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Management of consumer finance companies to be tightened
Monday,  Dec 25, 2017,21:14 (GMT+7)

Management of consumer finance companies to be tightened

HCMC – The State Bank of Vietnam (SBV) will closely monitor and inspect the operation of consumer finance companies to ensure a transparent and healthy consumer credit market.

Data of SBV shows consumer credit has grown strongly in Vietnam in recent years. The total amount of consumer credit has seen a six-fold increase since 2011 to VND960 trillion (about US$42.3 billion), accounting for 15.7% of total outstanding loans, Thanh Nien newspaper reports.

For finance companies alone, the total amount of consumer credit has increased 10 times since 2011 to VND74 trillion, making consumer credit the fastest growing segment with average outstanding loan growth rate of 40% per annum in the last three years.

According to a report of the National Financial Supervisory Commission, consumer loans will maintain the high growth momentum in the coming time. The country’s total outstanding consumer loans in the year to end-November had soared by an estimated 59% compared to end-2016.

Loans for purchasing and repairing apartments, and transferring residential land account for 52.9% of the total, up from 49.5% against late last year. Loans for buying home appliances make up 15.3% while car loans account for 8.3%.

At present, there are 16 consumer finance companies in Vietnam, including dominant players such as FE Credit and Home Credit.

Nguyen Tri Hieu, an economic specialist, said foreign investors have boosted investment into consumer credit in Vietnam. Therefore, SBV has decided to closely monitor consumer finance companies to ensure that they operate properly and comply with law.

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