Credit information systems benefit borrowers as well, allowing good borrowers to establish a reputable credit, history which enable them to access credit more easily. The Legal Rights Index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. Sound collateral law will enable business to use their assets, especially movable property, as security to generate capital while having strong creditor’s rights has been associated with higher ratios, of private sector credit to GPP.
Some reform outcomes
After Vietnam's new Civil Code was enacted in 200, a decree further clarified the provisions governing secured transactions. Since the inclusion of the new provisions, the number of registrations increased from 43,000 (2005) to 120,000 (end of 2008).
In 2008, when Zambia established a private credit bureau, its database initially covered about 25,000 borrowers. Thanks to a strong communication campaign and a central bank directive, coverage has grown 10-fold in the past 2 years, exceeding 200,000 by the beginning of 2010.
Case Study Assumptions
* Is a Private Limited Liability Company
* Has its Headquarters and only base of operations in the largest business city
* Obtains a loan from a local bank (the Creditor) for an amount up to 10 times income (GNI) per capita
* Both creditor and debtor are 100% domestically owned
Vietnam is ranked 15 overall for Getting Credit.
Ranking of Vietnam in Getting Credit - Compared to good practice and selected economies
Historical data: Getting Credit in Vietnam
3. Getting Credit sub indicators in Vietnam over the past 4 years
4. Details on Getting Credit in Vietnam
The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in Vietnam.
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