Both finance companies and banks are promoting consumer lending to capitalise on high demands ahead of the country’s largest holiday Lunar New Year (Tet).

Tien Phong Joint Stock Commercial Bank (TPBank) has just launched a ‘super speed’ auto loan programme, with a commitment to approve loan appraisals within eight hours. Customers can borrow up to 80 per cent of the value of a car over 84 months.

Vietnam Technological and Commercial Joint Stock Bank (Techcombank) is applying an unsecured loan programme, requiring no collateral or deposits. Under the programme, borrowers can get loans at a maximum amount of 10 times of their monthly income, but not exceeding VND300 million (US$12,880).

Foreign banks, such as Shinhan Bank and Standard Chartered Vietnam are also boosting consumer lending.

At Shinhan Bank, customers can get loans of 10-12 times of their salary over 36 months, providing their salaries are paid into the bank. The South Korean bank is offering interests rate of 19-23 per cent per year.

Standard Chartered Bank Vietnam is offering loans of up to VND900 million over 12-60 months. To qualify for loans, borrowers must have a monthly minimum after-tax income of at least VND10 million.

Finance company HD Saison is also offering loans for customers to buy motorbikes before Tet.

According to the National Financial Supervisory Commission, Viet Nam’s consumer lending had recorded strong growth in recent years, from 50.2 per cent in 2016 to 65 per cent in 2017. The ratio of consumer loans out of the country’s total outstanding loans also increased from 12.3 per cent in 2016 to 18 per cent in 2017.

The numbers for 2018 have yet to be released, but Nguyen Mai Long, CEO of EVN Finance’s Easy Credit, said consumer lending still contributed a significant proportion to the banks’ profits.

Long forecast demands for consumer finance would remain high in 2019, given efforts to stimulate consumption among both producers and consumer finance lenders amid rising incomes.

Long estimated consumer finance companies had opportunities to provide loans for potential customers, who account for about 48 per cent of Viet Nam’s 95 million population. — VNS