Raising limits, simplifying procedures
Circular No. 29/2026/TT-NHNN issued by the State Bank of Viet Nam—which amends and supplements certain articles of Circular No.39/2016 regarding the lending activities of credit institutions—will take effect on August 15.
Under the new regulations, the limit for small-value loans has been raised from 100 million VND to 200 million VND for people’s credit funds and to 400 million VND for other credit institutions. For these loans, banks and finance companies may disburse funds without requiring customers to provide documentation or data proving financial capacity or a feasible plan for capital usage, as is required for standard loans.
According to the State Bank of Viet Nam, the previous 100 million VND limit no longer aligns with current price levels, living costs, and customers’ actual capital needs. This adjustment aims to meet borrowing demands while facilitating the expansion of lending via electronic means, in line with the banking sector’s digital transformation trends.
According to Le Hoang Tung, Deputy CEO of Vietcombank, raising the limit for small-value loans from 100 million VND to 400 million VND aligns better with current income levels and credit demand; it simplifies procedures and expands access to capital for individual customers and small business households.
The policy also enables credit institutions to boost online lending and accelerate the digital transformation of credit operations, in line with the direction set by the Government and the State Bank of Viet Nam. As banks shift their service processes from traditional channels to digital environments, this move can enhance application processing capacity and shorten the time it takes for customers to access capital.
From an expert perspective, Nguyen Quang Huy, Head of the Faculty of Finance and Banking at Nguyen Trai University, believed that Circular No.29—which raises the small-value loan limit to a maximum of 400 million VND—meets actual capital needs. It facilitates easier access to formal credit for individuals, business households, and micro-enterprises, thereby promoting financial inclusion and modernising risk management within the banking system.
Modern risk management
Nearly a decade after the previous regulations were issued, the scale of the economy, price levels, and the public's capital needs have changed significantly. Many loans for purposes such as supplementing working capital, investing in machinery or production equipment, home repairs, or covering education and healthcare costs now fall within the 200–400 million VND range.
Adjusting the limit therefore better reflects reality, allowing more customers to benefit from simplified lending processes and reduced time for application preparation and approval, ultimately enabling faster access to bank capital.
The new regulation is also expected to help narrow the credit gap in the market. As legitimate capital needs are more easily met through the banking system, individuals can reduce their reliance on high-interest, high-risk informal credit channels.
However, the simplification of procedures must go hand in hand with enhanced risk management. Nguyen Quang Huy believed that the new regulations incentivise credit institutions to streamline and digitize their lending processes while maintaining system safety.
Reducing documentation requirements can lower transaction costs and shorten processing and disbursement times. Yet, simplifying procedures does not equate to simplifying risk management; banks need to shift from an appraisal model based primarily on paper documentation to one based on data and customer cash flows.
“In addition to collateral or proof of income, banks can leverage legitimate data regarding account transactions, income, and recurring payments—such as utilities, telecommunications, internet, insurance, and tuition—to more comprehensively assess a borrower’s financial standing and repayment capacity,” emphasised Nguyen Quang Huy.
Furthermore, credit institutions need to establish early-warning systems for risks throughout the loan lifecycle. Upon detecting signs of declining cash flow or a risk of delayed repayment, banks should proactively engage with customers to offer advice on cash flow management, provide payment reminders, or assist in formulating suitable repayment plans. This collaborative approach not only helps curb bad debt but also contributes to safeguarding the customer's credit history.
