The situation of supply chain financing for business in techcombank and bidv in vietnam from 2014 to 2017,graduation thesis

BANKING ACADEMY FACULTY OF FOREIGN LANGUAGE -*** GRADUATION THESIS THE SITUATION OF SUPPLY CHAIN FINANCING FOR BUSINESS IN TECHCOMBANK AND BIDV IN VIETNAM FROM 2014 TO 2017 Student : Mai Hien Anh Class : K16ATCC Student’s Code : 16A7510004 Lecturer : Nguyen Phuong Lan (MA) Hanoi, May 2017 TABLE OF CONTENTS ABSTRACT ACKNOWLEDGEMENT DECLARATION LIST OF ABBREVIATIONS LIST OF FIGURES AND TABLES CHAPTER 1: INTRODUCTION I RATIONALE II THE PURPOSE OF THE STUDY III THE SCOPE AND LIMITATION IV RESEARCH METHODOLOGY V THESIS STRUCTURE CHAPTER 2: THEORETICAL BACKGROUND OF THE STUDY I SUPPLY CHAIN 1.1 Definition of supply chain 1.2 Evolution of supply chain 1.3 Factors affecting supply chain efficiency II SUPPLY CHAIN MANAGEMENT 2.1 Definition 2.2 Purpose and Goals 2.3 The role of supply chain management 12 2.4 Main issues in supply chain management 13 III BANKS IN SUPPLY CHAIN FINANCING 15 3.1 Supply Chain Finance 15 3.2 Banks’ supply chain financing products 16 3.2.1 Banks’ financing products for domestic supply chain 16 3.2.2 Banks’ financing products for multinational supply chain 18 3.3 The benefits of banks in supply chain financing 20 3.4 The challenges of banks in supply chain financing 21 3.4.1 Organisational challenges 21 3.4.2 Technological and Digital challenges 22 3.5 The solutions to supply chain financing 23 CHAPTER 3: THE SITUATION OF SUPPLY CHAIN FINANCING FOR BUSINESS IN TECHCOMBANK AND BIDV IN VIETNAM FROM 2014 TO 2017 24 I TECHCOMBANK 25 1.1 About Techcombank 25 1.2 Techcombank's supply chain financing products 26 1.3 The situation of supply chain financing in Techcombank 29 1.3.1 “Masan distributors financing” product by Techcombank 29 1.3.2 The situation of other financing products 37 1.4 Achievements and problems of supply chain financing in Techcombank 38 1.4.1 Achievements 38 1.4.2 Problems 39 II BIDV 40 2.1 About BIDV 40 2.2 BIDV's supply chain financing products 41 2.2.1 Financing various types of business 41 2.2.2 Financing seafood supply chain 42 2.2.3 BIDV factoring service 43 2.3 The situation of supply chain financing in BIDV 44 2.4 Achievements and problems of supply chain financing in BIDV 46 2.4.1 Achievements 46 2.4.2 Problems 46 CHAPTER 4: PROBLEMS AND SOLUTIONS FOR SUPPLY CHAIN FINANCING IN VIETNAMESE BANKS 48 I PROBLEMS FOR SUPPLY CHAIN FINANCING 48 II SOLUTIONS AND RECOMMENDATIONS 50 2.1 Solutions for the access to capital of businesses 50 2.2 Solutions for convincing businesses to use SCF 52 2.3 Solutions for the supply capacity of enterprises 53 CONCLUSION 56 REFERENCES 57 ABSTRACT Supply chain is becoming one of the most discussed topics in business literature and is considered by many organizations a key strategic element Supply chain is all the activities related to a product life, from raw materials to delivering to the customer Today, markets have become more dynamic with rapid changes in customer requirements, so it is important that companies have to ensure that materials and information flow smoothly in a supply chain However, in order to have an effective and efficient supply chain, businesses need to manage their working capital well Therefore, supply chain financing has gained an increasing interest from companies across the country Supply chain financing can be a simple way of improving capital, releasing cash and decreasing supply chain risks In Vietnam, Techcombank and BIDV are considered two of several leading banks in providing supply chain financing products for businesses The purpose of the thesis is to analyze the supply chain financing situation in the two banks, as well as indicate problems in supply chain financing and suggest some possible solutions One of the supply chain financing products that Techcombank was and is being quite success in is “Masan distributors financing” product Meanwhile, BIDV is well-known for their car supply chain financing Although the supply chain financing activity in Vietnamese banks have faced some difficulties such as businesses still have problems in borrowing capital from banks or their supply capacity is weak, commercial banks as well as The State Bank of Vietnam are always working on new policies and solutions to improve their products for the best of the customer ACKNOWLEDGEMENT It is my great pleasure to thank all the people who made this thesis possible First and foremost, I would like to express my sincere thank to my lecturer, Mrs Nguyen Phuong Lan, for her constant support, insightful guidance and directions during the work process of this thesis With her experience and knowledge, I have learned a lot from the interactions with her I am also very thankful to my parents for their care, support and trust, without which I could not have completed this thesis Finally, I would like to thank all of my friends in Banking Academy, especially the three friends who have been working on their graduation thesis with the same lecturer as me, for the friendship, help, support and fun To all, thank you for being there for me and making this journey a worthwhile and rewarding adventure DECLARATION I declare that this thesis is a presentation of my original research work and has not been submitted for any previous degree Whenever contributions of others are involved, every effort is made to indicate this clearly, with due reference to the literature