In Vietnam, more than 93% of loans still require collateral backing - a ratio far exceeding the global average and neighboring countries like Malaysia or Thailand. This figure, cited by VnExpress from the 2025 Provincial Competitiveness Index (PCI) report by the Vietnam Chamber of Commerce and Industry (VCCI), is not a shocking discovery. It is an old diagnosis repeated, nearly verbatim, every few years.
What deserves attention is not the figure itself, but the fact that the solution to it - shifting banks from an asset-based lending model to one evaluating cash flow and actual business capacity - has been on the agenda for many years. According to VnExpress citing Dương Quốc Anh, former Vice Chair of the National Assembly's Economic Committee, this proposal was raised years ago but implementation remains difficult due to volatile markets and rising credit risks. In other words: Vietnam has diagnosed the disease, written the prescription, but has never actually taken the medicine.
Vietnam has diagnosed the disease, prescribed the medicine, but has never actually taken it.
A Recurring Diagnosis, Not a New Finding
This repetition leaves clear traces in the reporting history itself. Before VnExpress's July 3, 2026 report on a workshop titled Cash Flow Management and Unlocking Capital Sources for Businesses in New Context, VietNamNet had reflected nearly identically the same reality: enterprises struggling to access capital due to lack of collateral, and the banking sector being urged to shift to a model of lending based on cash flow. This is not mere coincidence between two newsrooms - it is evidence that the same policy recommendation has been repeated through multiple reporting cycles without producing any significant structural change in how Vietnamese commercial banks price risk.
This issue is also not confined within Vietnam's borders. The U.S. Chamber of Commerce, an organization representing American business interests operating in or trading with Vietnam, has also noted that enterprises struggle to access capital due to lack of collateral and the banking sector needs to shift toward a cash flow-based assessment model. When both a foreign business advocacy organization and a domestic agency identify the exact same problem in nearly the same language, it signals this is not the partisan opinion of one interest group, but a structural bottleneck recognized by multiple independent parties.
The 93.5% Figure and the Regional Gap
The detailed picture VnExpress presented shows the scope of the problem far exceeds a generic complaint. According to the 2025 PCI report by VCCI, more than 21% of Vietnamese enterprises view access to finance as their greatest difficulty - higher than the global average of 17.8% and the East Asia-Pacific regional average of 15.7%. Among these, 8.2% of enterprises cannot access credit at all or are afraid to apply due to concern over unfavorable borrowing terms, while about 18% can only borrow part of their actual capital needs.
About 75% of enterprises surveyed by VCCI confirm they cannot borrow without collateral. Even when they do borrow, the game remains unfair: 56.3% of enterprises report they must accept stricter credit terms and interest rates compared to large enterprises or state-owned enterprises, 46.1% have had loan terms changed to their disadvantage mid-agreement, and 44.5% must pay additional fees just to receive the disbursement. Some enterprises are required to pay off old loans under new conditions before being considered for new loans, only to have their applications suspended or credit limits cut - a loop that leaves enterprises both losing old collateral and without fresh capital to operate.
Nearly half of enterprises, specifically 45%, rate the loan application process as cumbersome. Hồ Anh Tuân, VCCI Vice Director for Central and Central Highlands regions, describes this as a vicious circle: complex procedures and information gaps between banks and enterprises create barriers that make capital access even harder.
Why Banks Still Cling to Land Books
There is a very practical reason why Vietnamese commercial banks do not easily abandon the collateral model: assessing cash flow and actual repayment capacity requires data systems, transparent transaction histories, and credit assessment capabilities far more complex than appraising a plot of land or a house. For most small and medium enterprises in Vietnam - where accounting books typically do not separate personal and business finances - banks simply lack reliable data to score credit based on cash flow.
This is precisely the point raised by Lê Thanh Quý Ngọc, Acting General Director of VietBank, when identifying customer understanding as a core priority. According to VnExpress, VietBank's representative believes that when an enterprise is transparent about its financial situation, has clear cash flow, and has verified business credibility over time, then extending credit without collateral will no longer be a major obstacle. But that prerequisite condition - transparent cash flow, clear transaction history - is exactly what most small enterprises in Vietnam lack, partly due to cash-based business habits and partly due to evading tax obligations through keeping murky books. VietBank recommends small and medium enterprises change their operations: use capital for intended purposes, choose loan terms matching cash flow cycles, separate personal and business finances, improve accounting systems, and increase bank transactions to create transparent history.
In other words, the burden of reform is being placed on the shoulders of small enterprises themselves - the actors least equipped to self-upgrade accounting systems or quickly make cash flows transparent. Banks wait for enterprises to become transparent before extending credit; enterprises need capital to invest in the systems that would make them transparent. That is the vicious circle that Hồ Anh Tuân pointed out, only this time viewed from the supply side rather than the demand side.
The Detour of Overseas Vietnamese and the House as Only Collateral
For overseas Vietnamese communities in the United States with business interests or family in Vietnam, this barrier is not abstract. Many Vietnamese Americans send money home not only for living expenses but also to finance the startup capital for a small grocery store, a small garment factory, a family-run restaurant - and when personal funds run dry, the next option is almost always to use the family home or land as collateral to borrow from domestic banks. With a 93.5% loan collateral requirement ratio, this model is nearly the only path, regardless of how strong a business's cash flow or how established its trading history.
The risk here is not just business failure - it is families losing homes. For Vietnamese communities in Little Saigon in Southern California, the San Jose area in Northern California, or Houston, where trans-Pacific family ties remain tight, the story of collateral in Vietnam typically becomes a story for an entire family on both sides of the ocean, not just the loan borrower. An unrecovered loan in Can Tho or Da Nang can carry financial consequences for a household living in Orange County.
Reform Will Come, But Not from Workshops
The July 3, 2026 workshop that VnExpress reported, with participation from VCCI representatives, former National Assembly officials, and commercial banks, reaffirmed something Vietnam's economic observers have long known: correct policy proposals do not automatically transform into operational change. VietBank publicly discussing cash flow-based unsecured lending is a positive signal at the individual bank level, but it is entirely different from a systemic shift across Vietnam's entire banking sector.
The actual reform - if it comes - will most likely not arrive from recurring workshops or policy recommendations, but from competitive pressure: when some private banks demonstrate that cash flow-based lending can be profitable and risk-manageable, other banks will be forced to follow to avoid losing market share in small and medium enterprises - the group comprising most of Vietnam's operating businesses. But as long as the national credit data system, transparent accounting habits among small enterprises, and banks' cautious risk appetite do not change simultaneously, collateral - land, houses, red books - will remain the only common language lender and borrower can understand. And until that changes, the story of enterprises lacking capital due to lacking assets will continue to be retold.