An international symposium encouraged Vietnamese banks to provide loansusing intellectual property (IP) assets as collateral to small- andmedium-sized enterprises (SMEs).
This strategy aims to improvethe sector's access to credit, and boost innovation and growth. It wasdiscussed at an international symposium on intellectual propertyfinancing held in Hanoi on May 4 by the International FinanceCorporation, the private sector lending arm of the World Bank Group.
Accordingto Professor Xuan-Thao Nguyen, Gerald L Bepko endowed chair in law andan IFC secured transactions specialist, this form of lending wasn't newin the world. It was developed more than a hundred years ago in the USand is growing fast in China, Thailand and Malaysia.
Nguyen saidIP financing reached 34-50 billion USD in 2014 in China and was expectedto grow faster this year. Thailand and Malaysia also createdregulations on IP financing.
"SMEs are the ones that mainlycreate disruptive technology," she said. "They have new ideas and needbanks to provide financing to help them participate in theknowledge-based economy."
According to a report by the VietnamChamber of Commerce and Industry, SMEs accounted for more than 97percent of Vietnam's businesses, but only 30 per cent of them couldaccess credit from banks. The other 70 percent needed to use their owncapital or borrow from other sources at high costs.
Tran Thi HongHanh, General Secretary of the Vietnam Banks' Association, said IPfinancing would play an important role in banks' lending activities, andhad untapped potential for development in Vietnam.
Hanh said theslowdown in the real estate market, accompanied by legal problems indealing with property assets as collateral, caused difficulties forbanks when choosing such collateral for loans.
"In Vietnam, thereis not much IP financing at commercial banks now, but the developmentof this form would help SMEs and thereby support national economicgrowth," Hanh said.
Vietnamese management authorities had showninterest in the trend and would build legal framework to facilitate itsdevelopment, she said.
Nguyen said IP financing could helpVietnamese banks survive and compete with others. They could learn fromthe example set by the international community, which has moreexperience with the trend than Vietnam does.
"Banks and lendersmust understand IP law or hire experts to help them understand IP law,"Nguyen said. "They also must conduct careful due diligence to learnabout clients' businesses to make valuations."
She said Vietnam'slaw-making authority should encourage IP financing, and improveregulations on foreclosure of assets – including IP assets.
"Ifwe don't have a system that clearly allows banks and lenders to quicklyforeclose collaterals, including IP assets, and allow them to sell thoseassets, banks will not be willing to lend," she said.
Accordingto Charles Schmal, a Woodard Emhardt Moriarty Mc Nett and Henry LLPpartner, most IP assets were valuable. He suggested new businesses thinkabout IP rights at an early stage, and use them to persuade banks togive them loans.-VNA
This strategy aims to improvethe sector's access to credit, and boost innovation and growth. It wasdiscussed at an international symposium on intellectual propertyfinancing held in Hanoi on May 4 by the International FinanceCorporation, the private sector lending arm of the World Bank Group.
Accordingto Professor Xuan-Thao Nguyen, Gerald L Bepko endowed chair in law andan IFC secured transactions specialist, this form of lending wasn't newin the world. It was developed more than a hundred years ago in the USand is growing fast in China, Thailand and Malaysia.
Nguyen saidIP financing reached 34-50 billion USD in 2014 in China and was expectedto grow faster this year. Thailand and Malaysia also createdregulations on IP financing.
"SMEs are the ones that mainlycreate disruptive technology," she said. "They have new ideas and needbanks to provide financing to help them participate in theknowledge-based economy."
According to a report by the VietnamChamber of Commerce and Industry, SMEs accounted for more than 97percent of Vietnam's businesses, but only 30 per cent of them couldaccess credit from banks. The other 70 percent needed to use their owncapital or borrow from other sources at high costs.
Tran Thi HongHanh, General Secretary of the Vietnam Banks' Association, said IPfinancing would play an important role in banks' lending activities, andhad untapped potential for development in Vietnam.
Hanh said theslowdown in the real estate market, accompanied by legal problems indealing with property assets as collateral, caused difficulties forbanks when choosing such collateral for loans.
"In Vietnam, thereis not much IP financing at commercial banks now, but the developmentof this form would help SMEs and thereby support national economicgrowth," Hanh said.
Vietnamese management authorities had showninterest in the trend and would build legal framework to facilitate itsdevelopment, she said.
Nguyen said IP financing could helpVietnamese banks survive and compete with others. They could learn fromthe example set by the international community, which has moreexperience with the trend than Vietnam does.
"Banks and lendersmust understand IP law or hire experts to help them understand IP law,"Nguyen said. "They also must conduct careful due diligence to learnabout clients' businesses to make valuations."
She said Vietnam'slaw-making authority should encourage IP financing, and improveregulations on foreclosure of assets – including IP assets.
"Ifwe don't have a system that clearly allows banks and lenders to quicklyforeclose collaterals, including IP assets, and allow them to sell thoseassets, banks will not be willing to lend," she said.
Accordingto Charles Schmal, a Woodard Emhardt Moriarty Mc Nett and Henry LLPpartner, most IP assets were valuable. He suggested new businesses thinkabout IP rights at an early stage, and use them to persuade banks togive them loans.-VNA