LIST OF ABBREVIATIONS Abbreviations SCM MRP JIT TQM CEO SCF LC HTC FMCG SMEs NII ATM FDI US AEC VND USD JPY HKD Original Supply Chain Management Manufacturing Resource Planning Just In Time Total Quality Management Chief Executive Officer Supply Chain Financing Letter of credit Hyundai Thanh Cong Company Fast Moving Consumer Goods Small & Medium Enterprises Net interest income Automatic Teller Machine Foreign Direct Investment United States ASEAN Economic Community Vietnam Dong United States Dollar Japanese Yen Hongkong Dollar LIST OF FIGURES AND TABLES Figures/ Tables Figure Figure Figure Figure Figure Figure Figure Figure Figure Table Table Table Table Title Page The supply chain model Supply chain financing process The supply chain process involved Masan distributors The number of distributors used "Masan distributors financing" product 2014-1015 The number of distributors according to geographical distance Pie chart showing new customer concerns - 2014 Pie chart showing current customer concerns - 2014 Total income of BIDV from the financing program in the last months of 2016 How much has the Supply Chain Finance solution decreased working capital? Expected revenue of Techcombank from the program Result of the "Masan Distributors Financing" program in 2015 Policies and mechanisms to approach the entire chain of distributors Result of Hyundai supply chain financing product 16 31 31 34 35 35 45 52 32 33 40 45 CHAPTER 1: INTRODUCTION I RATIONALE With the trend of economic integration and globalization go on strongly today, businesses need to have reasonable strategies to produce competitive products To achieve this, they not only have to satisfy customer needs with products or services, but also pay more attention to the flow of materials, the way products are designed and packaged by suppliers, and the way products are delivered and maintained by distributors Moreover, in this fierce competition situation of the global market, the appearance of more and more new and creative products and the increasing level of customer expectations have promoted businesses to invest and focus more on their supply chain This coupled with great breakthroughs in communication and transport technologies have enhanced the development of supply chain One of the most important but very complex issues in supply chain management for businesses is financial management Typically, the product cycle has a direct impact on the capital turnover of a business Businesses have to deal with problems related to payment term, receivables and payables, assurance of payment, etc This is a complex issue required high professionalism, and it is not only costly to businesses involved in supply chain, but also takes a lot of time to research, develop, and train staff Furthermore, many Vietnamese businesses find it difficult to mobilize enough capital to invest in supply chain Therefore, the need for commercial banks as financial intermediaries to provide capital and manage the cash flow from the beginning to the end of the supply chain becomes urgent and irreplaceable However, the concept of supply chain or supply chain financing is still new in Vietnam There are only several banks in Vietnam that provided supply chain financing products, typically Techcombank and BIDV Therefore, the thesis selects the research topic: The situation of supply chain financing for business in Techcombank and BIDV in Vietnam from 2014 to 2017 • Apply the most reasonable foreign exchange rate, flexible asset assurance Application, using condition: • Provide relevant documents: legal documents, enterprise’s financial, application documents, loan options, etc in specified by BIDV regulations • Commit using the service and transfer revenue from business activities to BIDV • Appraisal and approval according to BIDV's procedures • Sign credit contracts 2.2.3 BIDV factoring service At BIDV, exporting factoring service (international factoring service) has been developed for the last two years and offered a number of advantages and improvements for clients Firstly, BIDV may advance up to 98 percent of the invoice value to the exporters with the factoring term up to 220 days and no collateral required (if transactions meet some certain requirements) As a result, the cash flows of exporters are accelerated since the exporting factoring service fastens payment collections and working capital cycles, and helps to develop manufacturing and trading operations Secondly, the receivables of enterprises are assured resulting to no existence of tied-up capital and bad debts Thirdly, this service has reversed the responsibilities of debt collections from enterprises to BIDV, enterprises may reduce time- and cost-consuming on the administrations and documentations of debt collections, maintain good relations with other partners as well as authorities, and concentrate on improvement of manufactures Finally, the exporting factoring service increases the competitive advantages of enterprises when enterprises accept reimbursement methods without worries about the efficiencies of working capital Moreover, in order to increase benefits to our clients, BIDV has signigicantly improved its factoring service First, exporting markets in the world has been widened Years ago, exporting factoring service was restricted to the exporting markets in the US and Canada Nowadays, most clients might use BIDV’s factoring service in any exporting