Vietnam Urged to Simplify Green Loan Access Amid Data Bottlenecks for SMEs

HANOI – Vietnam must simplify certification requirements and establish a national environmental data platform to unlock green financing for its small and medium-sized enterprises (SMEs), according to experts speaking at a conference on June 23.

Statistics from the State Bank of Vietnam (SBV) show that outstanding green credit reached VND 828 trillion (US$31.4 billion) by the end of the first quarter of this year. While this figure represents a 4.6-fold increase since the program's inception in 2017, it accounts for just 4.3% of the economy's total outstanding loans.

The majority of this funding, over 63%, has been directed towards projects in agriculture, forestry, fisheries, and renewable energy.

Bùi Thanh Minh, Deputy Director at the Private Economic Development Research Board, noted that green finance has predominantly flowed to large-scale projects with well-defined business models, collateral, and documentation that meet banks' stringent appraisal criteria.

This leaves SMEs, which constitute 97-98% of Vietnamese businesses, at a significant disadvantage. Minh highlighted that these firms often struggle to access green loans due to a lack of standardized environmental data, formal governance systems, and sufficient collateral. He added that approximately 80% of SMEs have no prior credit history.

"If green finance policies are designed only for large enterprises, the green transition will not be inclusive," Minh said. He warned that smaller firms face a "double challenge" of being unable to secure financing for green upgrades while simultaneously risking the loss of market access as environmental standards become more stringent globally.

Data is critical

A lack of reliable data remains one of the most significant obstacles to expanding green lending in the country. Many companies, particularly SMEs, do not have the environmental records or reporting systems required to qualify for green loans. Concurrently, banks find it difficult to access dependable information to assess project viability and monitor environmental risks.

Bùi Khánh Dũng, director of eco-friendly manufacturer Musa Pacta, stated that many businesses, especially smaller ones, are uncertain of their position in the green transition because Vietnam lacks a unified and practical set of green standards. He proposed the establishment of a transparent scoring system that would allow companies to measure their compliance with green criteria and identify areas for improvement before seeking financing.

"Scores should be linked to preferential lending rates, unsecured loan ratios or credit limits to create stronger incentives for businesses to invest in green upgrades rather than viewing them as an additional cost," Dũng said.

Echoing these concerns, Nguyễn Hồng Quang, Deputy Director General of the Environment Department under the Ministry of Agriculture and Environment, described data as "the weakest link" in Vietnam’s green finance ecosystem. He explained that unlike conventional lending, green credit requires banks to measure specific outcomes such as greenhouse gas emissions reductions, resource efficiency, and climate resilience.

"The absence of standardised databases, measurement indicators and information-sharing mechanisms has increased appraisal and monitoring costs while limiting the expansion of green lending," Quang stressed. He added that Vietnam's challenge has shifted from developing policy frameworks to ensuring their effective implementation through a transparent and measurable system.

From a lender's perspective, Nguyễn Quang Ngọc, Deputy Head of the credit policy board at Agribank, said the absence of a national classification system for green economic activities and a publicly available database of green projects complicates the consistent application of environmental, social, and governance (ESG) standards by banks. He also noted that many businesses remain unprepared, lacking necessary environmental documentation, ESG reporting capabilities, and adequate collateral.

To resolve these issues, Minh proposed simplifying green project certification criteria specifically for SMEs, rather than applying the same complex requirements used for large corporations. He also advocated for a policy shift from merely promoting green lending to actively helping businesses become eligible for it, arguing the government should take a more direct role instead of placing the burden solely on commercial banks.

Minh urged the government to use state budget resources to subsidise interest rates, allowing businesses to access loans at rates up to 2% lower. He also called for the development of a digital intermediary platform to consolidate environmental data and connect it directly with the banking system.