A number of finance companies have restructured to jump into the consumer lending sector. 

Cement Finance JSC changed its name to VietCredit Finance Company, while EVN Finance started a personnel recruitment plan.

These are finance companies established many years ago, belonging to state-owned economic groups. They have undergone reshuffling and are now seeking profits from consumer lending.

Commercial banks have also jumped on the bandwagon. SeABank recently acquired the entire capital contribution by VNPT to Post Finance. SHB’s finance company is expected to make a debut soon.

Vietcombank, ACB and OCB have also showed their desire to join the consumer lending market.

FE Credit, a subsidiary of VP Bank, HD Saison, where HD bank holds 51 percent of share, and Home Credit are the best known consumer lenders in the market.

Analysts said Vietnamese finance companies are dominating the consumer lending market, while Home Credit is leading foreign lenders as it has been in the market for a long time. 

However, the situation may change in the future once more capable companies join the market.

Earlier this year, Shinhan Bank took over Prudential finance company at $151 million. Lotte from South Korea bought Techcom Finance from Techcombank in a deal worth VND1.7 trillion.

The institutions, financially powerful with plentiful capital from holding companies, see Vietnam as a promising market.

Finance companies have all reported satisfactory business results. 

FE Credit, for example, reported a 45 percent increase in revenue in 2017, and 55 percent increase in profit. Home Credit reported turnover increasing by 50 percent. HD Saison reported outstanding loans of VND9.5 trillion, up by 17.3 percent.

Meanwhile, Mcredit, a joint venture between Military Bank and Shinshei Bank from Japan, made profits right in the first year of operation with outstanding loans reaching VND1.549 trillion last year. 

According to the National Finance Supervision Council, consumer lending in 2017 grew by 65 percent, much higher than the 50.2 percent the year before. Consumer credit accounted for 18 percent of total credit, higher than the 12.3 percent a year before.

About 48 percent of the population which has low income (less than $300 a month) are potential clients of consumer lenders, according to StoxPlus, a finance analysis firm.

It is estimated that the consumer lending market value is VND1,100 trillion, or $48.5 billion.

Kalidas Ghose, CEO of FE Credit, is optimistic about the market, saying that the ratio of consumer lending to total outstanding loans in Vietnam is 11.4 percent, much lower than the 40-50 percent in developed countries.

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