Green transformation is becoming an increasingly clear pressure on Vietnamese businesses. However, for the small and medium-sized enterprise (SMEs) sector, the issue is not only the question "do you want to be green or not", but whether businesses have sufficient financial, technological and data capacity to implement the transformation process or not.
Currently, SMEs account for nearly 98% of the total number of businesses operating in Vietnam, but access to capital is still limited. Therefore, green credit needs to be designed in a more substantive, more accessible and more suitable for the endurance of businesses.
In recent years, green transformation is no longer a distant story for businesses. Net Zero commitments, emission reduction requirements, ESG standards, traceability, greenhouse gas inventory, efficient energy use, sustainable packaging, circular economy and green regulations from the export market are gradually entering each order, each contract, each supply chain.
According to data from the Vietnam Association of SMEs, about 80% of SMEs have not accessed credit or face significant difficulties in accessing formal credit. This is a worrying reality, because when ordinary credit is already difficult to access, green credit is even more difficult.
From lack of capital to lack of green capital absorption capacity
Green credit, in essence, is still bank credit. Businesses wanting to borrow capital must prove their ability to repay debts, feasible production and business plans; and at the same time increasingly have to meet more requirements on the environment, emission data, energy efficiency or environmental benefits of the project. For large enterprises, these requirements can be handled through the legal department or ESG.
However, for SMEs, especially micro and small enterprises, this is a significant barrier. Businesses need capital for green transformation, but to borrow green capital, they must have data, dossiers, investment plans and management capacity, which in reality, many businesses can only form after being supported for transformation.
In other words, many businesses are stuck in a vicious circle when they are not "green" enough to borrow green capital, but lack capital to invest in the greening process.
Many businesses said they are willing to invest in energy-saving equipment, renovate wastewater treatment systems, change packaging, digitize production management or meet customer environmental standards. However, high initial investment costs, long return periods, while economic benefits are not always shown immediately, causing many businesses to fall into a dilemma.
Green capital flows increase, but have not flowed strongly into small businesses
In recent years, green credit in Vietnam has made significant progress. According to the State Bank, by June 2026, 82 credit institutions had generated green credit balances, with a total outstanding balance of about 828 trillion VND. Along with that, the policy framework on green finance, green classification and environmental - social risk management is also gradually being completed.
However, the current green credit structure partly shows why SMEs still have difficulty accessing this capital source. About 30-33% of green credit balance is currently concentrated in the agricultural sector, while about 40% flows into renewable and clean energy. These are all sectors that often have relatively clearly defined investment projects, have collateral, specific expected cash flow or capital scale large enough to meet bank appraisal requirements.
Meanwhile, the demand for green transformation of SMEs is often in smaller, more dispersed and more difficult to standardize investments. This mismatch makes the green credit model designed according to the logic of large projects not really compatible with the reality of SMEs.
An economy that wants to transition green cannot only rely on a number of large projects. Most of the emissions, energy waste, inefficient use of resources and environmental risks are scattered in hundreds of thousands of small businesses, production facilities, secondary and tertiary suppliers, business households developing into businesses and small links in the value chain. If this sector is not properly supported, green transformation will lack depth and it will be difficult to create substantial changes on a large scale.
Green pressure is becoming competitive pressure
Business reflections in the past time show that businesses are simultaneously facing many pressures: high capital costs, fluctuating orders, increased compliance procedures, digital transformation requirements, technological innovation and recently green transformation. These pressures are not separate, but at the same time increase the burden on the management, financial and operational capacity of businesses.
It can be seen that SMEs often do not lack awareness of transformation, but lack implementation capacity, lack necessary information and lack appropriate support tools. Without clear guidance, easy-to-understand criteria and support mechanisms close enough to the reality of businesses, green credit will only be a beautiful concept but not feasible, and difficult to become a real resource for the transformation process.
Policies need to shift from "green lending" to "helping businesses qualify for green loans
Many programs concretizing Resolution 68 are being promoted, from interest rate support for green projects, encouraging ESG practices and circular economy, supporting businesses to "go global", to developing 1,000 pioneering businesses. These programs can become "runways" to test new support mechanisms for the private economic sector, in which green credit needs to be seen as a key tool.
To unlock green credit for SMEs, policies need to change the approach. It is not possible to only require banks to increase green debt balance, nor is it possible to only call on businesses to proactively transform. It is necessary to prioritize the formation of a synchronous support ecosystem, in which the State, banks, associations, consulting organizations, guarantee funds and business development programs participate together, share risks and create conditions for businesses to transform substantively.
First of all, it is necessary to stratify SMEs according to the level of green transformation readiness. Unready groups need to be supported with consulting, training, current status measurement and dossier standardization; groups with investment plans but lacking collateral need to be supported with green credit guarantees; groups with feasible projects need to be prioritized for access to interest rate support, long-term capital or co-funding programs.
Second, it is necessary to simplify the criteria and procedures for confirming green projects for SMEs. Do not apply the same set of documents for small businesses as for large-scale projects. Instead, it is necessary to build a list of small-scale green investments that are recognized in advance. For small loans, a rapid confirmation mechanism, simple application forms and post-inspection should be applied according to the level of risk.
Third, it is necessary to establish a green credit guarantee mechanism for SMEs. When most SMEs still face significant difficulties in accessing credit, without a risk sharing mechanism, green credit will find it difficult to enter this sector. The guarantee mechanism does not replace the bank's appraisal responsibility, but it can help banks be bolder with businesses with potential for conversion but lack of collateral.
Fourth, green credit needs to be linked to the market. Businesses should only boldly borrow green capital when they see clear economic benefits, such as reducing costs, retaining orders, participating more deeply in the supply chain, meeting export requirements or selling products with higher value. Therefore, green credit policies need to be accompanied by green public procurement, green product standards, eco-labels, supporting green trade promotion and connecting small businesses with leading businesses.
Do not let small businesses stand outside green transformation
According to World Bank estimates in 2022, Vietnam's total additional financial needs to build resilience and decarbonization could reach 368 billion USD in the 2022–2040 period, equivalent to 6.8% of GDP per year, of which the private sector contributes 184 billion USD, accounting for 50%. However, the private sector is not a homogeneous bloc. Besides large corporations, the majority are still SMEs with limited capital, technology and management capabilities.
If green financial policies are only suitable for large enterprises, the green transformation process will lack inclusiveness. At that time, SMEs may face double risks, both difficult to access capital for transformation and at risk of losing market because they do not meet increasingly strict green standards.
Therefore, unlocking green credit for SMEs cannot only be the task of the banking industry, but needs to be seen as a comprehensive policy program. Only then can green credit become a substantial resource, helping the green transformation process to go deeper and spread to the largest business sector of the economy.
Green transformation will not be successful if SMEs are left behind. Green credit is only truly meaningful when it does not stop at increasing outstanding debt figures, but becomes a capital flow that helps hundreds of thousands of small businesses upgrade technology, reduce costs, meet new standards and participate more deeply in sustainable value chains. To do so, policies need to shift from the thinking of "having green capital" to the thinking of "helping businesses be able to absorb green capital". This is the key point to turn the pressure of green transformation into a new driving force for the Vietnamese private economic sector.
