The banking sector in Vietnam is undergoing a paradigm shift in lending to Small and Medium Enterprises (SMEs). This step was taken in response to the chronic challenge of access to capital, which has long been trapped in a tight dependence on physical collateral assets or real estate guarantees.
The State Bank of Vietnam (SBV) Ho Chi Minh City Branch is now actively encouraging financial institutions to shift to assessment models based on business reputation and cash flow effectiveness. This transformation is crucial given that the share of loans to SMEs is currently stuck at around 19-20% of total national credit, largely due to the inability of young businesses to meet the requirements of the past three years' financial statements or rigid collateral standards.
As a strategic solution, supply chain finance models are being brought forward. Under this mechanism, banks lend based on supply contracts and the reputation of highly reputable upstream companies, so that SMEs are no longer burdened with the obligation to provide assets as an absolute condition for borrowing. This approach is considered capable of breaking the deadlock that has hindered innovation, especially in the high-tech agriculture sector and export industries.
At the regulatory level, the Vietnamese Ministry of Finance is drafting a revision of the SME support law, which is scheduled to be included in the National Assembly's agenda in October 2026. The draft includes a pilot mechanism for data-based lending, which integrates information from tax authorities, customs, and social security to validate a company's financial health in real-time. This transparent data infrastructure is expected to become the foundation for banks to make more precise credit decisions.
In addition to policy innovation, the digitalization of public services in the banking sector continues to be accelerated to cut red tape for entrepreneurs. With the integration of technology and changes in lending mechanisms that are more flexible, it is hoped that banking capital can flow more evenly, thereby driving business productivity growth at both local and national scales in a more sustainable manner.
