SBV Circular 29/2026: Small Loan Limit Raised to VND 400M Without Financial Proof

Overview

The State Bank of Vietnam (SBV) issued Circular 29/2026, effective August 15, raising the threshold for small-value loans that do not require financial proof from VND 100 million to VND 400 million for credit institutions and VND 200 million for people’s credit funds. The policy aims to simplify lending procedures, expand credit access for individuals and small businesses, and accelerate digital lending. Vietcombank (VCB), Vietnam’s largest listed bank by market cap, is a key beneficiary.

Key Facts

• Circular 29/2026 raises the small loan threshold from VND 100 million to VND 400 million for credit institutions and VND 200 million for people’s credit funds.
• The circular takes effect on August 15, 2026.
• Loans under the new threshold do not require customers to provide financial proof or a feasible use-of-funds plan.
• The policy is intended to simplify procedures, expand credit access, and promote digital lending.
• For overdue loans, credit institutions must collect principal before interest, reversing previous flexibility.
• The SBV stated the old VND 100 million cap was outdated due to rising living costs and loan demand.
• Vietcombank’s Deputy General Director Le Hoang Tung welcomed the move as appropriate for current income levels and credit needs.

What Happened

The State Bank of Vietnam published Circular 29/2026, amending Circular 39/2016 on lending activities of credit institutions. The key change raises the threshold for small-value loans that can be disbursed without requiring customers to provide financial documentation or a viable capital use plan. For credit institutions (banks and finance companies), the limit increases from VND 100 million to VND 400 million; for people’s credit funds, it rises to VND 200 million.

In an interview with Tuoi Tre newspaper, Vietcombank Deputy General Director Le Hoang Tung said the adjustment is positive for both banks and customers, aligning with current income levels and credit demand. He noted it simplifies procedures, expands capital access for individuals and small household businesses, and supports financial inclusion. The circular also mandates that for overdue loans, principal must be collected before interest, reversing the previous practice where parties could agree on the order.

Market Context

Vietcombank (VCB) closed at VND 63,000 on July 1, 2026, up 1.29% on volume of 4.2 million shares. The stock trades on HOSE and is the largest bank by market capitalization. The banking sector has been under pressure from rising non-performing loans and margin compression, but regulatory easing could support lending growth. The circular aligns with the government’s push for digital transformation and financial inclusion, potentially boosting loan volumes for retail-focused banks.

Strategic Significance

For Vietcombank, the higher threshold reduces administrative costs and processing time for small loans, enabling faster scaling of digital lending platforms. The policy supports the bank’s strategy to expand retail and SME lending, which typically carry higher margins. By removing documentation requirements for loans up to VND 400 million, VCB can capture a larger share of consumer and micro-business credit demand. The change also reduces operational risk by simplifying collection procedures for overdue loans. Long-term, this regulatory tailwind could improve VCB’s net interest margin and loan growth trajectory.

What to Watch

• Q3 2026 earnings release for VCB to gauge loan growth acceleration and NIM trends.
• SBV data on total credit growth in the personal and SME segments post-implementation.
• Competitor response: whether other banks adjust digital lending strategies to capture market share.
• Asset quality metrics: whether relaxed lending standards lead to higher NPL ratios over time.
• Further regulatory updates on digital banking and fintech partnerships.