Vietnamese splash out on loans adding up to $15 billion in 2015

By Thanh Thanh Lan May 16, 2016 | 10:41 pm PT

Financial companies offer lucrative incentives to attract customers to their loans.

Vietnam’s consumer finance market rose to a five-year high last year after people borrowed $15.12 billion for consumption, said StoxPlus, a leading company that provides information for financial enterprises and institutions in Vietnam.

Data from StoxPlus showed that the domestic consumer finance market recorded a year-on-year increase of 44 percent in 2015. Total debts accounted for 10.4 percent of Vietnam’s GDP.

StoxPlus said the boom in loans for consumption came from higher demand for real estate as well as a change in borrowing habits, with people switching to financial companies rather relying on friends and family for loans.

Vietnam has four leading companies in the area of consumer finance, including FE Credit, Home Credit, HD Saigon and ACS. StoxPlus added that these enterprises will face stiff competition this year as the number of companies offering consumption loans is growing at a staggering rate.

In addition, the four largest companies are highly likely to deal with a threat from payment service providers who have applied cutting-edge advances to their businesses.

“By taking advantage of widespread service networks and the mass of customer data, companies providing payment services such as MOMO, Payoo or BankPlus have a lot of motivation to step into the consumer finance market. Any finance company who cannot keep pace with modern advances will fall behind,” StoxPlus said.