Consumer loans grew by 36 per cent per year on average in 2016-18 and continued to rise sharply in the first three quarters of this year. — Photo bvsc.com.vn

The competition to gain a larger share in the consumer finance market is heating up as rising capital demand before Tet (Lunar New Year) is an opportunity for both banks and finance companies.

To lure borrowers, NamABank is reducing lending interest rates by 0.5-1.5 percentage points per year for individual customers and by 0.2-0.5 percentage points for institutional customers.

Not only boosting consumer loans with secured assets, NamABank is also promoting unsecured consumer loans. Accordingly, individual may access consumer credit, home purchase and repair loans at the bank at preferential interest rates at 7-8 per cent per year.

ABBank is also offering consumer loans at 7 per cent per year, with simple and flexible procedures to meet diverse needs such as real estate loans, car loans, installment business loans, and secured consumer loans.

The bank is also offering other loan packages to meet different capital needs with interest rates from 8.2-9 per cent per year and free early repayment fees.

Other banks and consumer finance companies are also introducing programmes to attract customers who need capital at year-end.

According to Kalidas Ghose, Vice Chair of the Board of Members cum general directors of consumer finance company FE Credit, 2019 was a good year for the consumer credit segment.

The technology for consumer finance platforms is changing rapidly, helping lenders more easily approach customers, he explained.

Vietnamese consumers now accept products of consumer finance companies faster than before, and this helps profits grow, Ghose told online newspaper tinnhanhchungkhoan.vn. He believed the trend would continue in the near future.

Statistics of the SBV showed credit growth in the entire banking system in the first 11 months of 2019 exceeded 10 per cent, equal to the rate of the first nine months of 2018.

As the credit growth target was set at 14 per cent this year, banks and consumer finance companies still have significant room for growth in the last month of the year.

In 2016-18, consumer loans grew by 36 per cent per year on average, and continued to rise sharply in the first three quarters of this year.

Financial and banking expert Can Van Luc said the consumer credit system is quite diverse and has met the increasing demands of people.

According to Luc, if customers have a reasonable spending plan and a balanced budget, consumer loans are an effective option to meet their essential needs.

However, Luc suggested borrowers need to understand the lender’s legal information, interest rate conditions and their solvency before applying for a loan. — VNS