IDS’s Chairman Dr. Tran Van informed that the National Comprehensive Financial Strategy until 2025, with a Vision to 2030 (NCFS) was approved by the Prime Minister in January 2020. It defines comprehensive finance as the ability of all citizens and businesses to access and use financial products and services conveniently.
This strategy emphasizes the inclusion of poor people, low-income earners, vulnerable groups, small and medium-sized enterprises, and micro-enterprises. Initial research by IDS shows that Vietnam currently has nearly 6 million micro-enterprises and household businesses, 30 percent of which rely on informal credit. The low loan success rate for businesses is attributed to the fact that 80 percent have no credit history, 60 percent do not meet collateral requirements, and 70 percent lack a sensible business plan.
General Director Nguyen Thanh Hien of Finviet (owner of Eco e-wallet) commented that the capital needs of micro and small enterprises in Vietnam are extremely high currently. However, access to capital is difficult because credit institutions often apply strict appraisal procedures, while regulations are quite complex, and these institutions cannot disregard risks to lower lending standards.
International best practices in establishing dedicated capital supply channels for vulnerable groups are through close collaboration between credit institutions and Fintech companies. The former excels in rigorous operational procedures, while the latter possesses technological expertise and diverse data sources to facilitate rapid, efficient, and secure credit evaluation and decision-making.
Sharing the same view, Dr Nguyen Duc Kien, former Head of the Prime Minister's Economic Advisory Group, acknowledged that the ability to access capital for small and micro-enterprises as well as household businesses has been increasingly lower.
Meanwhile, Assoc Prof Dr To Ngoc Hung, President of Hoa Binh University, believed that banks cannot be forced to lend small amounts of a few million dong because the cost of processing applications is higher than the loan amount. Therefore, microfinance institutions should take on this task.
Prof Dr Tran Ngoc Tho, a member of the National Advisory Council for Monetary Policies, cited the story of an acquaintance in Ben Tre Province who cultivates two hectares of land and needs VND15 million (US$590) to cover production costs. While banks cannot lend this amount, social networks are constantly offering him attractive loans.
"Many vulnerable people with low incomes often have little financial knowledge and no cash flow planning, and they need guidance to improve their understanding," shared Prof Dr Tran Ngoc Tho.
Dr. Tran Van said that Fintech businesses like Momo, Zalopay, Finviet have long existed in Vietnam with tens of millions of clients. They have significantly contributed to implementing the NCFS by the Government via providing mobile payment services, strongly developing digital banking as well as financial products and services for people in rural, remote, and isolated areas.
Dr Truong Van Phuoc, former Acting President of the National Financial Supervisory Commission, introduced the concept of ‘fincare’ – or financial care, saying that the State’s fincare to its citizens is of extreme importance to ensure equality. This means more boosts for Fintech development.
IDS’s Vice Chairman Duong Quoc Anh proposed that since Vietnam now has about 250 Fintech enterprises working individually, it is wiser to gather them under an association, aiming at providing more formal financial training to the public and contributing their voice to building a better legal corridor for finance matters.
Dr Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy, stressed that in addition to the legal framework for Fintech, there is an urgent need for a law to protect consumers in the financial field. The reason is when facing financial institutions, not only low-income earners or micro and small enterprises, but customers in general are vulnerable and need to be protected.
Nevertheless, until now, Fintech businesses are still operating under the "pilot license" model with many limitations. In order for these businesses to continue to develop a variety of basic financial products and services, they need proper attention and support in terms of institutions.
Assoc Prof Dr Dang Ngoc Duc from Dai Nam University also acknowledged that it is necessary to make strong changes to Fintech policies because this type is not simply payment or financial services, but the future of the financial industry to help all people easily access formal credit quickly, conveniently and at low cost. This will contribute significantly to the fight against "black credit".
Despite being recognized as one of the countries with the highest access to high technology in the world, Vietnam's Fintech sector is currently primarily focused on payment services. The next steps following scoring customers involve addressing critical questions such as determining loan eligibility, assessing risk potential, and implementing effective risk management strategies.
According to Assoc Prof Dr Dang Ngoc Duc, building a comprehensive data set for loan applications is crucial to achieve these goals as it will enable smarter devices, shorten loan processing times, and enhance risk management capabilities.
Deputy Chairwoman Pham Thuy Chinh of the National Assembly's Finance and Budget Committee emphasized the need for further research and pilot policy proposals to ensure that people have access to financial services at reasonable costs. She recognized the potential of Fintech companies to support traditional credit institutions in expanding "white credit" coverage to all segments of the economy, particularly vulnerable groups.
Dr Nguyen Thi Hoa, Head of the Institute of Banking Strategy, highlighted two challenging targets of the NCFS, namely the ratio of bank branches per 1,000 people and service points in communes. She called for the active participation of the entire political system, citizens, and businesses to address these challenges. From a regulatory standpoint, efforts are underway to refine the legal framework and create a more conducive environment for both supply and demand.
Permanent Deputy Editor-in-Chief of SGGP Newspaper Nguyen Thanh Loi acknowledged the growing network of credit institutions in Vietnam and the widespread availability of financial services across the country. However, he pointed out challenges in the implementation of the NCFS. While new financial products and services based on innovation and digital technology applications are emerging, they also bring associated risks, necessitating rapid refinement of the legal framework. Moreover, access to formal financial services remains a challenge for many, particularly poor people, low-income earners, and those living in rural and remote areas.
Vice Chairman of the Board of Directors and Co-founder of the MoMo e-wallet platform Nguyen Ba Diep emphasized the common challenges faced by all financial and credit service providers: maximizing successful credit approval rates and minimizing bad debt ratios. Technology presents a solution to both these challenges via evaluating customer creditworthiness based on spending behavior, usage frequency, and a history of timely bill and loan payments. This data-driven approach enables tailored loan packages for each customer.
