Outstanding consumer loans in Vietnam hit $15.12 billion at the end of 2015, increasing 44% from a year earlier, marking the sharpest growth over the past five years, according to a report by financial information provider StoxPlus.
As of the end of 2015, outstanding consumer loans in the country were equivalent to 10.4% of gross domestic product (GDP), higher than 8.2% in 2014. The loans accounted for 6.8% of total credit, compared with a ratio of 5.6% a year earlier.
The fast expansion of consumer lending in Vietnam stemmed from the change in habit of consumers and middle-income earners’ higher demand for home loans, according to StoxPlus.
The consumer loan providers in Vietnam are facing fiercer competition with a strong increase of newcomers. Local banks acquired a larger number of financial companies or set up consumer lending arms last year.
Financial firms, including FE Credit, Home Credit, HD Saison and ACS, are spending more on bonus or promotions to gain a foothold at mobile device retailers such as Mobile World and FPT Shop.
2015 also witnessed a boom of financial technology (FinTech) companies like e-wallet Momo, Payoo, BankPlus and 123Pay, which have heated up competition in this market, said the report.
According to statistics of the State Bank of Vietnam, 16 financial companies were operating in Vietnam at the end of 2015, including four wholly foreign-invested ones namely Mirae Asset (Vietnam), Home Credit Vietnam, Prudential Vietnam, and Toyota Vietnam Finance.