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However, only 18.5 percent of them borrow from financial institutions, which means that a large percentage of people borrow money from other sources, including ‘black credit’, relatives or unofficial channels.
The credit access levels vary for different groups of borrowers, depending on their age and income.
More than 48 percent of women have taken out loans, or 3.5 percent higher than men. Of these, 21 percent borrowed money from banks, 1.4 times higher than men.
More than 47 percent of older people have loans, higher than 3.7 percent than younger people. Only 3 percent of young people access credit from financial institutions, while the figure is 23 percent for older people.
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More than 48 percent of women have taken out loans, or 3.5 percent higher than men. Of these, 21 percent borrowed money from banks, 1.4 times higher than men. |
Nguyen Thi Hien, deputy head of the Banking Strategy Department, said that Vietnamese people’s habits have changed a lot, especially among youth.
They now tend to buy goods for their essential needs with borrowed money rather than with savings.
She pointed out that the change is one of the reasons causing credit to rise. According to the State Bank of Vietnam (SBV), the total consumer credit value is VND960 trillion, accounting for 15.7 percent of total outstanding loans.
An SBV report shows that outstanding loans from consumer finance companies remain modest, roughly VND74 trillion, or 8 percent. However, the consumer credit channel is booming with an outstanding loan growth rate of 40 percent per annum in the last three years.
“The difference in the groups of customers targeted by commercial banks and finance companies partially explains the rapid growth rate in finance companies’ outstanding loans,” Hien said.
Finance companies target clients aged 18-30 who have monthly income of VND5-10 million. Meanwhile, bank clients have average age of 31-40 and income of VND10-20 million.
Commenting about the prospects of consumer credit, McKinsey & Company’s Reet Chaudhuri said there are still great opportunities as people may borrow from banks and financial companies instead of unofficial channels or relatives.
The government’s policies on building houses for low income earners will also encourage people to access consumer loans. He said he hopes consumer credit will have the growth rate of 25-30 percent in the next five years.
Deputy director of the SBV’s legal department Ta Quang Don said the demand for consumer loans remains very high and the market has not been fully exploited.
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