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Many banks have proposed trade financing solutions for enterprises. Photo: ST

"Blossoming" trade finance

Data from the General Department of Customs show that, in the first 10 months of 2020, despite being affected by the Covid-19 pandemic, the total value of Vietnam's exports and imports still reached US$439.82 billion, a slight increase of 2.6%over the same period in 2019. Of which,the total export value was estimated at US$229.65 billion,up 4.9%, and the total import value was estimated at US$210.17 billion,up 0.3%.

Thus, our country had a trade surplus of US$19.5 billion,much higher than the trade surplus of US$9.3 billion of the same period last year.

According to calculations, if Vietnam maintains the import and export momentum as above in the last two months of the year, the whole year’s figure could reach approximately US$540 billion, an increase of more than US$20 billion compared to 2019.

If Covid-19 doesn’t disrupt the global trade flow, the value of Vietnam's exports and imports willreachhigher levels. But the above results have also shown the strong growth of international trade, enterprises have seized opportunities, used many measures to overcome difficulties and stimulate import and export. Banks take part in launching trade finance products for enterprises.

In July 2020, Saigon - Hanoi Commercial Joint Stock Bank (SHB) launched an export finance product. Accordingly, SHB will finance working capital for customers to purchase raw materials, pay costs of production, process, and business for export orders with a sponsorship rate up to 90% of capital demand, and loan term of up to 12 months.

Mr. Nguyen Van Le, General Director of SHB, said that with this product, SHB’s customers will be sponsored as soon as they have export orders, so they can be proactive in finance, stabilize business and expand production.

Previously, SHB also provided a discount product for export documents with a maximum discount period of up to six months and various payment methods: letter of credit (L/C at sight, deferred L/C, L/C UPAS, letter of credit at sight may be deferred, transferable L/C);collection of payment (document against paymentD/P, document against acceptance D/A; CAD, cash against documents).

Similarly, Vietnam Maritime Commercial Joint Stock Bank (MSB) has also launched many suitable support solutions such as output contract financing, pre-shipment export finance, supply chain financing.

MSB's international trade movement and trade finance in the first nine months of 2020 recorded growth of 40%. Recently, MSB has also successfully implemented Swift GPI (Global Payment Innovation Initiative - Initiative for global payment innovation). This is a new technology solution for cross-border payments among banks through the cloud computing of International Payment Organization (SWIFT), helping to ensure international payment transactions quickly and efficiently.

Recently, Vietnam Prosperity Joint Stock Commercial Bank (VPBank) also launched online consulting services of international trade finance and international payment products to help enterprises overcome difficulties during the pandemic and promote international trade transactions.

Accordingly, customers are consulted on all matters related to trade finance products and international payments (including import/export L/C, UPAS L/C,collection of payment, international money transfer, bond/stand-by letter of credit, discount (L/C, D/A, D/P, TTR),sponsorship before/after shipment).

This service will help optimise benefits, minimise errors in transaction records, save time and costs for enterprises.

"The ticket" for trade

Along with the introduction of trade finance solutions, many banks also accompany enterprises by providing preferential fees for activities and transactions related to import and export, international trade.

For example, at VietCapital Bank, this bank offers a loan package with interest rates of only 7.5% and a reduction of international money transfer fees of up to 50% for import and export enterprises.

Both experts and enterprises said that thanks to the bank's help through trade finance products, enterprises will have more opportunities to improve their reputation and competitiveness, where negotiations and signing of the contract are easier.

According to Ms. Tran Hai Yen, Director of Bnew Trading and Services Co., Ltd, through the use of trade finance tools and import and export guarantee of the bank, enterprises will have more "tickets" to enter the fastidious markets or help work faster with partners. Not only that, Ms. Yen also said that trade finance of the banks also helpedenterprises reduce risks, especially risks related to interest rates, exchange rates, and payments.

However, there are still some opinions wondering about the costs when using the bank's services. But in fact, these costs will be completely commensurate with what enterprises receive, especially compared with the risks and losses that enterprises face when doing it on their own. Therefore, enterprises must pay attention and should use banking services to be assured of stepping into the international playing field, especially in the current uncertain context.