Development of consumer finance: vital to fight black credit

Thursday, Jan 21, 2021 18:30

Delegates at the conference on identifying and repelling black credit activities in HCM City on Wednesday. — VNA/VNS Photo Hua Chung

Increasing the development of consumer finance and simplifying procedures for loan applications would be a priority for commercial banks, financial companies and microfinance institutions as part of efforts to limit black credit, a conference heard in HCM City on Wednesday.

During the event, Deputy Governor of the State Bank of Viet Nam (SBV) Dao Minh Tu considered abolishing black credit as one of the important tasks that has been continuously implemented across the whole credit institution system in Viet Nam.

In recent years, the SBV and credit institutions in localities have been co-coordinating with the Ministry of Public Security and local authorities in implementing drastic measures to limit black credit.

In the future, the SBV will continue improving the awareness of local people about credit policies, loan packages and procedures for loan applications so that local people could easily access bank loans.

Meanwhile, the State Bank will study and soon complete legal documents to deploy mobile money service in Viet Nam while making loans from microfinance institutions easily accessible to local people, then gradually limit black credit.

With a network of branches and transaction offices that have spread all over the country, the SBV has instructed credit institutions to diversify banking products and services, reduce interest rates and simplify lending procedures in order to facilitate people’s access to credit packages through official channels, Ha Thu Giang, Deputy Director of Department of Credit for Economic Sectors under the SBV said.

By the end of last year, the scale of Viet Nam’s consumer finance market came to around VND1.8 quadrillion (over $77.25 billion), accounting for over 20 per cent of outstanding loans in the economy, up 7.4 per cent compared to the end of 2019.

Pham Toan Vuong, Deputy General Director of Vietnam Bank for Agriculture and Rural Development (Agribank), said his bank’s outstanding loans to individual customers have continued to grow over past years, adding that in 2020, individual customers accessed nearly VND840 trillion worth of loans, a year-on-year increase of more than 7 per cent.

According to Nguyen Thanh Phuc, Deputy General Director of FE Credit, said the company currently has about 15 million customers, with new loan balance from VND4.5-7 trillion each month.

FE Credit - Viet Nam’s No1 consumer finance company - holds more than 50 per cent market share in its field and its customers are those who can not borrow from banks. That means the demand for consumer loans remains large, he said. — VNS

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