Vietnam banks shift SME lending toward cash-flow data

At a recent State Bank of Vietnam and SME association seminar, lenders acknowledged that collateral has been the default not because they prefer it, but because it is often the only defensible way to manage credit risk when information is fragmented. The industry is now trying to shift toward cash-flow and business-performance based underwriting, a model that rewards better disclosure and digital accounting rather than hard assets.

The push is already visible at major banks. Agribank says about 90% of its corporate customers are SMEs, accounting for roughly 60% of its corporate loan book, and it is rolling out a 70 trillion dong SME credit package over the next two years. Vietcombank said SME lending rose 13.5% in the first eight months of the year, faster than its overall 7.8% loan growth, and it has introduced four rate-cut programs for SMEs of 0.5% to 2% a year.

MB is furthest along in turning data into credit decisions. The bank said more than 4,000 companies used its SME scoring model in 2026, and over 3.5 trillion dong was disbursed without collateral, based entirely on revenue. About 85% of its SME borrowers now apply digitally, with some cases moving from request to disbursement in about three days. That speed is a competitive advantage in a market where smaller firms often need funding quickly and cannot wait for lengthy manual appraisals.

The broader sector message is that unsecured lending is becoming less of a policy slogan and more of a commercial necessity. As competition intensifies, banks that can underwrite SMEs through accounting software, tax records and transaction data should be able to grow faster with lower acquisition costs. Those that remain dependent on pledged assets risk losing clients with thin fixed-asset bases but healthy cash flow, especially firms tied into larger supply chains or global value chains.

Yet the bear case remains significant. Many SMEs still have thin equity cushions and opaque financial statements. Even audited accounts are often rechecked against tax data before banks will lend. That leaves unsecured credit constrained by the quality of national data infrastructure and by whether companies are willing to share more information. In practice, the market is still split between a small group of bankable, data-rich firms and a much larger pool that remains collateral-dependent.

The key institutional gap is a shared data backbone. Bankers said information on legal entities, authorized representatives and business activity remains scattered, while objective data from tax, social insurance, customs and payment systems is not fully linked or shared. Lenders want the National Credit Information Center, or CIC, to become a true hub for consolidated credit data, with borrowers explicitly consenting to data sharing. Until that happens, banks will continue to say they want to “free” credit from collateral even as collateral stays central to risk control.

For investors, the story points to a slow but meaningful shift in Vietnam’s banking model. Banks with better digital origination and access to alternative data could deepen SME relationships, lift fee income and improve loan growth without taking disproportionate balance-sheet risk. Those that cannot build that data advantage may be forced to compete mainly on price, a poor trade in a sector where margins are already under pressure.