Credit Ratings - Important Trade Promotion and Assistance Tool for Enterprises’ Development

Credit Ratings - Important Trade Promotion and Assistance Tool for Enterprises’ Development

The Vietnam Chamber of Commerce and Industry (VCCI), which presents the Vietnamese business community and assists the development of enterprises, has emphasised on sharpening the competitive edge of enterprises in recent years. In an effort to assist VCCI to build images and credit levels of Vietnamese enterprises in the country’s international integration, the Vietnam Business Forum (VIB Forum), a foreign affairs magazine of VCCI, has cooperated with the Credit Ratings Vietnamnet Centre (CRVC) to promote a credit ratings service, the first of its kind in Vietnam. On this occasion, we had a cosy talk with Dr. Doan Duy Khuong, VCCI Vice President and Editor-in-Chief of VIB Forum, about this new service, especially about benefits of enterprises when taking part in the credit ratings activities.

The credit rating is a new service in Vietnam. What do you think about the establishment of a credit ratings agency in this context?

The credit rating is common in the world. Almost all developed nations and in Southeast Asian nations have agencies specialising in this service. This is crucial service for a market economy and especially for enterprises.

The establishment of a credit rating agency will be an information bridge for enterprises and investors, not only those on the stock exchange but also those want to seek partners. On the other hands, with objective ratings, enterprises will have more information to adjust their business strategies and improve their management methods.

Which benefits will enterprises obtain when taking part in the credit rating service?

When involving in the credit rating service, enterprises will receive independent and objective information assessments about financial situations and solvency. In addition, they will be provided with financial consultancy services, management, public relations (PR) etc. They will be awarded credit rating confirmation certificates and at the end of each year they can attend a large-scale ceremony. Enterprises with high credit ratings will be honoured and this will help popularise and develop their trademarks. Besides, during the international economic integration process, foreign partners usually consult certain organisations to confirm confidence of their future partners before investing, joint-venturing or cooperation. However, enterprises must provide their full and exact documents and information about financial and non-financial situations under the request of the credit ratings agency. In addition, they have to create favourable conditions for credit ratings cadres to check up and assess the information.

What are major differences between a credit ratings agency and other organisations like financial consulting, information service and auditing firm?

Other organisations like financial consulting, information service and auditing firms mainly assess a business basing on its financial situations. But the credit rating covers not only financial criteria but also non-financial criteria such as their competitiveness, prospects of a product, market trends, consumers’ feedbacks, services of enterprises, etc. The rating results will be based on analytical results between financial and non-financial criteria, and sectors and operation scales of enterprises.

We anchor our hopes on the success of CRVC and have set up a long-term cooperation plan. Being a first credit rating agency, together with Vietnamnet Online Newspaper, CRVC possess a professional rating process with consultation of world-leading rating organisations like Moodys and Standard & Poor’s, with adjustments to Vietnamese actual situations and with assistance of the best telecommunication system in Vietnam and a wide and professional information collection system. I firmly believe that CRVC can become a leading credit rating agency in Vietnam and can secure its prestige in the world.

So, in your opinion, which requirements CRVC needs to do to become a leading credit rating agency in Vietnam?

In the current context, human source are the most important issue. The CRVC must be staffed with professional and excellent experts and equipped with scientific, objective, exact and suitable rating processes applicable in Vietnam’s economy. Rating results will be processed by financial and non-financial experts with full and exact information checked with international standards. Finally, the Assessment Council with senior experts will finalise the ratings. Independence, objectiveness, honesty and exactness are indispensable in all processes of ratings and the final result will be made basing on results from previous processes.

Popularisation is another important condition. If the CRVC want to rate enterprises and to affirm itself, it, first of all, has to build its image and prestige in the business community.

• Reported by Hoa Dao