May 28 2024
FiinResearch
Vietnam Consumer Finance Report 2024
Total Page:
44 Pages
Format:
Topic:
Financial Service
Delivery:
within 1 day(s)
75.600.000
VND
USD
3,000.0
Vietnam's consumer finance market faced its most challenging year in a decade, impacted by economic slowdowns and adverse credit conditions. Both banks and FinCos endured sluggish credit growth due to multiple challenges, including subdued credit demand, deteriorating borrower credit quality, rising delinquency rates, and the resulting stricter lending practices. Additionally, heavy provisioning weighed on profitability.
Staying ahead of trends in consumer lending is crucial as the market enters a new growth cycle following a prolonged adjustment period. FiinGroup’s latest consumer finance report provide readers with the latest developments in the sector and insights on individual players.
This report addresses the following questions:
Below is a summary of key findings from the report.
Growth is not a headline in 2023 and even in 1H2024
Finance companies’ (FinCos) primary clientele has been severely impacted by the downturn in labour-intensive industries, particularly manufacturing and export sectors. Reported figures for 2023 show that FinCos' loan portfolios shrank by over 9% year-over-year.
The beginning of 2024 signals the initiation of a new phase in credit growth, characterised by a more cautious approach compared to the pre-pandemic period. The environment now prioritises stable and healthy growth over aggressive credit expansion. Notably, some leading FinCos are undergoing business restructuring, creating favourable opportunities for other FinCos to emerge in 2024
Competitive landscape: from a concentrated to a dynamic and diversified market
Vietnam’s consumer finance market is becoming increasingly fragmented amid post-COVID economic challenges. Small and mid-sized FinCos now have a great opportunity to thrive as some leading players have entered a period of restructuring and revising business strategies.
FinCos' asset and earnings quality should be closely monitored amid economic uncertainties
The aftermath of slow economic growth post-Covid adversely impacted finance companies (FinCos), resulting in their business performance reaching its lowest point in 2023. FinCo’s net interest margin (NIM) and profit plummeted, driven by sluggish credit income growth and debt recovery. Contributing factors include:
FinCos are set to address three main issues to adapt and thrive: regaining growth momentum, refining the loan portfolio, and reviving reputation.
Therefore, business strategies are expected to focus on:
PART |
CONTENT |
PAGE |
Executive Summary |
||
1. |
Updates of Vietnam Consumer Finance market in 2023 |
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1.1. |
Market size & growth |
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1.2. |
Market segmentation |
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1.3. |
Transition in product portfolio of active FinCos (sector level) |
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2. |
Competitive landscape of Finance Companies (FinCos) |
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2.1. |
Credit growth & market share of FinCos |
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2.2. |
Analysis of FinCos’ financial performance |
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3. |
Key development trend |
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4. |
Regulatory update (review of latest legal documents that matter to the CF market) |
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