markets in the world, not only in North America Apart from exporting markets, the currency used in exporting factoring service has been persified Currently, not only transactions in US dollars but also in other curencies such as euro, JPY and HKD could be accepted for the exporting factoring service 43 Factoring service in Vietnam will become more popular and be developed considerably together with other traditional types of credit Implementation and development of factoring service will increase BIDV’s competitiveness, especially in the circumstance that Vietnam is quickly integrating with the global economy In general, BIDV’s supply chain financing products are highly appreciated by customers as BIDV have good reputation and their products are variety, competitive and bring many benefits to customers 2.3 The situation of supply chain financing in BIDV Facing with increasingly strong competition from regional and international financial institutions, BIDV has decided to improve its ability to provide innovative financing packages and give advices for financial institutions about solutions that help them have access to capital, thereby enhance the role of the bank Among the financial packages carried out for enterprises in the past few years, the supply chain financing model has been vigorously implemented by BIDV and obtained a very good initial result One of the typical financing projects is BIDV's cooperation with Hyundai Thanh Cong Vietnam in financing the supply chain of this company in 2016 In order to support capital for agencies and businesses wishing to buy Hyundai cars, BIDV has cooperated with Hyundai Thanh Cong Vietnam Joint Stock Company (HTC) to spend 100 billion VND to finance the company’s supply chain with many special treatments In particular, agencies are supported up to 95% of the car value and received preferential interest rate and attractive guarantee fee; they are also able to apply a flexible collateral mechanism (in which they can mortgage assets made from the loan) In addition, BIDV also makes the cost of money transfer free for agencies when they purchase cars for Hyundai Thanh Cong Vietnam within 06 months Moreover, businesses buying Hyundai cars are supported with the maximum loan up to 85% of the car value with a preferential interest rate of only 7.8% per year and also received a flexible collateral mechanism (in which they can mortgage assets made from the loan), simple and quick procedure and many other attractive treatments 44 The program is applied to all businesses who had signed a contract to be a HTC agency with HTC as well as businesses who wish to purchase cars from HTC to invest in business operations or satisfy the travel needs of the business Unit: billion VND Criteria 12/2016 Total operating income 3.1 Net interest income from loan 2.6 Net income from fees 0.2 Other net income 0.3 Profit before tax 1.3 Total operating cost 1.8 Table 4: Result of Hyundai supply chain financing product According to the table, we can see that BIDV’s product to finance HTC’s supply chain has just been applied for months – from September to December 2016 – but has achieved a positive result The profit after tax that BIDV gained from the product reached 1.3 billion VND Let’s have a look at the monthly total income of BIDV from the program in the bar chart below Unit: billion VND Total income of BIDV from the program in months 1.4 1.2 0.8 0.6 0.4 0.2 September October November December Figure 8: Total income of BIDV from the financing program in the last months of 2016 45 In the first month that BIDV carried out the program to finance the car supply chain of HTC, the total operating income was 0.7 billion VND Then in October, this number reduced slightly to 0.6 billion VND and continued to remain stable in November However, the product’s total income climbed significantly to 1.2 billion VND in December, which doubled the figure in the previous month The demand of customers to buy new cars in this month was higher than usual due to this was the ending time of the year This result of BIDV was very good as the product was new to customers According to HTC, the number of cars selling in the last months of 2016 has increased considerably, showing through the figure of HTC sales HTC representative said that this company sold about 36,400 cars in 2016, increased by 34% compared to the same period in 2015 In particular, in December 2016, with attractive promotions and support program from bank, sales rocketed by 50% compared to November The program was implemented throughout BIDV system from Quarter III/ 2016, showing the practical cooperation and support of BIDV for customers who take part in the supply chain of Hyundai Thanh Cong Vietnam, as well as contributing actively to development of the car business and distribution markets in Vietnam In addition, BIDV also applied the same program to Truong Hai Automobile (THACO) 2.4 Achievements and problems of supply chain financing in BIDV 2.4.1 Achievements - Finance the car supply chain for Hyundai Thanh Cong Company and THACO - Provide various types of supply chain financing products that satisfied customer needs - BIDV has been awarded “The Best Domestic Trade finance Provider 2017” by Euromoney magazine, a well-know economic magazine in the United Kingdom 2.4.2 Problems After analyzing the supply chain financing situation of BIDV, we can come to a conclusion that there are two main