Need for trade finance highest in Vietnam: survey

TN News

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Vietnam tops the list of countries in the world needing trade finance, according to an HSBC report that surveyed 17 markets worldwide.

The global bank said that the number of Vietnamese businesses who said they need trade finance will increase to 74 percent in a first-quarter survey from 66 percent in the second half of last year.

The survey placed India second in terms of trade finance needs with the Middle East market coming in third.

The report said that traders from Vietnam were among the most confident, alongside the UAE and India, of increased trade activity and growth in the coming six months.

It said the majority of Vietnamese respondents 75 percent compared to 65 percent in the second half of 2009 expected trade volumes to increase.

They also shared this optimistic outlook as a higher proportion believed that the risk of buyers defaulting on payment would decrease, said the report.

It said there was a significant jump in the percentage [over three-fold] of Vietnamese respondents who thought that the risk of suppliers not honoring agreed trade arrangements would decrease. They felt the key reason for this was the improved financial health of suppliers, the report found.

Compared with the last survey, a larger percentage of Vietnamese respondents said they would accept smaller orders to reduce transaction exposure and export credit insurance, according to the report.

It added greater use of trade finance via banks were among the choices preferred by more Vietnamese traders to overcome non-payment risk from buyers, in addition to "offering more flexible payment terms."

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