective capital use plans. Through practical activities, the financial management level of enterprises having credit relations with VDB has been significantly improved. This is a positive sign, because enterprises not only improve their awareness and level of financial and accounting management, but also understand more deeply and specifically the Government's credit policy in particular and the Government's export promotion policy in general to have practical solutions, and at the same time, through that, disseminate information to other enterprises to access VDB's export credit capital nationwide as well as in each economic region.

• Number of contracts and disbursement levels continuously decreased

Every year, VDB has signed export credit contracts with hundreds of customers, disbursing tens of thousands of billions of VND. However, the number of signed contracts and the disbursement level in the past 5 years have tended to decrease continuously. Compared to the planned targets set by the Board of Directors, the loan turnover, debt repayment turnover and outstanding debt level basically reached a rate of nearly 90%. The growth rate of outstanding export credit over the past 5 years with an average annual rate of 6.03%. Although the growth rate is uneven between years, the average rate of 6.03% per year shows that in the difficult conditions of the economy, especially in export activities, VDB has made great efforts to complete this important task.

2.3.2.2. Limitations and causes

►Limitations

• Outstanding debt and export credit loan turnover of the entire VDB system are still too modest, with unstable growth over the years, negative growth in the period 2011-2015. If compared with assets in the labor contract, outstanding export credit only accounts for an average proportion of less than 6% and tends to decrease. If compared with the value of export turnover


In the past, with the corresponding products in the whole country, the credit value of VDB is still a very small number, accounting for less than 0.8% of the total export turnover. This is not commensurate with the position of VDB in implementing the Government's export credit policy; not commensurate with the potential of the export industries in the list of regulations of the Government. According to NCS, this is considered the biggest limitation in VDB's export credit activities in the past time.

• Although the State's export credit at VDB has been diversified and rich in credit forms such as loans to exporters (domestic enterprises); loans to importers (foreign enterprises); loan guarantees for exporters; bid guarantees for contracts for production, exploitation, and processing of export goods; and export contract performance guarantees. But in reality, the entire Vietnam Development Bank system has only implemented the form of loans to exporters and loan guarantees for exporters, while other forms have not been implemented. It is possible that other forms of export credit have a higher level of risk, or because the specialized staff is too small, other forms of credit have not been implemented. However, this issue must be viewed as one of the limitations of VDB in export credit activities. This is also a rather large limitation, if we have a more far-sighted and broader perspective on Vietnam's export credit policy. How to explain this issue? The problem is, when learning from the experiences of other countries in implementing the export credit policy, we all see that countries have proposed and implemented export credit policies with consistency and close coordination with each other. Countries not only provide credit to domestic enterprises, but also provide credit to foreign importers, creating a resonance to promote export development. Although the export credit policy of the Vietnamese Government has raised this issue, up to now, it has not yet implemented the form of lending to foreign importers for export credit. This is really a limitation in implementing Vietnam's export credit policy. It is necessary to consider implementing the form of lending to foreign importers in the near future.

• Although the regulations and rules on lending guidelines, debt management, and debt collection in TDXK have been innovated and are more specific, they still lack flexibility, are rigid, and do not follow reality closely. Some export companies are no longer interested in

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