Online lending has become more popular, but there is still no legal document and no agency supervising the business activity.
Duc Thanh, from Phu Nhuan district, HCM City, told reporters that he receives calls from LGC Finance Consultancy every week to invite him to borrow money.
Thu Lan from Binh Thanh district also said she is regularly bothered by calls from a company called Doctor Dong in HCM City, offering online loans.
Tens of other lenders have appeared, setting up their websites and running apps to connect borrowers.
Lan said she sought to borrow VND2 million via Doctor Dong, but she later changed her mind because the interest rate was 30 percent per month.
“Some people, introducing themselves as Doctor Dong’s officers, talked to me rudely, which really threatened me,” she said.
According to Can Van Luc, a renowned finance expert, the capital for lending is mostly regulatory capital of fintech, plus capital mobilised by fintechs from other institutions and individuals. To accelerate the cash flow circulation, fintechs try every possible way to lure customers to their lending service.
The number of online lenders is increasing so rapidly that it has caused concern to the Ministry of Public Security.
A representative of the ministry, at a recent conference discussing solutions to black credit, said many social problems have arisen from the online lending movement.
“Many individuals are not professional lenders, but still try to lend money online for profit. They borrow money from relatives and cooperate with fintechs to lend money. As borrowers cannot pay debts, the individuals cannot collect money to pay back the relatives,” he said.
The Ministry of Industry and Trade (MOIT) also voiced concern over the online lending boom. “Quick online borrowing’, ‘Loans without collaterals required’ and ‘Getting loans without meeting lenders’ are among the ads regularly seen on the internet.
China witnessed the collapse of a series of online lending models in the third quarter of 2018.
The State Bank (SBV) has warned that there are risks for involved parties in online lending transactions.
In principle, fintechs act as intermediaries which connect borrowers and lenders.
SBV said online lending is not covered by the Law on State Bank and the Law on Credit Institutions, because lending is not provided by credit institutions.
These are just transactions between institutions and individuals via apps. The agency is drafting a model for online lending. In the immediate time, SBV may allow some fintechs to provide services in a pilot programme.
“Quick online borrowing’, ‘Loans without collaterals required’ and ‘Getting loans without meeting lenders’ are among the ads regularly seen on the internet.
