FE CREDIT is deploying a consumer loan package for workers in many provinces and cities.

Most workers lack the financial backup needed to cover unexpected risks in life, and often do not have assets to pawn and so depend on unsecured loans to meet urgent needs.

But if they were to go to financial institutions to borrow, the appraisal process, disbursement and others take a lot of time.

Besides, they reject many loan applications for reasons like insufficient income, lack of documents or poor credit score, meaning loan sharks are the only resort for many workers during emergencies.

“Workers like us can only save money to use when our children get sick or send home to our families if we work overtime," Ngân Khánh of Sóc Trăng, who works in the Tân Tạo Industrial Park in HCM City, says.

“But now there is no overtime work, and so I have to borrow for immediate needs.”

Quang Anh, a worker at Shyang Hung Cheng Company in Bình Dương Province, is burdened with a debt of VNĐ35 million (US$1,480) at a high interest rate.

Every month most of his salary goes towards paying the interest. After he delayed interest payment once, he was threatened by the creditors.

In fact, many workers fall into extreme serious situations when they deal with loan sharks. Flexible and large financial and non-financial packages are needed to prevent workers from tangling with shark loans.

More practical solutions for employees

Last year the State Bank of Vietnam directed two consumer finance companies, FE CREDIT and HD Saison, to coordinate with the Vietnam General Confederation of Labour to roll out an unsecured consumer loan package of VNĐ20 trillion ($846 million) at preferential interest rates for workers across the country.

Under the programme, employees can obtain unsecured loans of up to VNĐ70 million ($2,961) at 50 per cent of the current interest rates from the two reputed consumer finance companies.

The programme has been taken directly to industrial parks with the support of trade unions to make it accessible to workers.

At conferences held in Hà Nội, HCM City and Đà Nẵng to evaluate the first year results of the "Preferential unsecured loan package of VNĐ20 trillion," leaders of grassroots trade unions spoke about its great benefits to workers.

They said many workers, when in need of money, approach informal lending sources, private lenders and loan sharks due to their simple procedures and quick disbursement.

But many then can’t manage the monthly repayment due to the sky-high interest rates, leading to spiralling debts, and they are threatened by creditors when they fail to pay the debt.

On the other hand, mainstream consumer finance companies like FE CREDIT help workers calculate and set up a monthly loan payment schedule that matches their earnings, thereby addressing their personal and family financial needs.

This is the first time in the Vietnam's consumer finance market there is a big unsecured loan package and with the lowest interest rates ever exclusively for workers.

Relevant authorities are devoting all their efforts to implement it.

Nguyễn Hữu Ái, sales director of FE CREDIT, said the economic downturn has adversely affected businesses, and many have laid off employees.

“Currently, many workers are underemployed, and their income is reduced, and even jobless. Therefore, the preferential loan package of VNĐ20 trillion with the interest rate at 50 per cent of the market level will be of practical benefit ​​and help solve workers’ difficulties.”

After nine months of implementation of the package, FE CREDIT has given loans at only 50 per cent of the normal interest rate to nearly 65,000 union members and employees.

FE CREDIT plans to soon complete the signing of MoUs with the labour confederations of all 63 provinces and cities in the country to speed up the VNĐ10 billion lending package.

It will also discuss with grassroots trade unions how to deploy financial products and services to enable the lending package to reach workers in a timely manner.

To make it easier for workers, FE CREDIT has also adjusted its loan process to suit the programme.

And through its capable workforce, workers will get direct consultancy and can register for suitable loan products right at the industrial park or export processing zone they work.

In addition to traditional loan products, FE CREDIT has also launched credit cards with preferential interest rates to meet the needs of workers.

Source: VNS