The Vietnam Gold Business Association recently petitioned the Prime Minister to allow gold jewelry enterprises to borrow gold from the public at agreed interest rates in accordance with civil law. 

They also requested the Government to issue specific regulations and instructions on the methods for mobilizing and purchasing gold from the public.

Truong Thanh Duc, director of ANVI Law Firm and VIAC Arbitrator, said that enterprises borrowing gold from the public is a civil relationship. The law has never prohibited it, nor have there been specific adjusting regulations.

In the banking sector, mobilizing and lending in gold is prohibited due to high risks. However, outside the banking system, gold-related transactions such as capital contribution, borrowing, gifting, exchanging, buying and selling, or using gold as collateral are not prohibited.

According to Duc, the law currently only prohibits using gold as a means of payment, regulating that "gold business, except for gold jewelry and fine arts" is a conditional investment and business field requiring a license (ranked 192nd in the 2025 Law on Investment).

Duc said the law does not prohibit parties from voluntarily agreeing to borrow gold (except for cases belonging to "gold business" activities, which must meet regulatory conditions). However, the risks of this form are enormous as it relates to both supply and price fluctuations.

If the debt is due and cannot be repaid, who would dare to borrow or be ready to lend?

If gold prices are stable or decrease, the risk is not high. However, when prices fluctuate strongly or even skyrocket, the borrower can easily fall into a state of insolvency in gold or converted cash.

The press recently reported on Saigon Aquatic Products JSC (APT) being unable to repay a debt of 5,833 SJC gold taels to Southern Bank (now Sacombank). 

At the time of borrowing, the SJC gold price was VND17.66 million/tael, equivalent to the converted value of VND103 billion. By the end of last year, the gold price had risen to VND152.8 million/tael, making the converted value VND891.28 billion, an 8.65-fold increase.

"Enterprises often borrow on a large scale, so even with no or low interest, the risk is still too great. Both enterprises and the public need to be extremely cautious with such massive potential risks," Duc said.

Enterprises can proceed if they assess feasibility and ensure the ability to repay in gold. However, Duc noted that the State needs to have clear warnings about risks for the public.

Lack of control could trigger new 'goldenization' cycle

Le Ba Chi Nhan, an economic expert, said Vietnam is considered one of the countries with a large amount of gold held by the public, but most of this resource has not entered business cycles or generated added value for the economy.

Meanwhile, gold jewelry manufacturers still have to purchase raw materials at market prices, facing significant capital pressure and dependence on tightly controlled legal supply. If a mechanism to borrow gold from the public is introduced, enterprises could reduce working capital pressure, expand production scale, and enhance the competitiveness of the jewelry and fine arts sector, which has export potential.

However, the feasibility of the proposal does not lie in the civil aspect, as borrowing assets is legally acceptable, but mainly in terms of monetary management and gold market stability, which fall under the Government’s regulatory scope.

He warned that ‘goldenization’ mechanisms in the economy, if not tightly designed, can pose many risks: creating a parallel gold market, increasing speculation, putting pressure on exchange rates, and weakening the role of the Vietnam dong in circulation.

If gold lending is freely agreed upon, there is a risk that it could evolve into large-scale gold mobilization activities similar to banking but outside the financial supervision system, Nhan said.

The expert believes the proposal can only be implemented with a clear “institutional safeguard”: limiting eligible borrowers (only manufacturing enterprises), restricting purposes (only for jewelry production), requiring registration, reporting, and supervision; and not allowing gold lending relationships to turn into disguised credit activities.

If properly designed, this could be a way to mobilize gold resources from the public for production instead of speculation. Conversely, without proper control, the mechanism itself could become the starting point of a new “goldenization” cycle. 

Thus, the issue is not whether to allow gold lending, but how to design a management mechanism that both effectively utilizes resources and ensures national monetary stability.

Tuan Nguyen