Hanoi (VNA) – Access to finance remains a major bottleneck for small- and medium-sized enterprises (SMEs) in Vietnam, but a gradual shift by banks toward cash-flow-based lending and more flexible credit models is expected to help “unlock” capital flows for this critical sector.

Despite the Government’s push to strengthen the private sector, Vietnamese SMEs continue to face significant hurdles in accessing credit. According to the Vietnam Private Economic Report 2025 released by the Vietnam Chamber of Commerce and Industry (VCCI), 75.5% of businesses said they are unable to secure loans without collateral.

Beyond collateral requirements, borrowing conditions and capital costs remain misaligned with the demands of private firms. More than 56% of respondents said interest rates and lending conditions are less favourable than those offered to state-owned enterprises, while 46.1% reported being subject to disadvantageous terms imposed by credit institutions. Administrative procedures also remain burdensome, with 45% of firms describing them as cumbersome, alongside the persistence of informal costs.

These challenges highlight not only financial barriers but also institutional constraints that limit SMEs’ access to credit. The Vietnam Association of Small and Medium Enterprises attributes these difficulties to weak credit histories, insufficient collateral, and complex loan documentation, underscoring the need for a more innovative lending approach, particularly as the SME sector plays an increasingly important role in economic growth.

Prof. Nguyen Trong Hoai from the University of Economics Ho Chi Minh City (UEH) suggested that Vietnam should study open finance models built on digital data adopted in several countries to improve credit access for SMEs lacking collateral.

Meanwhile, Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (HUBA), emphasised the need to develop capital markets, enabling large enterprises to diversify funding sources and free up bank credit for smaller firms.

Encouragingly, banks are beginning to adopt more flexible lending practices. In the plastics industry, which generates around 35 billion USD in revenue and grew by about 10% in 2025, most firms are SMEs with substantial working capital needs but limited financial capacity.

According to Hoang Trung Hieu from VPBank, the bank is shifting from collateral-based lending to a more comprehensive assessment of business plans, cash flows, and operational capacity. Tailored credit packages now allow loans backed by inventory, purchase orders, export contracts, or even unsecured lending based on viable business plans.

“Understanding the industry and the business is key to providing suitable financial solutions,” he said. In the first quarter of 2026, the Vietnam Prosperity Joint-Stock Commercial Bank (VPBank)’s outstanding loans exceeded 1 quadrillion VND (37.9 billion USD), up 10.2% from late 2025, with SME lending rising 8.4%.

Similarly, Southeast Asia Commercial Joint Stock Bank (SeABank) has introduced dedicated loan packages for micro-enterprises and newly formalised household businesses, which often struggle due to their short operating history. Firms with as little as three months of operation can now be considered for credit. Loan tenors extend up to 36 months for working capital, 120 months for equipment investment, and up to 300 months for property purchases serving business activities.

Major state-owned lenders are also expanding their role beyond financing. Vu Thi Hong Nhung from the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) said the bank is increasingly offering financial advisory services and cash flow management support. By integrating into supply chains, banks can better monitor business performance and use real transaction data as a basis for lending decisions, rather than relying solely on collateral.

In agriculture, the Vietnam Bank for Agriculture and Rural Development (Agribank) is likewise transitioning toward cash-flow and production-based lending models./.