Unlocking capital for the private sector

Some typical credit packages are available for private-sector enterprises. Therefore, unlocking capital sources for the development of the private sector has become an urgent issue.

Challenges in Accessing Capital

Currently, the private sector comprises more than 940,000 enterprises and over 5 million business households, contributing about 50% of GDP, over 30% of total state budget revenue, and employing about 82% of the workforce. In recent years, the private sector has significantly contributed to economic growth, job creation, innovation, productivity improvement, enhancing national competitiveness, and helping to reduce poverty and stabilize social life.

Although the private sector is affirmed as one of the key drivers of the national economy, Resolution 68-NQ/TW dated May 4, 2025, issued by the Politburo, also frankly acknowledges that the private economy still faces numerous barriers hindering its development. It continues to struggle in accessing essential resources, especially capital, technology, land, natural resources, and high-quality human resources.

According to statistics from the State Bank of Vietnam, as of the end of 2024, outstanding credit to the private sector reached nearly VND 7 quadrillion (approx.), an increase of about 14.7% compared to 2023, accounting for about 44% of total outstanding credit in the economy. Of this, 100 credit institutions had outstanding loans to small and medium-sized enterprises (SMEs), totaling VND 2.74 quadrillion—up 10.7% compared to the end of 2023—representing 17.6% of total outstanding credit. There were 208,992 SMEs with outstanding loans.

Currently, SMEs make up nearly 98% of all enterprises nationwide, yet they access less than 20% of total bank credit. That is why one of the key tasks and solutions stated in Resolution 68-NQ/TW is to enhance and diversify capital sources for the private sector.

This includes policies to prioritize a portion of commercial credit for private enterprises, especially SMEs, supporting industries, and innovative startups to invest in machinery, equipment, new technologies, green transformation, digital transformation, export credit, and supply chain-based credit.

Efforts Needed from All Sides

The reality shows that access to bank credit by private-sector enterprises remains very limited. However, according to economic experts, banks should not be blamed, as they are merely financial intermediaries, and their lending capital primarily comes from the mobilized funds of individuals and economic organizations. Therefore, the top priority for banks when granting credit is to preserve capital.

Meanwhile, according to the Ministry of Finance, although the private sector is large in number, it remains weak in strength. Nearly 98% of enterprises are micro, small, or medium-sized; their competitiveness, operational efficiency, and management skills are still limited.

Nguyen Van Than, Chairman of the Vietnam Association of Small and Medium Enterprises, also acknowledged the need to sympathize with banks, as they face immense revenue pressure. Banks are also businesses subject to State Bank regulation. Thus, the issue is not just about borrowing but also having the resources to repay.

Nguyen Thanh Khiet, Chairman of ASCO Auditing Company, stated that one of the biggest challenges SMEs face when borrowing from banks is the lack of collateral and non-transparent financial records. To address this, Mr. Khiet suggested implementing comprehensive solutions from banks, businesses, and regulatory authorities.

For banks, he proposed the development of specialized financial products such as unsecured loans based on business cash flow, loans against output contracts, or loans secured by assets formed from the borrowed capital. Additionally, credit evaluation models should be expanded based on actual business transaction data, rather than solely focusing on collateral.

Moreover, restructuring the Credit Guarantee Fund will also help improve credit access for private-sector businesses. First, the fund's charter capital should be increased. Additionally, credit guarantees should be based on almost entirely unsecured principles. If collateral is still required, businesses may prefer borrowing directly from banks to avoid paying guarantee fees. Importantly, if a business ceases operations or goes bankrupt, all guarantee obligations should be nullified. To do this, the fund must establish a risk provision reserve. Only then can fund managers confidently offer guarantees to businesses.