Statistics of the State Bank of Vietnam (SBV) showed that over the years, the total outstanding consumer loans in Vietnam grew at an average of nearly 20 percent per annum. As estimated, the ratio of consumer loans on total loans is 5.6%. the ratio of consumer loans on final consumption is 7.3 percent and the outstanding consumer loans per capita is approximately 1.5 million dong per person.
With traditional practices of many Vietnamese, families often spend more on consumer spending, from small purchases to large items such as home purchase, automobile purchase.
This is sufficient to increase the demand for consumer loans for end of the year shopping.
Many banking and financial experts said that from now to the Lunar New Year, people’s demand for consumer loans will increase by about 50-70 percent in the year. That is also an opportunity for banks to boost consumer lending.
At Vietnam Technological and Commercial Joint Stock Bank (Vietcombank), compared to two years ago, the ratio of outstanding loans of individual customers to total loans increased from 40 percent to 48%. Of the total outstanding retail loans of 99 trillion dong, home loans accounted for 82%, while automobile loans accounted for five percent and credit cards accounted for four percent.
At the end of the year, shopping demand increases, and many banks apply very attractive interest rates for consumer loans. For example, for automobile loans, Vietnam Prosperity Commercial Joint Stock Bank (VPBank) is offering a rate of 7.49 percent per annum, while the rate is from 7.6 percent per annum at Tien Phong Commercial Joint Stock Bank, from eight percent at Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), from 8.29 percent per annum at Vietnam Technological and Commercial Joint Stock Bank (Techcombank), etc.
Not only competing on interest rates, banks also offer a relatively high financing amount, reaching five billion dong. The loan rate can be up to 85 percent if customer mortgages by the automobile itself or 100 percent if customer mortgages by real estate assets. The maximum loan period is up to 96 months for new automobiles and 60 months for used ones.
Dr Can Van Luc, member of the National Financial and Monetary Policy Advisory Council said that the current consumer loan system is fairly diverse and has met more and more of the increasing demands of people. However, borrowers need to carefully understand the legal information of the lender before deciding to apply for a loan.
