Proposal to increase consumer loan limit to 300 - 400 million VND to stimulate consumption

The old loan ceiling is outdated, no longer suitable for reality and is reducing the competitiveness of finance companies compared to commercial banks.

The Vietnam Banks Association (VNBA) recently sent a petition to the State Bank of Vietnam proposing to raise the consumer loan limit from the current maximum of VND100 million to VND300 - 400 million. This is because the old ceiling is outdated, no longer suitable for reality and is reducing the competitiveness of finance companies compared to commercial banks.

Not to mention, current regulations force financial companies to focus on small, short-term loans, making it difficult for them to create large-value or long-term loan packages to meet increasingly diverse needs. Dr. Nguyen Quoc Hung, Vice Chairman and General Secretary of VNBA, analyzed that the adjustment will help expand the scale of consumer debt, meet the capital needs of both people and financial companies, and at the same time stimulate consumption, contributing to economic growth. "In the context of GDP in 2025 expected to increase by over 8% and household income improving, consumer credit will certainly flourish," he emphasized.

A representative of Shinhan Finance Company said that the VND100 million ceiling has existed for too long while the macro economy has changed dramatically. In addition, the regulation requiring at least 70% of a finance company's outstanding loans to be in the consumer lending segment is also causing these units to have a narrow customer base and be less flexible than commercial banks. "If the limit is increased, we can reach the customer group in the intermediate segment between banks and finance companies, expanding the options for borrowers and promoting consumption," said a representative of Shinhan Finance.

According to financial companies, most consumer loans are unsecured, so credit risk depends on the management ability of each organization. In fact, high-value loans are usually only granted to customers with stable income or good credit history. Therefore, raising the ceiling does not mean a sharp increase in risk, because lending units still have to carefully assess the ability to repay the debt before disbursing.

Some businesses have also suggested that the State Bank should consider not only raising the limit but also removing the current debt and consumer lending ceilings. Instead, the management agency can control it through capital adequacy ratios and loan portfolio quality. This approach both encourages the development of the consumer lending market and maintains risk management discipline throughout the system.

Dr. Nguyen Quoc Hung also affirmed that unsecured consumer loans of up to VND300-400 million will help customers without collateral but with stable incomes access formal capital sources, instead of having to seek out informal lending channels that are potentially risky. At the same time, the responsibility for controlling bad debt will belong to each financial company through a credit assessment and monitoring system.

Source: https://nld.com.vn/de-xuat-nang-han-muc-vay-tieu-dung-len-300-400-trieu-dong-196250822210704416.htm