A customer borrows at a bank in Hanoi. (Photo: vnbusiness.vn)
The proposal was made as the State Bank of Vietnam (SBV) hasrecently published draft amendments to the Circular 39/2016/TT-NHNN regulatinglending activities of credit institutions and foreign bank branches tocustomers. Accordingly, for small loans not exceeding 100 million VND,borrowers will not have to provide feasible capital use plans and relatedperson information to credit institutions.
The draft policy aims to simplify procedures for granting loans with smallvalue, which will contribute to creating more favourable conditions forcustomers to access bank credit for daily life and consumption demands tominimise illegal usury. Besides, it will help banks expand lending activities.
Banks suggested raising the value limit for small loans,especially credit cards and overdrafts, because borrowers often ask for suchsmall loans to meet consumer needs so it is difficult for them to have adequateand accurate reports to prove feasible capital use plans.
For loans with small value, it is not feasible to requireborrowers to provide reports on loan capital usage and prove that the loan isused for the correct purpose stated in the loan agreement, banks explained.
Besides, credit institutions propose that the circular issuesimpler regulations on documents and procedures to prove borrowers' financialcapacity, purpose of capital use and inspection of loan use for small valueloans.
Regarding the draft regulation, Mai Thị Trang, deputy director ofthe SBV’s Monetary Policy Department, said the law currently does not haveregulations on a small value. It is almost a new concept. The drafting committeehas decided to choose the 100 million VND mark as a small value after referringto a number of regulations on consumer loans of finance companies. UnderCircular 43/2016/TT-NHNN on consumer loans of finance companies, the cap forconsumption outstanding loans does not exceed 100 million VND.
In addition, the committee has also based on Circular06/2023/TT-NHNN that regulates outstanding loans for individual customers to servelife needs. Under the circular, outstanding loans of an individual borrower ata credit institution must not exceed 100 million VND.
At the same time, according to the latest statistical report ofthe General Statistics Office, Vietnam’s GDP per capita in 2023 is estimated toreach about 101.9 million VND.
Therefore, the mark of 100 million VND is the legal basis for thedrafting committee to research and propose that a small loan is worth 100million VND in the draft circular./.
VNA
