Trade Finance in the Mekong Region

December 13, 2023

A study of Cambodia, the Lao People’s Democratic Republic and Viet Nam

Improving access to affordable trade finance could increase imports and exports by up to 9 percent in Viet Nam, Cambodia, and Lao PDR, according to a new report by International Finance Corporation (IFC) and the World Trade Organization (WTO). This represents an annual increase in merchandise trade of over $58 billion in the three countries combined.

The study, a second in a series of regional trade finance surveys, analyzes the regional trade finance ecosystem and provides insights into how importers and exporters can increase international trade with improved support from financial institutions. According to the report, increasing coverage is more important than reducing the cost of trade finance.

IFC and WTO surveyed banks with local presence in the three countries, as well as hundreds of traders in Viet Nam. The analysis considers the combined impact of expanding coverage by bank-intermediated finance by 20 percentage points and reducing the cost of financing to international benchmarks.