Export firms urged to buy credit insurance

The Government's goal of ensuring that at least 3 percent of firms' export revenue, estimated to be worth 3 billion USD, is guaranteed against non-payment is failing to meet its target, a forum in Hanoi heard on Dec. 21.

At the meeting, which reviewed the programme's implementation last year, organised by the ministries of Finance and Industry and Trade in Hanoi, participants heard that Vietnamese exporters were unfamiliar with the norm of credit insurance.

Attendees heard that Vietnamese firms were instead using letters of credit or money-transfer to ensure payment.

Furthermore, firms complained that they could not afford to undertake the cost of taking out insurance against losses.

The finance ministry said insurance companies were not interested in offering this kind of service. It said just seven out of 29 insurance companies were willing to offer credit insurance.

The ministry added that foreign-invested insurance companies had signed credit-protection contracts with just 14 firms, worth only 77.55 million USD, accounting for nearly 0.1 per cent of the total country's export turnover.

During the meeting, finance ministry officials said they would offer training courses on credit insurance for exporters.

Deputy Minister of Industry and Trade Nguyen Thanh Bien said his ministry would encourage large corporations to take out credit-insurance schemes.

Under decision 2011/QD – TTg, issued by the Government in November 2011, 23 commodity groups would receive export guarantees up to 2013, such as seafood, rice, coffee, fruit and vegetables, textiles, garments and footwear.

Seven insurance companies have been selected to run the programme – Bao Viet, Petro Vietnam Insurance (PVI), Bao Minh Joint Stock Corporation, Bao Viet Tokio Marine, QBE Vietnam, Chartis Vietnam and United Insurance Co of Vietnam.

A recent survey conducted by the Ministry of Industry and Trade involving 200 exporters revealed that all of them wanted to be involved in the export credit-insurance programme./.

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