Peer-to-peer Lending under Regulatory Sandbox Model: Guidelines for Institutional Lenders
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Vietnam has established a regulatory sandbox for peer-to-peer (P2P) lending as part of its fintech legal framework, effective July 1, 2025. The sandbox, outlined in Decree No. 94/2025/ND-CP, governs P2P lending activities and aims to promote innovation while mitigating risks.
Eligibility and Scope
The sandbox applies to P2P lending platforms operated by Vietnamese Fintech companies. Only domestic Fintech companies without overseas investment are eligible to register for the sandbox. Licensed credit institutions may participate but only in specifically approved areas. All transactions must be conducted in Vietnamese Dong (VND).
Application and Certification
Companies must submit a comprehensive application dossier in Vietnamese, including notarized, legalized, and certified documents if issued by foreign authorities. The dossier must demonstrate operational capacity, consumer protection commitments, risk management mechanisms, and assurance that the pilot does not threaten financial system stability.
Operational Conditions During Sandbox Trial
Participants must commit to consumer protection and risk management, operate without jeopardizing the financial system’s safety or stability, and adhere to the testing period of up to two years, with possible extensions.
Regulatory Compliance
P2P lending activities must align with other relevant Vietnamese laws and banking regulations. The regulatory sandbox allows companies to pilot innovative solutions under controlled regulatory relaxation while being monitored.
Key Considerations
- Banks should comply with regulations on Know Your Customer (KYC) procedures, credit approval, monitoring use of loan funds, operational safety limits, and credit risk management.
- The decree does not require P2P companies to establish any mechanism for lenders and borrowers to set up security through the P2P platform.
- The three parties involved in P2P lending are the P2P lending company, the lender, and the borrower.
- Companies should exercise caution when engaging in lending activities, as lending is a conditional business line and requires a license issued by the State Bank of Vietnam.
- P2P lending solutions under the regulatory sandbox mechanism hold the potential to expand customer reach, provide a new income channel for idle capital, improve capital allocation efficiency, reduce black credit, drive innovation, and minimise activities like usurious lending, fraud, and other forms of underground black credit.
- The sharing and processing of customer data between the lender and the P2P lending company must comply with specific regulations.
- Customers who use a P2P lending solution acknowledge the risks involved and bear responsibility for any losses that may arise during the trial.
- Lenders should pay special attention to regulations on the confidentiality of customer information when participating in P2P lending.
- The lender includes banks, other legal entities (except pawnshop companies), and individuals who are Vietnamese nationals.
- P2P lending involves the indirect participation of a third party, namely the P2P lending company that provides the digital platform.
- The borrower includes legal entities (excluding banks) and individuals who are Vietnamese nationals.
- The decree sets out limits on borrowers, maximum outstanding loan balance, loan duration, and requires lenders to ensure that their lending funds come from lawful sources.
In conclusion, the new regulations for P2P lending in Vietnam aim to foster innovation while ensuring consumer protection and financial system stability. Companies and banks involved in P2P lending must adhere to strict application, risk management, and operational requirements and operate under the oversight of the State Bank of Vietnam during the testing phase.
- The innovative solutions tested in the P2P lending regulatory sandbox in Vietnam have the potential to revolutionize the business sector, especially the finance industry, by leveraging technology for improved capital allocation and reducing black credit.
- To ensure the success of technology-driven business models in the finance sector, such as P2P lending platforms, it's crucial for these companies to comply with various regulatory aspects, including consumer protection and proper debt management, as outlined by the State Bank of Vietnam.
