Under a new regulation issued by the State Bank Governor, factoring means the credit institutions’ provision of credit to goods sellers by repurchasing receivable amounts arising from the goods purchase and sale already agreed upon by the goods sellers and purchasers in the goods purchase/sale contracts.
Credit institutions that may provide the factoring service include State-owned commercial banks, joint-stock commercial banks, joint-venture banks, banks with 100% foreign capital, foreign banks’ branches, and financial companies. These credit institutions must obtain the State Bank’s written consent before they can provide such service.
Clients of the factoring service include Vietnamese and foreign economic organizations that supply goods and collect amounts from the goods purchase and sale as agreed upon in the goods purchase/sale contracts.