Lending cap set for finance firms
HCMC - Finance companies will be allowed to lend a maximum of VND100 million (some US$4,405) to an individual customer from March 15 this year as required by the State Bank of Vietnam (SBV) in Circular 43/2016/TT-NHNN.
The circular, which was signed by the SBV’s governor, aims to better control lending activities at finance firms and protect the legitimate rights of borrowers. An individual can borrow a maximum of VND100 million at a finance firm to pay for goods and services including cars, home appliances, school tuition, medical treatment and tourism, and home repair.
The lending cap will not apply to the consumer credit used to buy an auto that is placed as collateral for the loan.
Finance firms are required to submit the lowest and highest interest rates for their consumer credit to the SBV for approval. The circular allows them to introduce their credit products at consumer goods stores and collect information about the borrowing demand of customers.
Finance firms have to issue internal principles on collection, update, inspection and management of client data, as well as application of effective measures to detect and prevent false information and fraud, control debts and ensure compliance.
The circular also states finance companies must clarify the deadlines for principal and interest payments, interest change, ways to collect debts and coping measures for overdue loans in lending contracts with customers. They should make clear points in the contracts when requested as well as publicize sample contracts and transaction conditions for consumer credit at their head offices and on websites.