Export Credit Development Experience of Some Vietnamese Commercial Banks and Lessons for Agribank

- Export credit for sellers

- Export credit for buyers:

This business aims to stimulate the export of Chinese goods and capital abroad. The borrower is the buyer, the buyer's bank or the Ministry of Finance of the buyer's country . The scope of the loan is that the borrower uses the loan money to purchase electromechanical products, synchronous equipment and high-tech products and services from China.

- Preferential foreign loans

In addition to export credit activities for sellers, export credit for buyers and preferential foreign loans, the Export-Import Bank of China also previously carried out export credit insurance.

2.4.2. Operations of Export-Import Bank of Malaysia Berhad

Export-Import Bank of Malaysia Berhad (EXIM Bank) was established on 29 August 1995 and is a wholly owned bank under the Ministry of Finance of Malaysia. EXIM Bank's role is to provide credit facilities and insurance services to support the export and import of goods, services and overseas investment in non-traditional markets as well as to provide export credit insurance, export finance insurance, overseas investment insurance.

- Exim Bank Malaysia's regular export-import credit products Provide financial support to Malaysian investors , contractors' overseas commitment projects such as infrastructure, manufacturing and other development projects. The purpose of this service is to finance the development, upgrading or expansion of infrastructure, construction plants and purchase of fixed assets, such as machinery and equipment with support up to 85% of the project cost or contract value; term up to 10 years.

- Buyer Credit Financing: Is a financing scheme extended to foreign buyers/importers to purchase Malaysian goods and services. Including goods produced in Malaysia and services in Malaysia or abroad.

- Supplier Credit Finance: Malaysian manufacturers and traders can take advantage of this service to support their export trade finance requirements through Exim Bank Malaysia's trade finance facility. The purpose is to provide financial support for the purchase of raw materials, components, and production costs of finished goods during the pre-shipment period.

- Guarantee Financing: The purpose is to facilitate the issuance of bonds for overseas contracts undertaken by Malaysian contractors and also to enable Malaysian investors to raise funds overseas.

- Export credit refinancing: Providing short-term pre- and post-shipment credit to direct/indirect exporters. Export credit refinancing is suitable for manufacturers or trading companies that have used valid credit lines provided with any commercial bank.

- EXIM Overseas Guarantee Facility (EOGF): The EOGF is to assist Malaysian companies in obtaining financing to participate in secured bidding activities for contracts overseas. EXIM Bank provides financial guarantees to financial institutions dealing with clients. The financing will be provided by the financial institution involved in lending to the client who is a contractor or subcontractor, or involved in

in the supply, financing or sale of goods, services or purely commercial service contracts provided they are owned and controlled by a Malaysian company.

2.4.3. Export credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade

To contribute to enhancing the competitiveness of export financing services, Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) always implements a loan program to support export enterprises, offering comprehensive solution packages to support export activities and increase the country's foreign currency revenue.

Many preferential policies to support export enterprises have been implemented by Vietinbank such as: Prioritizing capital sources for lending to export enterprises, especially in times of capital scarcity; regularly updating and introducing new export products and services; regularly introducing competitive interest rate, exchange rate, and fee policies in the market.

Vietinbank offers a variety of export credit forms, specifically:

- VietinBank finances the Exporter (XK) to purchase input materials for production and business activities (SXKD). Customers are financed with capital for production and business activities when there is a sales contract;

The exporter presents export documents to VietinBank to request a discount. After reviewing the export documents and current discount conditions,

VietinBank will make an advance payment to the exporter and send the documents to the collecting bank for payment. The discounting is done on the principle of reserving the right to claim from the exporter. Accordingly, the exporter will receive an advance payment from VietinBank immediately after delivery, instead of having to wait until the date of payment for the set of documents.

- VietinBank finances exporting enterprises to purchase input materials for production and business activities, including pre-shipment financing and post-shipment financing.

- Export factoring/ bilateral seller factoring VietinBank advances with recourse for payables

The maximum deferred payment period is 180 days, according to the payment method of deferred TTR, open account or deferred D/A.

Services include: Advances for receivables; Receivables Financing; Receivables Management ; Receivables Collection ; Buyer's financial risk insurance.

Benefits for Enterprises: Working capital financing for transactions not using traditional payment methods such as LC, D/P... ; Enhance competitiveness by meeting the importer's demand for deferred payment; Reduce/eliminate the risk of non-payment from the Importer/Buyer; Save time tracking debts and transfer debt collection to Bank experts to focus on production and business.

In 2017, VietinBank's outstanding export loans accounted for 9.9% of total outstanding loans, mainly focusing on loans for production, processing, and purchasing of rural agricultural products such as rice, coffee, cashew, shrimp, fish, etc. to serve the processing and production of export goods.

2.4.4. Export credit activities of Vietnam Joint Stock Commercial Bank for Investment and Development (BIDV)

BIDV is the third largest bank in the Vietnamese market in export-import activities. In 2016, while the growth rate of trade finance of Vietcombank, VietinBank, and Agribank was only around 10%, BIDV had a breakthrough growth, with the highest growth rate ever: 26.9%, which is 2.7 times higher than the growth rate of VCB and VietinBank. With this growth rate, BIDV continues to maintain its third position in terms of market share in import-export payments. This is also an impressive figure for BIDV in the context of the country's import-export turnover increasing by only 6.5% (the target is 10%) and BIDV's credit growth is 18%.

In 2016, the total number of customers generating import-export payment turnover was 9,137 enterprises, an increase of 3,353 enterprises compared to 2015. Of which, the large customer group (1,059 customers) accounted for 56% of import-export payment turnover, the rate of customers using trade finance products was quite high at 42%.

In 2017, BIDV aims to maintain its third position in the market, while increasing its market share to approach the market share of the first and second ranked banks. The increase in the market share of trade finance of banks depends largely on each bank's customer policy. BIDV's superior policy is the reason for the breakthrough growth in this field in recent times.

In addition to the preferential policies applied to super VIP customers, BIDV also has separate preferential policies for each customer group, in each different market, such as the Vietnam-Russia bilateral payment customer credit package with a disbursement scale of 3,000 billion VND, preferential policies for import-export enterprises with the Myanmar market with a loan balance of 1,000 billion VND,

preferential policies for prestigious import-export enterprises and preferential import-export credit packages for the last 4 months of 2016 with a scale of 100 million USD, preferential VND credit package for FDI enterprises with a scale of 5,000 billion VND...

In addition, BIDV also increased its market share by designing its own products according to customer characteristics. These include domestic L/C discounting products for OPEC Company with a discount limit of 150 billion VND, or UPAS L/C with periodic fee payment for Truong Hai Automobile Company with a capital usage limit of 140 million USD...

In 2017, the preferential credit package for export customers is still BIDV's core customer policy. The bank also continues to launch many new trade finance products, differentiate each customer segment for better care, develop products according to each customer's characteristics, promote customer support to penetrate potential markets, deploy to markets where BIDV has advantages including Russia, Myanmar, Taiwan..., thereby increasing market share to serve export enterprises...

2.4.5. Export credit activities of foreign trade bank (Vietcombank)

Vietcombank is a leader in import-export financing and has always achieved high growth rates. Vietcombank always selects good and sustainable sectors and businesses through reasonable customer policies to finance exports. Vietcombank's export credits focus on Vietnam's strong products such as: seafood, garments, rice, food, footwear, textiles, wood products, rubber, etc.

Implementing major credit programs under the Government's policy, Vietcombank provides preferential loans to a number of priority subjects, including export enterprises with effective production and business activities;