Vietnam tightens grip on debt-collecting business

By    October 14, 2016 | 04:36 pm GMT+7
Vietnam tightens grip on debt-collecting business
A client counts Vietnamese dong banknotes at a bank in Vinh Yen Town, Vietnam. Photo by Reuters/ Kham

Debt collectors will no longer be allowed to dress like gangsters at work.

Vietnamese regulators are preparing to tighten the rules that govern debt collection in an effort to clamp down on collectors who pester and abuse customers.

On the one hand, the Finance Ministry has removed the required minimum registered capital of VND2 billion ($90,000). On the other, it has introduced stricter rules for debt collectors.

Debt collectors have a reputation for being rude and intimidating, so regulators are trying to curb this abusive behavior.

Under the proposed regulations, debt collectors must have written proof to present themselves as an authorized worker for a licensed collection company.

Law-abiding debt collectors are also not allowed to dress like gangsters when they meet debtors to ensure they do not feel physically threatened to make payment.

Statistics show that Ho Chi Minh City currently has 19 licensed debt collection companies that employ around 160 people.

In the past five year, they have been hired by lenders to recover funds worth up to VND1.12 trillion ($50 million), but have only managed to collect 14 percent of that amount.

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