Home Credit champions ESG standards

Home Credit Vietnam has maintained environmental, social and governance (ESG) standards as part of its business philosophy amid pandemic-induced depleted consumption.

The leading consumer finance company in the country has achieved encouraging results while the Covid-19 pandemic hit business activities over the past two years. It has gained about 300,000 new customers each month, maintaining a bad debt threshold below 3% as required by the State Bank of Vietnam.

“Sustainability has always been integral to our approach, and the pandemic proved that our commitment is more than words. It’s intrinsic to how we work with our customers, people, communities, partners and shareholders,” Home Credit Vietnam CEO Annica Witschard said.

Taking advantage of mobile applications, the company has made it convenient for customers to register for, pay for and track loans. Big data, in-depth analysis and artificial intelligence are being utilized to help assess credit risks, opening up many opportunities for consumers to access financial services and creating favorable conditions for retail partners to increase sales.

The automatic voice consulting system serves as an effective 24/7 support tool to improve work efficiency. Registering for the online credit card takes about 30 minutes, increasing the convenience of online shopping. These newly launched products helped Home Credit win several awards in 2021.

Prolonged social distancing in 2021 made life harder for people. Therefore, Home Credit has adjusted interest rates to ease financial pressure on households and individuals. In addition, adjusted loan repayment terms have helped its customers better cope with hardship.

“Home Credit is one of the pioneers in ESG standards in Vietnam’s consumer finance industry. We were able to organize timely and effective community support activities, especially during the recent Covid-19 surges,” said Witschard.

In 2022, the consumer finance firm will continue to expand its ESG activities by consolidating key performance indicators for these standards and fostering financial literacy through many activities, including collaborating with Vietnam Television to continue to air the "Smart Money, Wise Money" series on financial literacy; consulting and providing solutions for other social projects; and supporting women in deprived areas to start their own businesses. An ESG report will be published for each Home Credit country market, including Vietnam.

Studies by HSBC, Kantar Vietnam and Nielsen IQ Vietnam concur that Vietnam’s young labour market will greatly affect consumption in 2022. This will require financial firms to apply new technologies and build a financial ecosystem to adapt to increasingly competitive pressures, as more fintech firms or peer-to-peer lending platforms emerge.