Peer-to-Peer Lending under Regulatory Incubator Framework: Guidelines for Lenders (Legal Entities)
In a significant move towards digital finance, Vietnam has established a regulatory framework for Peer-to-Peer (P2P) lending platforms, as outlined in Decree No. 94/2025/ND-CP. Effective from July 1, 2025, these regulations aim to foster innovation, expand financial inclusion, and ensure consumer protection.
Who Can Participate?
Only Vietnamese-licensed Fintech companies without foreign investment are eligible to participate in the P2P lending sandbox. Licensed credit institutions (banks) can also join, but only in approved areas within the sandbox scope. Foreign-invested enterprises are excluded.
Application and Registration
To join the sandbox, companies must submit a comprehensive application dossier in Vietnamese to the State Bank of Vietnam. The dossier must include operational plans, consumer protection commitments, and risk management processes. It must be complete, legally compliant, and include notarized, legalized, or certified copies where applicable. The State Bank will acknowledge or request dossier completion within 5 working days.
Operational Requirements
All P2P lending transactions must be conducted exclusively in Vietnamese Dong (VND). Operators must demonstrate operational capacity and ensure activities do not threaten financial system stability. Participants are obliged to implement strict consumer protection and risk management mechanisms to safeguard clients and the financial system.
Legal Obligations
Firms must comply fully with the sandbox regulations during the trial period. Non-compliance or unauthorized operation risks regulatory sanctions. Many existing businesses reportedly have yet to fully comply with these regulations after their July 2025 effective date.
Licensing and Supervision
Participation in the sandbox provides temporary authorization to test and refine P2P lending models under close regulatory supervision before full licensing frameworks are eventually developed.
Contracts and Loan Terms
Contracts in P2P lending must comply with relevant laws. Loan contracts entered into on a digital platform participating in the sandbox cannot exceed a term of two years. Customers using a P2P lending solution acknowledge and bear risks associated with the pilot phase.
Borrowers and Lenders
Borrowers are limited to legal entities (excluding banks) established in accordance with Vietnamese law, and individuals who are Vietnamese nationals. Lenders include credit institutions, foreign bank branches, other legal entities (including companies, except pawnshop companies established under Vietnamese law), and individuals who are Vietnamese nationals.
Debt Collection and Bad Debts
Debt collection services are now prohibited by law. The ability of companies to recover bad debts arising from P2P lending remains uncertain.
Third-Party Involvement and Data Sharing
P2P lending involves the indirect participation of a third party, the P2P lending company. The sharing and processing of customer data between the lender and the P2P lending company must comply with various regulations.
Regulatory Considerations for Banks
Banks are required to comply with regulations on Know Your Customer (KYC) procedures, credit approval, monitoring use of loan funds, operational safety limits, and credit risk management requirements. Lenders should pay special attention to regulations on the confidentiality of customer information.
Conclusion
The new regulations for P2P lending in Vietnam provide a clear pathway for banks and companies to engage in this innovative form of lending. However, they must exercise caution, as lending is a conditional business line, and the Law on Enterprises prohibits engaging in a conditional business line without satisfying all legal conditions. Clarity in the legal framework will be a key factor in helping banks and companies gain greater confidence in harnessing the potential of P2P lending solutions.
- The new regulatory framework for P2P lending in Vietnam allows licensed Vietnamese Fintech companies and banks to participate, but foreign-invested enterprises are excluded.
- To engage in the P2P lending sandbox, companies must submit a comprehensive application in Vietnamese, detailing their operational plans, consumer protection measures, and risk management processes.
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