financial companies are rushing to cash in on this market, say industry
insiders.
Statistics show that Vietnam is now
home to 17 financial companies, which have been established by domestic
and foreign-invested groups and corporations. These financial companies
provide loans enabling consumers to buy cars and houses, similar to
services provided by the banks.
To improve their
competitiveness, financial firms have continuously released new products
onto the market, based on the business advantages of their parent
companies, expanded their limits on loans, adjusted deadlines for
payments and linked up with the suppliers of consumer goods to serve
their clients better.
For this reason, a large
number of consumers prefer the products provided by financial companies,
although their interest rates are 1.2-1.7 percent higher than those
offered by the banks.
The Prudential Finance
Company, an arm of the Prudential Insurance Group, is well known for its
loans without collateral, based on valid insurance policies. The limit
and duration of the loans are directly proportional to the value and
period of the insurance policies. The company also provides its product
online and by telephone to save time and transaction costs for clients.
Credit for house buyers provided by the PetroVietnam
Finance Corporation (PVFC) is seen as safer than similar products
provided by the banks. When clients sign a loan contract, they also sign
an insurance policy with the life insurance company ACE Life, to keep
ownership of the mortgaged assets. If there are defaults, ACE Life will
pay the remainder of the loan to PVFC.
For the
Hadico Financial Company, under the Hanoi Housing Development and
Investment Corporation, a repayment period of up to 30 years is an
advantage for its loans for house purchases.
Foreign-invested financial firms are also emerging as big rivals to the
banks. Boasting global networks, these companies have teamed up with
major producers to offer consumers non-profit loans to boost
consumption.
Many major banks, including the Asian
Commercial Bank (ACB), the Sai Gon Thuong Tin Commercial Bank
(Sacombank) and the Dong A Bank (DongABank) plan to set up financial
companies to tap into the personal credit market, but none of them have
begun to operate yet.
A number of other banks have
also unveiled their plans to put capital into multinational financial
firms to improve their competitiveness in the personal credit market./.
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