October 21 2022


Consumer Finance in Vietnam FIRST-HALF 2022 REVIEW

Total Page:

44 Pages




Financial Service


within 1 day(s)

48.950.000 VND

USD 2,000.0

The consumer finance market has suffered severe setbacks with the pandemic from approaching new-to-bank customers to collecting debts from existing customers. The country's economy has transitioned to a new normal, and commercial and service activities have almost entirely resumed, boosting consumer credit demand. FinCos were generally on the mend and ramping operations by late 2021 but had not yet fully regained their pre-pandemic growth momentum. FinCos portfolio is driven by unsecured loans and low-income customers and hurt more in the pandemic, hence takes longer time to recover fully.

Going forward, the CF market is poised for a strong recovery by the end of 2022 thanks to the peak season effects and extension of credit growth quota for some banks and FinCos as announced by SBV by early September.


Loan book growth

1H2022 period of growth set the CF portfolio of both banks and FinCos on a path to recovery. The resumption is backed by solid consumer credit demand that bounced back since October last year when business operations and service activities turned normal.

The recovery stories are different among FinCos. The key lies in tapping into the right customers. Also, companies with moderate NPL levels in 2021 tend to have larger space to boost new loans in 2H2022 when the pandemic is behind.  

Market share

COVID is a game changer that drove the competition fierce than ever before. 1H2022 also saw some distribution of market share of companies in the top 4 and Mcredit keeps threatening the top 2 with spectacular growth regardless of COVID headwinds. Small FinCos also get the point to recoup quickly after the pandemic. Easy Credit attained 3-digit growth, offers loans via ViettelPost app with fully online journey. PTFinance also promises growth potential in the time to come by putting more efforts into digitalization.

Product composition

Cash loan share has been narrowed down in loan portfolio of major FinCos as a result of their initiatives in compliance with Circular 18/2019. CF players have taken initiatives to increase the proportion of loans with indirect disbursements (CDL, 2WL, credit cards, etc.). Vehicle loans and consumer durable loans acquired 1.1ppt and 0.3ppt of market share in 6 months driven by both supportive demand and supply sides: (1) Demand recovered post-pandemic, especially for consumer discretionary goods. Meanwhile, Credit cards continued to reveal potential thanks, gaining 3.5ppt thanks to cross-selling between products employed as a typical strategy by FinCos to grow this market segment: 1. Selling conventional products (CDL, 2WL, 4WL) at the first touch point and then offering cash loans or credit cards to existing customers with good credit history.

Liquidity and funding

Banks and FinCos are facing increasing costs of funding due to the liquidity crunch on most of funding channels. In market I, for the first time in many years, Credit growth outstripped the growth of customer deposit growth by 2.6 times for the fact that credit institutions accelerated lending to capture huge demand since business operations and consumer spending has recovered. Meanwhile, in the second the interbank rate climbed to a 10-year record high following a series of SBV intervention to control VND liquidity to stabilize foreign exchange rate and inflation amid the escalation of USD in the international market. In other words, cost of funds will be higher for banks and FinCos as they must raise deposit rates to attract funds for facilitating high credit demand in the time to come.

Earnings quality and profitability

Sector average NIM of active FinCos slightly reverted in response to the improvement of interest income growth in the proportion of loan growth, especially from some players such as Home Credit, Mcredit and HD Saison. However, FinCos are facing rising funding cost due to a liquidity shortage in the banking system as addressed earlier, which might negatively impact on interest margin from the second half of the year

Asset quality

FinCos’ NPL ratios remained at high level as of June 2022. As the pandemic and its effects continued to cascade through 2022, many consumers have never faced unemployment and reduced income which challenged their affordability for debt repayment. Going forward, asset quality of FinCos is expected to get better in the coming time along with strong credit growth and recovered debt repayment capacity of borrowers. However, given such deterioration, it will take some quarters or even a year for FinCos' customer portfolio of subprime borrowers to recuperate to pre-pandemic asset quality level.

Key development trends

The CF sector has been widely voiced with some key developments that drive the market in the upcoming time:

  • Buy now, pay later is poised to thrive as a new customer acquisition & retention channel
  • Pawnshops' activities flourished posing fierce competition to mainstream CF providers
  • M&A may heat up again with potential targets




Executive Summary



Updates of Vietnam consumer finance market



Market size and growth



Market segmentation



Competitive landscape of Finance Companies (FinCos)



Changes in market positioning



Update on product portfolio development



Analysis of FinCos’ financial performance



Key themes in the consumer finance sector



Buy now pay later (BNPL) model and its disruptions in the consumer finance market



Pawnshop model and its impact on the mainstream consumer finance segment



Update of M&A opportunities



Key regulatory changes



Tags: Consumer Finance, CF, CF Market, FinCos, COVID-19, pandemic, installment loans, Cash loans, Credit card, Loan card, Cash card, BNPL, buy now pay later, 2W, 2WLs, Vehicles loans, Consumer Durables, CDLs, market share, key players, loan book, YoY growth, NP

Expert Assistance & More Information

Our expert will help you find what you need. Contact our Customer Support for more information:

Hanoi Head Office:

Monday – Friday, from 8:30 to 18:00 Vietnam Time

Ho Chi Minh Office

Monday – Friday, from 8:30 to 18:00 Vietnam Time

Related Reports

Vietnam Credit Card Market Report 2024

May 23 2024


67 pages

Vietnam's credit card market is on a solid growth trajectory, indicating promising prospects for expansion driven by factors such as the current low penetration rate, government endorsement of cashless payments, and a thriving E-commerce sector. As the market evolves, upcoming trends like the surge in contactless payments, virtual credit cards, and the embrace of Buy Now Pay Later financing are poised to shape the future landscape of credit card usage in Vietnam.

Vietnam Consumer Finance Market Survey Report

April 23 2024


86 pages

FiinGroup’s consumer finance survey 2024 provides insights into the recent status of major FinCos FE credit, Home Credit, HD Saison, Mcredit, Shinhan Finance and Mirae Asset and CF products, key product offerings, and features such as interest rate, credit limit, customer journey including procedures and turnaround time, customers experience, customer’s perspective on consumer loans and consumer credit providers, key factors driving customer decisions, customer profiles (demographics and recently status).

Vietnam M&A Report 2024

February 27 2024


45 pages

In 2023, FiinGroup recorded 220 M&A transactions worth US$5 billion, reflecting a 33% decline from the previous year. Inbound” M&A dominated the market, comprising 80.9% of the total deal value in 2023 thanks to the aggressive acquisition from Japan, Singapore, and Malaysia investors. Domestic transactions accounted for just 15.8% of the total deal value, marking a significant decrease from the 65% proportion observed in 2022, This decline can be chiefly attributed to the challenging conditions in the macro-economic context, stringent regulatio

Stay in the known with our newsletters