The International Finance Corporation (IFC), a member of the World Bank Group, has proposed land use rights certificate under Vietnamese Land Law, commonly known as red book for its red cover, be used as collateral for loans provided by IFC and other international financial institutions.

Deputy Prime Minister Vuong Dinh Hue and IFC's CEO Stephanie von Friedeburg. Source: VGP.

The IFC also expected to cooperate with Vietnam in developing the capital market by introducing new products to the stock market, as well as supporting the corporate bond market, Stephanie von Friedeburg, IFC’s CEO, told Deputy Prime Minister Vuong Dinh Hue on November 7. 

However, Hue said Vietnamese law does not allow multilateral international financial institutions such as the IFC to use red book for collateral loans.

Hue instructed the Ministry of Natural Resources and Environment, the State Bank of Vietnam, and the Ministry of Justice to review the IFC’s proposal and later report to Prime Minister Nguyen Xuan Phuc for consideration.

Hue, meanwhile, welcomed the IFC’s support for the development of Vietnam’s capital market, especially when the Vietnamese government is striving to control public debt, enhancing repayment capability and developing infrastructure projects at the same time.

Hue asked the IFC to provide funds for enterprises and banks to speed up the construction of major infrastructure projects such as Long Thanh International Airport and the North-South expressway project, while encouraging the group to purchase stakes at large commercial banks.

Regarding the issue, Stephanie said the IFC would be willing to support these projects and actively participate in the process of restructuring Vietnam’s capital market.