Large corporations, including non-financial ones, should be allowed to establish comprehensive financial companies with leasing functions. With proper legal frameworks, Vietnam could have 100-150 leasing companies in the next five years.

Resolution 68 marks the first time that financial leasing has been officially recognized as a strategic medium- and long-term capital solution for the private sector. This presents a major opportunity to revive a neglected yet promising market.

VietNamNet spoke with Pham Xuan Hoe, Secretary General of the Vietnam Financial Leasing Association, about the current state, opportunities, and future of financial leasing in Vietnam.

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Pham Xuan Hoe: Applying commercial bank regulations strips leasing firms of their core advantages.

What new opportunities does Resolution 68 bring to the financial leasing market?

Pham Xuan Hoe: This is a turning point. For the first time, the Central Committee has put financial leasing on par with other strategic credit tools such as green credit, credit guarantees, SME support funds, and new capital-raising models.

Resolution 68 not only affirms the role of the private sector but also calls for a completed legal framework, expanded asset categories, and better cooperation between financial institutions. This is particularly important for SMEs and individual business households, who often struggle to access long-term credit from banks.

If policies are clearly defined and consistently implemented, financial leasing could become a "pressure release valve" for commercial banks and help ease long-term capital burdens in the economy.

Why does financial leasing still account for only 0.28% of total credit, with minimal penetration in businesses?

There are three main reasons.

First, there are too few leasing companies - only nine in total (eight active, one being restructured). International norms suggest this number should be ten times the number of commercial banks. Vietnam’s current total meets only 1.5% of market demand.

Second, outdated policy thinking groups financial leasing under the same regulatory framework as deposit-taking banks, eliminating operational flexibility.

Third, societal and even regulatory awareness of financial leasing remains limited. As a result, the sector’s total outstanding loans are just around 47 trillion VND (approximately USD 1.96 billion), tiny compared to the potential needs of nearly one million businesses and 5.2 million business households.

What are the consequences of treating leasing firms like commercial banks, and what needs to change?

Applying the same rules removes key leasing advantages such as greater risk tolerance, faster decision-making, and customizable products for SMEs. Current regulations do not distinguish leasing firms from deposit-taking banks, resulting in excessive compliance costs, rigid processes, and narrow product portfolios.

To fix this, Vietnam needs either a dedicated financial leasing law or a separate chapter in the Law on Non-Deposit Credit Institutions. Risk management standards should be separated from those applied to banks. The asset list should expand to include intangible items like software, copyrights, and usage rights.

Why haven’t new measures in the 2024 Law on Credit Institutions and Circular 26 been fully implemented yet?
The biggest hurdle is technological infrastructure. For example, electronic approvals for leases under 500 million VND (about USD 20,800) haven’t launched due to outdated IT systems. That loan cap is also too low to attract interest.

Meanwhile, services like banking advisory or fee-based offerings await clearer guidance or stronger market demand. Additional reporting requirements for customers with debt over 0.5% of charter capital are also cumbersome and discourage client engagement.

How can Vietnam increase the number of leasing firms quickly?

First, simplify licensing procedures and encourage both domestic and foreign direct investment (FDI) in new leasing companies. The current capital requirement of 150 billion VND (about USD 6.25 million) is not too high, but the process remains complex.

We should allow large corporations, including non-financial ones, to establish integrated financial companies offering leasing services. At the same time, a dedicated leasing law or legal framework for non-deposit lenders would provide regulatory clarity and attract investors. If implemented effectively, Vietnam could reach 100-150 leasing companies within five years, serving 10-15% of SMEs.

How do cultural habits and social barriers affect the leasing market’s development?

Vietnamese business culture still emphasizes asset ownership, making many companies overlook the benefits of leasing in capital efficiency and tech upgrades. Even tax authorities and property registration offices are unfamiliar with the leasing model, often delaying or mishandling paperwork.

To change this, we need a robust public education campaign involving industry associations, banks, and regulators to highlight leasing’s benefits and processes. Meanwhile, leasing products must be made simpler and more accessible to SMEs - such as leasing for production lines, medical equipment, or vehicles with bundled, hassle-free services.

Financial leasing in Vietnam and global benchmarks

Vietnam: Approximately 47 trillion VND in outstanding loans (0.28% of total credit), 9 companies operating.

Germany: Leasing accounts for about 16% of total business credit.

USA: 22% of corporate assets come from financial leasing.

China: 18% of businesses use leasing contracts.

Japan, South Korea, Taiwan: 70-80% of SMEs lease machinery and equipment.

Lan Anh