Expanding consumer lending promotes production and business activities of enterprises
Positive signal for the market
At the regular government meeting in February 2026, held on March 4th, the Prime Minister directed the State Bank of Vietnam to study extending the loan term for consumer loans from a maximum of 12 months to 24 months, and to consider a suitable grace period mechanism for certain loans.
The State Bank of Vietnam (SBV) is currently seeking feedback on a draft Circular amending Circular No. 39/2016/TTNHNN on lending activities of credit institutions. A notable point is the proposal to increase the loan limit for small loans from VND 100 million to VND 400 million, while removing the VND 100 million ceiling for loans conducted entirely online.
Experts believe that adjusting both loan size and loan term simultaneously could significantly alter people's access to credit. This is because, in reality, the demand for consumer credit remains high.
According to statistics from the State Bank of Vietnam's Regional Branch 2, as of the end of January 2026, outstanding consumer loans in Ho Chi Minh City and Dong Nai reached approximately VND 1.57 trillion, accounting for 26.9% of total outstanding credit, an increase of 14.6% compared to the same period in 2025.
From a market perspective, according to consumer finance companies, raising the consumer loan limit from 100 million VND to 400 million VND is a positive step in removing some legal bottlenecks for the operation of consumer finance companies, helping customers easily access legitimate sources of capital to serve their lives and legitimate needs.
Dr. Chau Dinh Linh, a lecturer at the Ho Chi Minh City University of Banking, believes that extending loan terms and raising the threshold for small loans reflects a shift in management thinking. According to Dr. Linh, policy is moving from "controlling consumer credit to avoid risks" to "opening up conditional space to stimulate consumer demand, support growth, and push back against informal credit."
“These adjustments could bring many benefits such as stimulating domestic consumption, curbing informal lending, expanding formal credit, promoting the digitalization of consumer credit, and creating new credit growth drivers for the banking system,” Mr. Linh commented. However, according to Mr. Linh, expanding consumer credit needs to be accompanied by appropriate risk control mechanisms. Besides the risk of slow but persistent increase in bad debt, the market may also face the risk of misuse of funds or disbursement speeds exceeding control capabilities. Therefore, easing lending conditions needs to be linked to increased application of data and artificial intelligence in credit scoring, eKYC, and cash flow monitoring.
Activate a new growth cycle
With the legal framework gradually becoming more flexible, experts predict that the consumer finance market will enter a strong recovery phase after a prolonged period of difficulty from 2023–2024.
According to Rong Viet Securities Company (VDSC), by the end of 2025, many consumer finance companies such as FE Credit, VietCredit, and EVNFinance had returned to a growth trajectory after restructuring their loan portfolios and strengthening risk control.
According to VDSC, extending the term of consumer loans could create new growth opportunities for retail banks and consumer finance companies. Longer loan terms reduce monthly repayment pressure, allowing customers to access larger loans and expand spending on higher-value consumer goods such as motorcycles, mobile phones, and electronics.
Furthermore, financial companies with extensive distribution networks and large customer bases are expected to benefit significantly if the new policies are implemented. Simultaneously, credit institutions that are increasingly applying technology and data in credit scoring will also have more room to develop installment loans linked to consumer goods – a segment considered to have a lower risk level compared to cash loans.
According to experts, in the current context, extending loan terms and increasing small loan limits can contribute to an increase in the average loan size, thereby expanding growth potential for consumer finance companies. At the same time, as domestic consumption increasingly becomes one of the key drivers of economic growth, expanding consumer credit in a rational manner not only helps people access capital more easily but also contributes to boosting domestic demand and supporting the activities of many economic sectors.
However, experts also advise that the expansion of consumer credit should be implemented cautiously, linked to appropriate monitoring and risk management mechanisms. This aims to ensure a balance between the goals of promoting credit growth and expanding consumption and the requirement to maintain the safety and stability of the financial and banking system.
