Increasing access ability to capital through electronic lending method

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Many banks have initially implemented lending by electronic method. Photo: MSB

It is expected to facilitate banks and increase access ability to capital for enterprises

Circular 06 is considered to promote credit institutions to apply technology and further digitalize their lending activities, thereby shortening processes, procedures, and borrowers. Customers do not have to go to the bank, it is easy and convenient to access loans in a faster time and more convenient way. These regulations will create a positive signal for the development of consumer lending and production and business activities in Vietnam.

In fact, many banks have implemented lending by electronic means. For example, Agribank has actively promoted solutions to improve loan documents and procedures, and non-cash solutions in credit activities through the automatic debt collection system Center cut. In addition, Agribank is in the process of completing the Electronic Banking Project (Internet Banking), in which: applying technology and automation methods in the loan origination process, managing problematic debt, and secured asset management.

BIDV also applies electronic means from receiving loan requests (ibank) to creating, implementing, and managing loans. BIDV aims to enhance automation in the credit granting process, application of technology in customer management, and financial analysis...

Vietcombank has introduced the CLOS system to support the approval of loan initiation for wholesale customers, the RLOS system to support the approval of loan initiation for retail customers...; at the same time, studied the application of digital signatures in credit appraisal.

MB is also implementing lending activities on many different transaction channels such as App MBBank, Biz MBBank... or linking with third-party systems such as Mcredit Finance Company. Based on available customer information sources from channels, MSB builds an automatic credibility scoring system, automatically measures the bankrupt probability of customers in batches, and applies pre-approval in batches to reach customers through automated marketing channels. Techcombank has also developed and applied a number of stages in the credit granting process based on the IDC system, including credit appraisal and approval for real estate loans for project houses.

NCB also uses the iLos system in managing and circulating records to help manage and store records centrally, and accelerate and manage the process of processing records at each stage and level of processing. SHB's basic automation platform is the CORE system, which can automatically calculate, monitor and manage loans; the reporting system automatically responds to the data demand according to the needs of loan management. VPBank also implemented overdraft lending services for online corporate customers, online limit disbursement…

According to the State Bank of Vietnam, commercial banks have generally recognized the widespread application of electronic means to the lending process. Most banks have applied electronic means to one or several stages of the lending process. Credit institutions tend to consolidate and promote the comprehensive and synchronous application of information technology systems, expanding the digital ecosystem; continue to invest in research, improvement, and application of solutions and digitization technology towards improving the automation of the lending process.

According to Assoc. Prof. Dr. Nguyen Thi Mui, a member of the National Monetary and Financial Policy Advisory Council, with the addition of e-lending, loans would be reviewed online, which would facilitate enterprises' access to credit, thereby extending credit to the whole economy.

At the same time, to ensure safety when lending by electronic method, Circular 06 also amends and supplements a number of other terms to suit this form of lending. For example, regulations on principles to ensure the requirements of security, safety, protection, confidentiality, information technology system safety standards, and risk management in the electronic environment; regulations on identification and verification of customer identification information by electronic means (eKYC); regulations on the outstanding loan balance for an individual customer not more than 100 million dongs; regulations on appraisal, agreement, loan documents...

However, there are also opinions that, in order for banks to be able to deploy lending by mass electronic means, and widely apply electronic means to the lending process, it is necessary to require investment resources, specific operation scale, and a development plan of the credit institution, a roadmap, research, and test before applying widely.