problems Firstly, businesses find it difficult to access to banks’ financial support The next one is that the supply 46 capacity of businesses is still weak so if banks invest in the supply chain, they cannot make many profits There is no question that BIDV’s principles of supply chain finance (SCF) are strong and that the correspondent benefits are considerable The perspective to get financed on the basis of the client’s creditworthiness should line up multitudes of roaring companies demanding for such an attractive—and apparently low cost—facility Yet, reality shows that SCF programs are evolving very slowly and are far from widespread adoption Financial institutions have invested significant resources in money, time, and staff to develop and market SCF programs but have so far obtained relatively small returns compared to the initial expectations Non-finance companies represent a growing SCF alternative to banks but their firepower is a small fraction of what financial institutions may put in place An initial overview of the market and of its players suggests likely valid reasons for such a slow uptake: • • • • • • • The level of information among companies about SCF is still low Banks are reluctant to change “old-fashioned” credit-checking, risk and collateral management processes and adapt them to the new offerings Companies have already financing lines in place and not want to change Some large multinationals are already running self-made SCF programs Companies not line up finance specialists in SCF program teams Accounting and auditing issues may advise against the introduction of SCF programs Company internal disconnects between treasury and procurement functions represent a serious concern 47 CHAPTER 4: PROBLEMS AND SOLUTIONS FOR SUPPLY CHAIN FINANCING IN VIETNAMESE BANKS I PROBLEMS FOR SUPPLY CHAIN FINANCING There are three main common problems for the supply chain financing activity in the two banks in particular and Vietnamese banks in general Vietnam market is strongly growing and attracting more foreign investors which open for both international and domestic trade flows However, opportunities of SCF are also different between key markets like China, India, Singapore, Hong Kong with more established financial markets vs countries like Vietnam, Bangladesh, Cambodia etc where the companies, especially SMEs not have same level of capital access So the first problem for supply chain financing is that it is very difficult for businesses to access bank loans It is very difficult for businesses participating in the supply chain to have enough capital when it is hard for them to access to banks’ funds Bank’s loans currently meet only 50% of demand for loans from businesses Moreover, loans mostly in short-term, long-term capital is still very low and only 30% of SMEs have access to bank loans In addition, enterprises cannot access loans that have not been restructured and/or restructured in accordance with Circular 09 of the SBV, more difficult to access loans at the preferential interest rate Although the State Bank of Vietnam still has a policy to reduce the interest rate by 1-1.5%, especially the interest rate for medium and long term loans, but most of the SMES hardly have high rate of return of more than 10% to bear the current interest rate, inventory is still high, consuming is difficult, many sectors, industries still make heavy losses if continue to business Businesses still find it difficult to access new loans because most guarantee assets are depleted, their total profitable assets and revenues are declining, and their scale is shrinking Major representation of Vietnam markets are small and medium enterprises (SMEs) and family-owned companies with limited resources Another problem is that it is a challenge for banks to convince SMEs to use SCF to manage their purchase orders (POs), shipment, receivables, and financing request, which improves their access to affordable working capital 48 Changing mindset of traditional financing way is a real break-thru in the less developed markets like Vietnam The key point is that the advantage of SCF that help SMEs lower cost of goods sold, improve cash flows, and better manage their relationship with a larger base of buyers/sellers must be communicated well supported by both banks and government regulatory framework, so that SMEs realize that the benefits of joining SCF outweigh the extra costs Frontier markets in Asia like Vietnam are having less realiable credit bereau, and providing finance to clients like SMEs will be more strictly considerable, more expensive and require more complicated procedure of collateral, while SCF is linked to sales and can provide much cheaper source of funding Changes of business environment strongly impact on implementation of advanced SCM initiatives With the growth trend of multinational companies, joint ventures, strategic alliances, business partners, good logistics infrastructure, regulatory framework play critical role in helping companies to build up good collaboration with partners, however, is still moving slowly in Asia emerging markets, resulting in more difficulties in SCF implementation The last problem for bank’s financing activity is businesses’ capacity It is hard for Vietnamese enterprises to participate in the global supply chain due to limited competitiveness, lack of connection, as well as they cannot meet the needs of foreign investors Banks