This paper examines interfirm relationships and informal credit in Vietnam, a country with a poorly developed legal system and limited access to formal financial markets. The authors use data from a survey of 259 non-state firms to analyze the factors influencing trade credit, including customer search costs and information about trading partners. They find that bilateral and community sanctions play a significant role in facilitating interfirm credit, with higher search costs and better information leading to more credit being granted. The study also reveals that informal mechanisms can lead to inefficiencies, such as exclusion from new trading partners, which can hinder firm growth. The results suggest that ongoing relationships and informal sanctions are crucial in Vietnam's economy, where formal mechanisms are limited. The paper concludes by comparing these findings with those from advanced economies, highlighting the unique challenges and dynamics of interfirm credit in Vietnam.This paper examines interfirm relationships and informal credit in Vietnam, a country with a poorly developed legal system and limited access to formal financial markets. The authors use data from a survey of 259 non-state firms to analyze the factors influencing trade credit, including customer search costs and information about trading partners. They find that bilateral and community sanctions play a significant role in facilitating interfirm credit, with higher search costs and better information leading to more credit being granted. The study also reveals that informal mechanisms can lead to inefficiencies, such as exclusion from new trading partners, which can hinder firm growth. The results suggest that ongoing relationships and informal sanctions are crucial in Vietnam's economy, where formal mechanisms are limited. The paper concludes by comparing these findings with those from advanced economies, highlighting the unique challenges and dynamics of interfirm credit in Vietnam.