Shady foreign loan offers raise alarm

HA NOI — The State Bank of Viet Nam has issued a warning that some foreign individuals claiming to represent international institutions have recently approached ministries and municipal authorities, offering low-interest loans and non-refundable aid on condition of receiving a Vietnamese Government guarantee.

Therefore, the State Bank has issued Official Document No 7824/NHNN-TD reminding its branches and credit institutions nationwide to cautiously consider loan offers in accordance with foreign debt regulations.

Credit institutions were also told to work closely with law firms, embassies, credit rating agencies and bank agents to verify the financial capacity and legal capacity of foreign partners before entering any agreement. Credit institutions and central bank branches were also ordered to report all documents pertaining to foreign loan offering to the State Bank no later than December 31.

State Bank branches were further instructed to support municipal authorities in preventing credit risks arising from foreign loan offers. — VNS

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Liberty joins hands with bank for loan program

HCMC - Liberty Insurance and Orient Commercial Joint Stock Bank (OCB) signed an agreement last week to launch a loan program to provide financial support for those who want to buy cars.

Under the collaboration program named “Car Within Reach,” Liberty will offer insurance service to auto buyers while the bank will offer loans in Vietnam dong for customers to buy cars. The loan requires collateral including fixed assets, the car itself, or third-party guarantees.

OCB says the approved loan may be up to 100% of the car value for a maximum term of five years. The borrowing procedure is simple as the bank will confirm their approval within 24 hours.

The bank says repayment can be made by automatic account deduction or directly at any of its offices. Besides, the loan program also offers a discount rate of 0.5% per year off the standard interest rate charged by OCB.

OCB says it is cooperating with most authorized auto dealers in the country to extend more loans for car buyers.

Trinh Van Tuan, general director of the bank, says the “Car Within Reach” program is designed to offer consultancy not only on the bank’s loan programs, but also on the selection of cars and car insurance products. This will help save time for customers.

“We have studied and found that Liberty is appreciated for the auto insurance product thanks to its service quality, and simple, fair and fast claim procedures,” Tuan said in a statement.

Carlos Vanegas, general director of Liberty Insurance, pins hopes on the partnership, saying that it will create a premise for further cooperation programs between the bank and the insurance company.

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IFC grants loan to local securities firm

The International Finance Corporation (IFC), the World Bank’s private-sector funding arm, will provide Thien Viet Securities with a US$5 million loan to help the local firm develop investment banking services for small- and medium-sized enterprises in Vietnam.

“We have invested in a number of Vietnamese banks before, but this is IFC’s first engagement with a securities service provider in the country,” said Rashad Kaldany, IFC’s deputy president for Asia, Eastern Europe, the Middle East and North Africa, at the signing ceremony on Monday in Hanoi.

The loan has a three-year term and can be converted into shares of the company, according to a release issued on August 16 by the IFC.

The World Bank unit will advise Thien Viet Securities on risk management and corporate governance practices to help the emerging capital market player build its merchant and investment banking operations.

By helping the securities firm enhance its capacity to meet international standards, IFC will be able to replicate these practices in other sectors of the economy, particularly small and midsize enterprises that are currently overlooked by foreign investment banks, according to representatives from the IFC.

Thien Viet Securities offers investment banking services to local private companies seeking to gain access to capital market financing.

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