Removing institutional bottlenecks, creating new momentum for the consumer finance market

After years of rapid development, Vietnam's consumer finance market is entering a phase that demands robust transformation. While the primary goal previously was to expand market size, the current requirement is to develop in a safer, more transparent, and more sustainable manner, built upon a foundation of modern risk management, digital technology application, and a practical legal framework.

In this context, the meeting of the Board of Management of the Consumer Finance Club was not only an occasion to evaluate the Club's activities but also served as a forum for businesses, experts, regulatory representatives, and VNBA to jointly assess core market issues, exchange solutions to overcome difficulties, and unify recommendations to further perfect mechanisms and policies for the consumer finance sector.

Attendees included Dr. Dao Minh Tu, Vice Chairman cum Secretary General of the Vietnam Banks Association; Ms. Pham Thi Thanh Tung, Deputy Director of the Credit Department (State Bank of Vietnam - SBV); Mr. Mai Khanh Dung, Deputy Director of the Agency of Credit Institutions Supervision (SBV); Mr. Nguyen Dinh Duc, Chairman of the Consumer Finance Club and Deputy General Director of HD SAISON; Mr. Nguyen Quang Hung, Head of the Club's Permanent Department and Legal Director of FE CREDIT; along with representatives from member organizations and departments under the VNBA Permanent Agency.

From market realities to the need for the Club's operational innovation

In his opening remarks, Mr. Nguyen Dinh Duc stated that the consumer finance market is currently facing numerous challenges amid increasing pressure to control credit quality, resolve bad debts, prevent fraud, and meet digital transformation demands. Concurrently, there are new requirements for corporate governance and regulatory compliance in a constantly changing operating environment.

According to Mr. Nguyen Dinh Duc, these very changes require the Consumer Finance Club to more vigorously promote its role as a bridge between businesses and regulatory agencies, while simultaneously serving as a professional forum for members to share experiences, exchange governance solutions, and promptly reflect on practical difficulties.

Drawing from members' feedback, the Club will synthesize, study, and propose that VNBA report to the State Bank as well as competent authorities to resolve bottlenecks in mechanisms and policies, thereby creating favorable conditions for the healthy development of the market.

The Club Chairman also frankly acknowledged that the Club's recent activities have not fully realized its role in connecting members. Therefore, the Board of Management will develop an action plan for the 2026–2028 period aimed at being more substantive, enhancing professional exchanges, fostering cohesion among members, and coordinating more closely with regulatory agencies in the policy-making process.

Perfecting institutions – The "key" to unlocking growth potential

While the opening of the meeting focused on reviewing the overall market landscape, subsequent discussions centered on the issue of greatest concern to many businesses: perfecting the legal framework.

Representing the Club's Permanent Board, Mr. Nguyen Quang Hung noted that many current regulations have helped establish a foundation for the operations of finance companies; however, the practical development of the market is imposing new requirements that need to be studied and updated.

Based on a synthesis of members' opinions, the Club recommends that the State Bank continue to review and refine legal regulations to create more favorable conditions for consumer finance operations while ensuring systemic safety.

The recommendations focus on adding finance companies to the entities subject to small-value lending regulations under the Law on Credit Institutions; amending Circular No. 43/2016/TT-NHNN to raise the consumer lending limit from VND 100 million to VND 400 million and expand loan purposes; adjusting regulations on service introduction points, direct disbursement limits, and internal control systems; as well as considering objective factors when handling violations related to reporting obligations.

Going beyond specific regulations, many businesses also argued for a more comprehensive approach to the consumer finance sector to create a level playing field with other financial service provision models, thereby clearly affirming the role of finance companies within the national financial system.

Data and digital transformation will determine competitiveness

A common theme shared by many delegates was the increasingly important role of data and technology in consumer finance operations.

According to businesses, although the public's demand for loans remains vast, the efficiency of underwriting and risk management can only be improved when credit institutions are allowed to more effectively exploit the National Population Database, expand credit data sharing, and accelerate the digitalization of the entire credit granting process.

Members also proposed researching and building a shared database of consulting staff to minimize fraud, enhance transparency, and help protect customer rights.

In parallel, many opinions suggested that perfecting mechanisms to support debt recovery in accordance with legal provisions is also a crucial factor in safeguarding the legitimate rights and interests of lenders, thereby contributing to sustainable market development.

