Promoting loans for the value chain

Value chain and supply chain lending is a form of financing provided by commercial banks to businesses or individuals participating in a production chain, from raw material supply to production, processing, and product distribution.

Facing Many Challenges

In Vietnam, this model is particularly emphasized in the agricultural sector. Some banks have also expanded to retail and consumer supply chains. However, by 2025, value chain and supply chain lending still face many limitations. According to the Bank Strategy Institute, although 87% of commercial banks have implemented this type of lending, value chain lending in agriculture accounts for only about 1.5% of total loans in the agriculture, forestry, and fishery sectors. This reflects a small-scale implementation that does not match its potential.

Major banks such as VietinBank, BIDV, and Agribank have pioneered supply chain financing products, such as supplier factoring. HDBank offers supply chain lending for businesses in supermarket and convenience store chains, and eFactory provides supply chain finance based on existing receivables.

Mr. Trần Hoài Phương, Director of Corporate Banking at HDBank, stated that as of the end of 2022, the total scale of supply chain operations reached nearly VND 20 trillion, maintaining an annual growth rate of over 35%. HDBank has integrated into many global value chains and aims to expand its supply chain financing portfolio to 8,000 businesses with a total value of up to USD 3 billion (over VND 60 trillion), including in agriculture and funding both suppliers and distributors.

Although some banks have taken the lead, many commercial banks remain cautious due to concerns over risks in chain financing. Notable risks include forged documents, weak financial management by borrowers, market price volatility, abnormal weather conditions, and especially the lack of commitment among chain members. Another major issue is contract breaches—when farmers or businesses do not honor consumption agreements—disrupting the chain and causing losses for both banks and stakeholders.

Additionally, the lack of agricultural and weather risk insurance products increases concerns for lenders. Furthermore, links between commercial banks and chain members remain loose.

What Solutions to Promote It?

In 2025 and the following years, Dr. Nguyễn Hoàng Hiệp, an economic expert, suggests the following synchronized solutions to promote value chain and supply chain lending in Vietnam:

First, the Government and the State Bank of Vietnam (SBV) need to further improve the legal framework to facilitate participation in value chains. Incentive policies—such as interest rate reductions, service fee exemptions, or tax incentives for businesses participating in linkages—should be clarified. Additionally, clear regulations on penalties for contract violations within value chains are needed to enhance accountability among members.

Second, blockchain technology holds great potential for improving efficiency and transparency in value chain lending, especially in agricultural finance. With the ability to create transparent, immutable, and consensus-based transaction ledgers, blockchain can help monitor cash flows and reduce fraud risks.

Third, to ensure value chain sustainability, banks should act as "connectors," supervising cash flows and promoting cooperation among members. Commercial banks should proactively design flexible credit products, such as factoring or supply chain finance, to meet the working capital needs of businesses and individuals. Research institutes and professional organizations should support chain member verification and provide consulting services on production and consumption, thereby improving product quality and marketability. Enterprises also need to enhance their capacity to join supply and value chains led by large firms, thus avoiding barriers due to being "not big enough."

Finally, developing risk insurance products and accelerating digital transformation is essential—especially for agricultural value chain lending. For banks, digital transformation is key to improving lending efficiency. Simplifying procedures and promoting online lending channels will help businesses and individuals access capital more quickly while reducing operational costs for banks.