has also provided update on global supply chain financing in the deployment and expansion of supply chain financing services in Vietnam, to help businesses have access to the funding According to Kyle Kelhofer, IFC's Country Manager for Vietnam, Cambodia and Laos, supply chain financing helps to address capital shortage in Vietnam, as it allows suppliers to increase working capital by converting receivables and inventory into cash quickly and access low cost loans based on the buyer's high level of creditworthiness Although many international corporations have invested in Vietnam but due to the limitation of competitiveness, production, supply and logistics infrastructure, most Vietnamese enterprises only participated in the lowest stages in the supply chain, which are assembly and processing The policies to associate FDI enterprises with domestic enterprises are also inadequate Banks also find it difficult to finance a business's supply chain when the profit is less attractive than investing in real estate or other fields Supply chain management capacity of enterprises is still limited, while real estate sector 49 attracts and consumes large amounts of capital in a short time Moreover, financing real estate is also considered a chain financing, which included construction contractor and customer chain The solutions will be suggested based on these three problems II SOLUTIONS AND RECOMMENDATIONS 2.1 Solutions for the access to capital of businesses To help Vietnamese SMEs have "fulcrum" to enhance their competitiveness, especially in the context of the upcoming AEC, it is necessary to unify the following viewpoints: • Provide SMEs with market, land, preferential capital, technology, training and management related issues on the basis of speeding up institutional reform, information transparency, authentically remove barriers to administrative procedures; • Renovate to more appropriate approaches in credit operations and bank credit guarantee in the direction of concentrating on the main points and closer to the real situation of enterprises; • Promote sustainable credit growth without increasing the risk burdens for commercial banks, promote the model of "the combination of the whole political and banking system" With the above point of view, the strategic solutions are: • Recommend the Government to adjust the target of the SME Development Program for the period of 2011 - 2015 in the direction to pay more attention to the restructuring of SMEs, mainly focus on quality and not quantity assurance; • Coordinate with The State Bank of Vietnam and relevant agencies to conduct a thorough and long-term study of credit mechanisms and policies to support the development of SMEs in the period 2015-2020 with a vision to 2050, meeting the new requirements about the integration and development prospects; • Utilize flexibly a number of monetary and credit policy instruments by The State Bank of Vietnam to support the development of the SMEs sector through the management, transaction, inspection and supervision of the commercial banks system and other financial institutions The central 50 bank must have the right to control all major financial flows that support the SMES sector in relation to different "channels" in the economy; • Renew the policy of recruiting, training, re-training and providing the best possible remuneration for credit officers throughout the banking system, from the step of planning, policy management and inspection, supervision to the step of appraising and approving the credit in the direction of increasing the proportion of staffs with multiskills and multidiscipline concerning various areas such as economic, technical and market sector of SMEs In addition, in order to support SMEs, there are some possible following solutions: • The State Bank of Vietnam has a clear and decisive policy on dealing with bad debt by actively promoting effective credit growth, contributing to stimulating the real economy to prosper, increase the social purchasing power, release inventory, encourage enterprises to invest in production expansion, increase the total credit demand; • The State Bank of Vietnam should temporarily consider extending the beneficiaries of debt freezing, reducing the interest on old loans, boldly offering new loans at low interest rates to the number of enterprises that have been facing difficulties and in bad debt due to the mechanisms, policies and the harsh impacts of the market; • The State Bank of Vietnam should provide specific guidance on the criteria for building a client credit system in each commercial bank, rebuilding the credit guarantee mechanism to be more suitable for SMEs, facilitating the legal framework and favorable policies to encourage the "credit" loans for SMEs sector; The State Bank of Vietnam proposes to the Government some preferential mechanisms and policies for commercial banks to promote lending to support SMEs Expand the beneficiaries of credit mechanisms and policies related to SMEs, expand the scope of the "stimulus" credit package to some SMEs involved in developing the network of production and consumption of goods in deep-lying, remote, border and island areas 51 2.2 Solutions for convincing businesses to use SCF SCF represents an innovative opportunity to reduce working capital Its underlying mechanism is reverse factoring making the technique buyer- rather than supplier-centric A survey results show