Workshop discusses measures for healthy consumer financial market in Vietnam

The Investor will hold a seminar on Tuesday to assess Vietnam's current consumer financial market landscape and examine solutions for its healthy development.

The Hanoi event will aim to help raise awareness among the general public and businesses in a market of 100 million people.

The large market, with an average age of 33.7, is considered to have huge potential for the consumer finance industry. In recent years, along with the development of the economy and science and technology, the consumer finance market has explosed with diversified services.

To date, 16 consumer finance companies have been licensed by the State Bank of Vietnam, governed by the Law on Credit Institutions. Borrowers tend to be unbanked and underbanked people who find it hard to access to bank loans.

As of December 31, 2022, the total outstanding loans of the 16 companies had exceeded VND220 trillion ($8.52 billion), accounting for 1.87% of the total outstanding loans in the whole economy and 8.5% of consumer loans in the entiree financial system.

Besides, the market also has other players like private pawn brokerages, fintech companies and financial companies. They are governed by the Civil Code and the Law on Investment of 2020.

Recently, Vietnamese authorities have detected organizations and individuals that may have infringed on lending and debt collection rules. Several consumer finance firms in the market have been facing many difficulties and obstacles due to shortcomings in the legal system. Therefore, the seminar is expected to help the market develop in a more healthy and sustainable manner.

The participants will include representatives of the National Assembly Economic Committee; the National Assembly Law Committee; units under the Ministry of Public Security, Ministry of Planning and Investment, Ministry of Justice; the State Bank of Vietnam, the Vietnam Banks Association (VNBA), legal experts, and consumer finance businesses.