Vietnam’s Financial Sector Faces a Debt Crisis: Can Innovation Be the Answer?
As Vietnam enters 2025, its financial sector faces growing uncertainty. With the expiration of Resolution 42/2017/QH14 in , banks and financial institutions are scrambling to recover bad debts in a shifting legal landscape. Once a crucial framework for repossessing collateral and managing non-performing loans (NPLs), its absence has led to rising defaults, legal ambiguities, and increased borrower resistance—creating a perfect storm for debt recovery.
The numbers tell a troubling picture. Bad debts surged to VNĐ733.9 trillion by the end of 2024, up 3.4% from the previous year. These alarming figures highlight the urgent need for innovative debt collection strategies that recover bad debts effectively and reduce debt accumulation in the first place. According to the State Bank of Vietnam, Financial leaders, like Phạm Toàn Vượng, General Director of Agribank, said that the handling of bad debt collateral and bad debt recovery is facing many obstacles as the work has not been fully legalized.
Traditional collection strategies—calls, legal notices, and negotiations—are proving ineffective. As bad debts threaten financial stability, the industry must turn to technology-driven solutions. Could this be the beginning of a digital transformation in debt recovery?
check date, i thought it was Jan, 2024
Device Lock Technology: Smart Approach For Debt Collection Strategy
- Encouraging Timely Payments: Lenders can partially lock a borrower’s device, restricting access to non-essential apps and services while allowing emergency calls and transactions.
- Full Lock for Persistent Defaulters: If a borrower consistently fails to repay, the lender can enforce a complete lock, prompting immediate action.
Enhancing Financial Inclusion by driving Collections and Bad Debt Recovery
Beyond debt collection, Datacultr’s approach helps financial institutions expand credit access to underserved populations. With Resolution 42 no longer in effect, banks and NBFCs need stronger risk mitigation measures to lend confidently. Datacultr provides this security, allowing institutions to extend loans to new-to-credit customers while minimizing default risks.
Why Financial Institutions Should Choose Datacultr?
- Comprehensive Digital Debt Collection Platform – Seamlessly integrates borrower engagement, automated communication, and device lock enforcement.
- Smooth Integration – Easily connects with existing loan management systems for a hassle-free deployment.
- Ethical & Legal Compliance – Ensures fair treatment of borrowers while protecting lender interests.
Concluding Thoughts On Debt Collection Strategy For Vietnam
The post-Resolution 42 era presents a major challenge for financial institutions, but it also creates an opportunity for innovation. Instead of chasing debts after they have already become problematic, lenders can use Datacultr’s technology to ensure borrowers remain engaged and responsible from the beginning.
By adopting intelligent debt collection strategies, banks, financial institutions, and NBFCs in Vietnam can mitigate bad debt risks, reduce collection costs, and drive sustainable growth in the lending sector.
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