Businesses affirmed their commitment to continuing investments in technology, upgrading underwriting and risk management capabilities, and diversifying products to expand citizens' access to formal credit.

Market room for growth remains substantial

From a market research perspective, Mr. Le Xuan Dong, Managing Director of Market Research and Consulting at FiinGroup Vietnam Joint Stock Company, observed that consumer finance companies are currently under mounting competitive pressure—not only from commercial banks expanding into the mass consumer segment but also from alternative financial models, pawnshops, and secured lending institutions.

However, he noted that the market's development potential remains highly significant, as the ratio of consumer credit to GDP in Vietnam is currently much lower than that of many regional countries.

To capitalize on this potential, businesses must continue to diversify products, expand markets, build partner ecosystems, accelerate digital transformation, and increase the application of data in governance to simultaneously enhance the customer experience and better control risks.

He also emphasized the role of communication and financial education in helping the public correctly understand consumer finance, thereby changing social perceptions, affirming the role of formal credit in meeting the capital needs of citizens, and contributing to the containment of black-market credit.

Accompanying businesses in perfecting policies

Speaking at the meeting, representatives of the State Bank stated that the operations of consumer finance companies are always closely monitored by regulatory agencies, and the legal framework has been reviewed and perfected multiple times recently to facilitate businesses in expanding operations and diversifying products.

Regarding the Club's recommendations, the State Bank affirmed it will continue to study and absorb them based on a comprehensive assessment of practical impacts, while requesting that finance companies continue to provide additional data, figures, and practical evidence to support the policy-making and refinement process.

From a management and supervision perspective, State Bank representatives also noted that one of the critical tasks at present is to gradually consolidate public trust in the consumer finance sector. This requires businesses not only to improve the quality of products and services but also to step up communication efforts so that customers clearly understand their rights and obligations when accessing formal credit.

Promoting VNBA's role in policy connection

In his concluding remarks, Dr. Dao Minh Tu highly appreciated the Consumer Finance Club for organizing the meeting at a time when the market is in need of synchronous solutions to resolve difficulties and create new developmental momentum.

According to Dr. Dao Minh Tu, finance companies must proactively enhance governance capacity, strengthen risk management, adapt to market changes, and foster alliances to form a unified voice in both operations and policy recommendations.

He proposed that the Club continue to promote its role as a focal point in researching, critiquing, and contributing to the perfection of the legal framework; enhance the sharing of information and governance experiences among members; and simultaneously step up communication to raise societal awareness of the role of consumer finance in expanding access to capital and preventing black-market credit.

According to the VNBA Vice Chairman and Secretary General, the deployment of the National Population Database, citizen identification cards, VNeID, and the national credit information system (CIC) will create a vital foundation to help finance companies improve underwriting quality, minimize fraud, and strengthen risk management.

On this basis, VNBA recommends that the State Bank continue to pay attention to and accelerate the process of researching, reviewing, and amending relevant regulations to build a legal corridor suited to the market's development requirements in the new period.

Supplementing data resources for market development

A highlight of the meeting was the Admission Ceremony of FiinGroup Vietnam Joint Stock Company as an official member of the Consumer Finance Club.

The participation of FiinGroup—a business operating under the DataTech model with strengths in data, analytics, credit rating, and technology—is expected to supplement a crucial resource for the Club in the context where digital transformation and data utilization are becoming inevitable trends in the consumer finance sector.

According to Mr. Nguyen Dinh Duc, expanding the participation of organizations with strengths in data, technology, and market research will contribute to improving risk management capacity, promoting digital transformation, and helping member businesses better adapt to new market requirements.

Representing FiinGroup, Mr. Le Xuan Dong stated that the company will actively share data, information, and in-depth research to support the activities of Club members, while concurrently accompanying VNBA in promoting the transparent, healthy, and sustainable development of the consumer finance sector.

Closing the meeting, the delegates collectively agreed that perfecting the legal framework, accelerating digital transformation, effectively exploiting data, and enhancing coordination among regulatory agencies, VNBA, and the business community will serve as a critical foundation for the consumer finance market to develop safely and sustainably, expand formal credit access for citizens, and positively contribute to the nation's comprehensive financial inclusion goals.

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