HoREA proposes lifting restrictions on loans for capital contributions to unlisted companies.

HoREA has proposed removing restrictions that prevent banks from lending for certain capital needs, arguing the current rules limit access to credit and create unequal treatment across business types. In a petition sent on 2 April 2026 to the State Bank of Vietnam and related agencies, the association asked for amendments or repeal of several provisions in Circular 39/2016/TT-NHNN.

Petition targets Circular 39 restrictions on three capital needs

HoREA’s proposal focuses on three common categories of financing demand: capital contributions, investment cooperation, and loans used to reimburse funds already spent.

HoREA President Le Hoang Chau said that if existing restrictions remain, access to credit could narrow even as the economy needs additional momentum for growth.

Impact of the suspended lending categories

Circular 39 defines capital needs that banks are not allowed to lend for. Previously, Clauses 8, 9 and 10 of Article 8 blocked three cash flows: capital contributions to unlisted enterprises, capital contributions to projects that do not meet business conditions, and loans to cover funding shortfalls. From September 2023, these contents were suspended, allowing banks to reconsider lending.

After nearly three years of applying the mechanism, outstanding debt related to these three categories accounted for about 5% of total credit across the economy. With a size of more than 18.4 quadrillion dong in 2025, the portion is equivalent to about 920 trillion dong—large enough to support market activity, but also raising concerns about credit risk.

Regulatory concern: diversion of funds and bad-debt risk

One concern raised by regulators is that disbursed funds could be diverted to third parties. While funds are intended for the stated purpose, HoREA said they can be redirected in practice, increasing the risk of rising bad debts.

Hoang Chau argued that the key risk is tied to credit control rather than the financing need itself. He said that if appraisal and supervision are properly implemented, these loans can still be managed safely.

HoREA’s analysis of Clause 8: bias against capital contributions to unlisted firms

HoREA analyzed Clause 8, which prohibits lending for capital contributions or the purchase of shares in companies not listed on the stock market or not registered for trading on UPCoM. The association said this regulation is inconsistent with current laws and does not reflect investment realities.

HoREA cited the 2020 Companies Law, which allows capital contributions by organizations and individuals, and the Investment Law 2025, which recognizes investors’ access to credit. The association said capital contributions are legal, but in practice financing support is not available in many cases.

HoREA said the rule creates bias among business forms: investors can borrow to buy shares of listed companies or those traded on UPCoM, but face obstacles when injecting funds into unlisted companies. HoREA therefore proposed removing Clause 8 to allow capital flows to participate in equity contributions more evenly.

HoREA’s analysis of Clause 9: credit blocked at the stage when projects need it most

HoREA said Clause 9 does not reflect the project life cycle, particularly in real estate. Generally, a company must self-finance to acquire land and create a land bank. After investment approval, it enters a stage requiring large capital to execute the project.

Under the current regulation, lending is allowed only when the project meets business conditions. HoREA said that at that point developers can mobilize funds from customers, reducing the need for bank credit—while credit demand is highest earlier, after land is secured and construction begins. The association said this blocks credit when it is most needed and opens it when demand is lower.

HoREA described this as a major bottleneck. It said most projects require substantial funds during construction, before sales revenue is generated, and without credit projects may be delayed or fail to proceed.

The association also argued the rule is inconsistent with the legal framework. When a project qualifies for business, developers can already mobilize customer capital, while actual credit demand arises earlier—after land has been secured and construction has started.

HoREA further noted that real estate developers are required to have minimum equity of 15–20% of total investment, meaning the early stage already uses most of their own capital. When moving into construction, it said credit demand is logical but restricted.

Social housing example

HoREA cited social housing as an example. Although the law allows priority loans for social housing, it said access to capital has not been realized in practice, forcing developers to borrow at higher commercial costs. It added that current rules restrict lending at the stage when funding is most needed, further hampering cash flow in this segment.

HoREA’s analysis of Clause 10: refinancing loans and the role of collateral

HoREA also analyzed loans to cover financial shortfalls (Clause 10). The association described these as a common refinancing tool that reduces financial pressure and increases borrower autonomy. It said loans are often secured by assets already formed.

For individuals, HoREA said buyers who used their own funds can borrow again to supplement capital for business, with the pledged asset being the property itself. For enterprises, after committing funds to assemble land, it said they can borrow to recoup capital and continue the project, with land or project assets as collateral.

HoREA said this mechanism helps reduce reliance on own capital and maintain cash flow. It said risks arise when collateral is overvalued or credit processes are mismanaged, and argued the issue lies in credit control rather than the financing itself. It therefore said banning lending for this purpose is not appropriate.

Proposals: remove Clauses 8 and 10, relax Clause 9, and increase regulatory flexibility

HoREA proposed removing Clauses 8 and 10 of Circular 39 and relaxing Clause 9. The association also recommended adding a provision allowing the State Bank to proactively identify additional cases that should not receive credit under the 2024 Banking Law, to increase regulatory flexibility.

Hoang Chau said the proposals aim to remove capital bottlenecks. He added that when credit is unlocked, enterprises can implement projects, sustain operations, and create jobs, and that relaxing lending conditions would benefit not only real estate but also broaden credit flows in the economy toward the growth targets set for 2026 onwards.