that, on average, companies reduce working capital by 13% and suppliers reduce working capital by 14% Three factors differentiate successful implementations of SCF from less successful ones: Choosing the right banking partner, ensuring CEO sponsorship, and involving at least 60% of the supply-base In the past, suppliers often reacted to these long payment delays by factoring their receivables when they needed cash Factoring is a transaction in which suppliers sell receivables to factors for immediate cash Because the receivables are sold rather than pledged, factoring is different from borrowing – there are no liabilities on the suppliers’ balance sheet Typically, suppliers sell receivables from more than one buyer Thus, factors have to evaluate buyer portfolios before entering an agreement This has made factoring an expensive source of finance in emerging markets A lack of historic credit information or credit bureaus, fraud, and weak legal environments have meant high operating costs Today some buyers are recognizing their suppliers’ difficulties in accessing finance And instead of taking a “no tolerance” approach, they have started to implement a collaborative approach termed Reverse Factoring or Supply Chain Finance Businesses will consider using SCF products of bank if they offer them enough benefits Figure 9: How much has the Supply Chain Finance solution decreased working capital? 52 The data paint a fairly positive picture: The 23 executives using an SCF solution report an average reduction in working capital of 13% Similarly encouraging is the observation that SCF seems to help suppliers too The same 23 executives report that, on average, their suppliers were able to reduce working capital by 14% by participating in the SCF program Asked about intangible benefits, more than half of the respondents – 57% – say that SCF helps standardize payment terms and 52% say that SCF helps improve supplier relations Vietnamese banks should learn the supply chain financing model from famous Western banks that have the best supply chain finance such as Standard Chartered Bank and Citibank to improve their products in order to satisfy customer needs Banks must raise awareness and have better understanding about supply chain financing to give advice for businesses It is important for the bank to analyze the business cycle of the enterprises and understand their needs so that solutions can be tailored to the current situation 2.3 Solutions for the supply capacity of enterprises The most essential solution now is the rapid modernization of technology, the training of high quality labor to soon be able to produce standard products Domestic enterprises currently invest very little in science and technology, so the labor productivity is low and the practice capacity is poor This hinders businesses from being eligible to join the global value supply chain To survive, each enterprise must set itself a suitable business model At the same time, enterprises must regularly update information on the domestic and world economic situation; avoid unsettled competition from other partners when the market is fully opened In order to overcome difficulties and create favorable conditions for enterprises to increase their competitiveness and integrate actively, the Government has requested the ministries, agencies and localities to continue drastically directing the effective and timely implementation of solutions provided in Resolution No 19 / NQ-CP dated March 18, 2014 on improving the business investment environment and enhancing the national competitiveness; as well as timely proposing amendments and supplements to suit the actual requirements 53 Strictly abolish administrative procedures in order to reduce the cost and time of enterprises in the issues related to establishment and bankruptcy of enterprises, land, investment, construction, declaration and payment of tax, customs and insurance, electricity accessing Continue to step up the implementation of groups of solutions and programs of action for the development of small and medium enterprises in the period of 2011-2015 and propose the content for the development of these enterprises in the period 2016-2020 The Government requires putting the Small and Medium Enterprise Support Fund into operation soon On 26/12/2014, the Ministry of Industry and Trade has signed the Decision No 11855 / QD-BCT approving the National Trade Promotion Program 2015 with 212 projects of 70 units with the total cost of 100 billion VND The early approval of the program will facilitate the implementation acceleration of the projects by the lead agencies, enable enterprises to actively participate in trade promotion activities from the beginning of the year as usual international practice Avoid accumulating all the activities of the program to the end of the year, thereby help businesses take advantage of more business opportunities inside and outside the country Accordingly, the business community also proposes to the Government to support and guide business issues when it comes to integration, or financial support, or to select and support large businesses in the key sectors or areas for competition and reciprocation with foreign enterprises in order to protect the production and consumption of domestic goods… Just as South Korea, which has policies to support and create favorable conditions for large corporations in the country to strongly