Q&A Highlights from the Seminar “Empowering Supply Chain Finance: Leveraging Trade Credit Insurance”

Recent market fluctuations following the U.S. tariff announcement have underscored the risks threatening the growth of Vietnam’s exports. The need to diversify export markets is now more urgent than ever, alongside the imperative to promote supply chain finance through trade credit insurance and the application of data and technology to expand markets, protect revenues, and enhance access to financing for Vietnamese exporters.

Recent market fluctuations following the U.S. tariff announcement have underscored the risks threatening the growth of Vietnam’s exports. The need to diversify export markets is now more urgent than ever, alongside the imperative to promote supply chain finance through trade credit insurance and the application of data and technology to expand markets, protect revenues, and enhance access to financing for Vietnamese exporters. 

Addressing the concerns of Vietnamese enterprises around supply chain finance, experts from FiinGroup, IFC, Q&X Hong Kong, and Atradius shared valuable perspectives, summarized as follows: 

1. How should businesses effectively leverage trade credit insurance in practice? Beyond optimizing cash flow, are there risks or challenges they should be aware of? 

Ms. Vu Thi Duc Hanh – Country Director, Atradius Vietnam: 

Trade credit insurance protects receivables from deferred sales by compensating sellers when buyers fail to pay due to insolvency, bankruptcy, political risks, or other insured events. This solution helps safeguard cash flow, supports market expansion, provides intelligent insights into markets and business partners, and enhances access to credit from banks. 

Businesses should consider using trade credit insurance if they: 

• Offer sales on deferred payment terms 

• Aim to grow revenue and enter new markets 

• Seek to manage credit risks and strengthen financial governance 

For detailed advice and quotations, companies may contact credit insurers such as Atradius, Tokio Marine Insurance, or Bao Viet Insurance. 

From my perspective, there are no substantial risks that businesses need to be overly concerned about when using trade credit insurance. In fact, it supports companies in improving internal credit management processes. In a volatile economic environment and highly sensitive supply chains, credit insurance is a financially sound and strategic tool to protect export revenues. 

2. What are the most common types of trade credit insurance products? 

Mr. Wang Hui – Trade Credit Insurance Specialist, Q&X Insurance Broker (HK) Ltd: 

The most common types of trade credit insurance include: 

• Whole-turnover short-term insurance: Covers a seller’s portfolio of buyers 

• Selected buyer insurance: Covers a predetermined list of buyers 

• Single buyer insurance: Covers one buyer for one or more sellers 

• Bank/factor policies: Support trade finance provided by banks or factoring companies 

• Distributor finance insurance: Covers risks related to distributor financing 

• Trade finance credit insurance: Protects lenders from buyer default on trade loans 

• Advance payment protection: Covers advance payments made by the buyer 

3. How do banks and insurers work together in the transaction chain? How does credit insurance protect the seller while the bank acts as an intermediary? 

Mr. Jinchang Lai – Director & Head of Financial Infrastructure, Asia-Pacific, International Finance Corporation (IFC), World Bank Group: 

Credit insurance helps reduce risk for lenders in supply chain finance (SCF) transactions by protecting them against buyer default. As a result, financial institutions can offer financing under more favorable terms, making it easier for SMEs to access working capital. For this reason, credit insurance is widely used by banks, trade finance funds, SCF platforms, and factoring companies across various financing structures. 

For businesses, insured receivables become a reliable form of collateral, increasing the ability to raise capital and expand financing capacity. 

4. What should Vietnamese exporters do when facing non-payment issues disguised as quality disputes? 

Many Vietnamese exporters have experienced payment refusals on the grounds of “product quality issues,” when in reality, the buyer is facing financial difficulties and deliberately defaults. Such cases are often not covered by trade credit insurance and lead to lengthy disputes and significant losses. 

Mr. Nguyen Huu Hieu – CEO, FiinGroup: 

These situations often stem from buyers with weak financial health or poor creditworthiness. To mitigate these risks, we recommend that exporters: 

• Prioritize the use of technology and robust risk management 

• Actively collect and analyze partner data 

• Assess and continuously monitor the financial health of trading partners 

• Always verify business data before signing contracts—ideally through third-party validation 

Waiting until disputes arise to assess a customer’s financials exposes businesses to far greater risks. Proactive assessment is essential. 

🔗 Learn more about the event HERE

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