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Consumer loans appeared in Vietnam in 1998 with the establishment of finance companies under state-owned enterprises. However, this sector has been booming over the last five years with the participation of numerous new firms.
At the end of 2017, Vietnam had 16 finance enterprises, the biggest players of which were FE Credit (around 50 per cent), Home Credit (17 per cent), Prudential Finance Vietnam, HD Saison, and Toyota Finance. The establishment of these companies along with the completion of the legal framework, the increasing demand for consumer loans, and the stable development of the economy enabled consumer credit to grow sharply.
According to data from the State Bank of Vietnam, consumer credit has increased by five times over the last five years. While in 2012 total outstanding consumer loans were around VND230 trillion ($10.1 billion), making up 8 per cent of the economy’s total outstanding loans, it hit approximately VND1.1 quadrillion ($48.5 billion) in 2017, 4.8 times higher than in 2012 and 17 per cent of the total outstanding loans.
The development of consumer credit is very useful for the economy as it has created ten thousand jobs, restricted black market credit, and helped develop a comprehensive finance system, strengthening production and consumption, contributing to economic growth.
However, this sector has only started booming recently, and credit organisations, management agencies, and consumers are still lacking experience in risk management.
In order to provide early detection and eliminate risks in the sector, enabling it to develop in the right direction and ensuring the safety of investors, borrowers, and the economy, tomorrow morning (May 22) VIR will organise a seminar in Hanoi titled “Consumer Finance: Safety Management for Investors and Consumers.”
The seminar will welcome a variety of speakers and panelists:
1. Truong Van Phuoc, acting president of the National Financial Supervision Council;
2. Nguyen Tu Anh, deputy head of the Monetary Policies Department at the State Bank of Vietnam;
3. Do Hoang Phong, CEO of the Credit Information Centre;
4. Can Van Luc, economist;
5. Nguyen Thuy Duong, deputy managing director of EY Vietnam;
6. Do Hoai Linh, lecturer at the National Economics University in Hanoi;
7. Nguyen Thanh Phuc, head of the Capital Raising Department at FE Credit;
8. Nguyen Dinh Duc, deputy CEO of HD Saison; and
9. Do Nguyen Van Anh, head of Business Transformation at Home Credit.