develop and have global competitiveness and influences Solving the problem of supply capacity of domestic enterprises helps to completely resolve the restrictions on linkage policy of FDI enterprises with domestic enterprises To the problems concerning the supply chain management, one of the biggest challenges that many enterprises have to cope with is the change management Every single enterprise must once cope with changes However, it is more likely to change the marketing, product and financial strategies than change the supply chain Is it too rigid and motionless to remove? The answer is no It all lies in the vision and capabilities of the leader To implement the supply chain, it requires a great organizational change, well organized departmental 54 coordination, information sharing and common planning work This is also the common psychology of Vietnamese enterprises in the transition to fit the requirements of the new era The leaders need to outline the future directions This is an important step that cannot be ignored by the enterprises taking part in the supply chain and it also determines the development of the supply chain model of the whole Vietnamese economy in the future First, the supply chain will have to meet the actual needs in a better way In the past, supply chains were "passive" and based primarily on demand forecasts This has made inventory management in the supply chain more and more complex, as the supply chain is unlikely to respond well when actual demand changes compared to forecast However, in the future, the supply chain will start with the actual demand, so that only when there is a formal order the supply chain will begin to operate This will make the inventory virtually nonexistent in the supply chain while still well-meeting customer demand In addition, the supply chain will become more environmentally friendly and socially responsible Being more environmentally friendly allows the supply chain to grow sustainably Wal-Mart, for example, has stated that Wal-Mart's supply chain will commit to three goals: (1) 100% of the product is supplied using recycled energy, (2) achieve 0% of defects, (3)only sell products that sustain Wal-Mart's resources and environment Besides, experts appreciate corporate social responsibility programs that are "integrated" into the global supply chain This also allows companies to build sustainable supply chains Finally, build partnerships with suppliers and customers by bringing the suppliers closer to the customers One of the factors to success of a supply chain is the ability to cooperate among the parties Companies with leading supply chains are gradually establishing collaborative models with suppliers and customers In a regular supply chain, suppliers and customers are usually at the beginning and at the end of the chain Therefore, the idea is to make the two links as close as possible 55 CONCLUSION It can be said that the supply chain financing for Vietnamese enterprises is still in the initial stage of formation, so there are not many domestic enterprises having accessed to this management This is the reason for the fact that banks have not focused on developing financial products for the supply chain At present, banks that are not owned by foreign factors but have supply chain financing products for businesses are only some banks such as BIDV and Techcombank Other banks are still in the process of researching and developing supply chain product financing policies, without a specific process or a particular product Vietnam's joining the ASEAN Economic Community (AEC) or signing of the Trans-Pacific Strategic Economic Partnership Agreement (TPP) will give domestic firms the opportunity to join the supply chain of large corporations in the world or even create their own supply chain Although this is difficult, not only from outside factors such as state policies or FDI companies but also from the capacity of the Vietnamese enterprises themselves However, with a clear and determined target of change, the supply chain in the near future will no longer be a novel concept for most financial institutions in Vietnam In parallel with the development of supply chain model among businesses, the supply chain financing products of Vietnamese banks also have many breakthrough changes, with special features, unlike other banks around the world Creating the suitable products to meet the needs of businesses is a difficult and long-lasting task, which requires efforts of not only commercial banks but also businesses themselves and state agencies 56 REFERENCES ThS Nguyễn Kim Anh, 2006, Giáo trình Quản lý chuỗi cung ứng, Đại học mở bán cơng TP Hồ Chí Minh ThS Lương Thị Hoa, 2013, Bài giảng nhập môn Quản trị logistics & Supply chain, Đại học Văn Lang Sanjay Dalmia, 2008, Financial Supply Chain, McGraw-Hill Education, India Erik Hofmann & Oliver Belin, 2011, Supply Chain Finance Solutions: Relevance – Proposition – Market Value, SpringerBriefs in Business Anne Marie Van Swinderen & Grace Mungai, 2015, GrowthCap, Kenya Financial Sector Deepening programme Council of Supply Chain Management Professionals, Definitive Guide to Integrated Supply Chain Management: Optimize the Interaction between Supply Chain Processes, Tools, and Technologies Achmeyer William F., Walmart Stores Inc Case, Tuck School of Business at Dartmouth, Center for global leadership Michael Hugos, Essential of Supply Chain Management 57