The central objective of the session was to assess the current market situation, agree upon key courses of action, and prepare recommendations for the State Bank of Vietnam (SBV) to finalize the legal framework, aiming for a transparent and sustainable development of the consumer finance (CF) market.
Dr. Nguyen Quoc Hung, Vice Chairman and Secretary General of the VNBA.
In his directive speech, Dr. Nguyen Quoc Hung acknowledged the efforts of the CFC Steering Committee in maintaining activities and connecting member finance companies. He simultaneously emphasized crucial requirements and orientations for the Club and finance companies:
1. Demand for Specific Data Analysis and Transparency
Dr. Hung requested the CFC Steering Committee to clearly analyze the real market situation with specific data, avoiding generalizations, covering:
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Credit quality, outstanding loan structure, and NPLs (Non-Performing Loans).
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Debt recovery rates and operational funding sources.
He stressed: "Reports must contain specific data... to be aggregated and reported to the State Bank."
2. Guidance on Interest Rates and Funding Sources
Regarding capital sources and interest rates, Dr. Hung noted that companies must assess their ability to mobilize medium- to long-term capital to ensure a balance between cost of funds and lending interest rates, striving for sustainability.
"The government’s policy is to expand consumer credit, helping people easily access legal capital, but the interest rate level must be reasonable and transparent."
3. Standardizing Disbursement Mechanism and Loan Purpose
Dr. Nguyen Quoc Hung requested standardizing the concept of “disbursement via payment account” to replace “cash disbursement.”
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This is necessary to ensure transparency, traceability, and compliance with regulations on Anti-Money Laundering (AML).
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He also asserted: "Lending must have a clear, demonstrable purpose. It is unacceptable to grant loans without controlling the use of funds."
4. Warning on Risks and Requirement for Legal Compliance
Dr. Hung warned of risks associated with increasing the direct disbursement ratio (especially for unsecured loans), as this could lead to fraud or misuse of loan purposes. Most importantly, he required finance companies to strictly comply with legal regulations when establishing internal operational rules, avoiding the situation of "self-interpretation, self-instruction."
"The most important thing now is to protect your employees by doing things right according to regulations. If you do wrong, you can still be held accountable even 10-15 years later."
Related to the seizure of collateral assets, he advised companies to proceed with extreme caution and adhere strictly to legal procedures and grounds to avoid strong social backlash.
Mr. Nguyen Dinh Duc – Chairman of the CFC
On behalf of the Steering Committee, Mr. Nguyen Dinh Duc – Chairman of the CFC, reported on progress:
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Positive Outcome: The Club’s proposal to raise the consumer loan limit from 100 million VND to 400 million VND has been accepted by the SBV and included in the draft amendment of Circular 43, marking an initial positive result.
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Proposal to Adjust Lending Ratio: Currently, Circular 35/2024/TT-NHNN regulates the consumer/non-consumer lending ratio at 30%/70%, which restricts the operations of finance companies. The Club continues to propose the SBV adjust this ratio to 50%/50%, deeming it more aligned with operational reality.
Discussions also focused on clarifying the definition of “disbursement via payment account” to align with the strong growth of e-commerce and digital payments.
Five ket action directions
The meeting concluded with a consensus on five main action directions moving forward, demonstrating a commitment to safe and transparent CF market development:
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Finalize Market Situation Assessment Report: Focus on specific data regarding NPLs, interest rates, funding sources, and debt recovery efficiency.
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Standardize Disbursement Terminology: Standardize the term “disbursement via payment account,” eliminating the concept of “cash disbursement” in documents and recommendations.
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Propose Lending Ratio Adjustment: Prepare a proposal to adjust the consumer/non-consumer lending ratio from 70/30 to 50/50, substantiated by specific data and impact analysis.
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Develop a "Blacklist" Risk Data Project: Coordinate with the National Credit Information Centre (PCB) to build a risk data sharing project. PCB will serve as the legal intermediary, receiving, encoding, and allowing information querying when necessary, thereby enhancing risk management.
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Organize Policy Feedback Workshop: Finalize the minutes, synthesize recommendations, and prepare to organize a workshop between CLB members and the SBV to provide direct feedback on the draft amendment and supplementation of Circular 43.
Members also identified 3 high-risk fraud groups requiring management: colluding commercial partners, internal staff violations, and customers deliberately engaging in fraud or debt evasion. Data on these groups will be encoded and managed centrally through the PCB, ensuring compliance with legal regulations.
The CFC Steering Committee’s 2nd session concluded with high consensus, laying a solid foundation for the sustainable, transparent, and safe development of Vietnam’s consumer finance market—a crucial credit channel for expanding financial access for the Vietnamese population.
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