May 28 2024


Vietnam Consumer Finance Report 2024

Total Page:

44 Pages




Financial Service


within 1 day(s)

75.600.000 VND

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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:

  • How did the consumer finance sector perform regarding credit growth in 2023, and what is the outlook for 2024?
  • What is the market size of Vietnam's consumer finance sector, specifically among mainstream credit providers (i.e., credit institutions) and consumer finance companies (FinCos)?
  • What is the growth potential of Vietnam's consumer finance market compared to its regional peers in APAC?
  • How has the competitive landscape evolved over the past five years, and what can be expected moving forward?
  • How has the product mix of FinCos changed in the post-pandemic period, and what trends are anticipated?
  • What are current consumer sentiments and perceptions regarding consumer finance and FinCos?
  • How have the financial and operational performances of major FinCos changed over the past year, and what insights can be drawn from the market?
  • What emerging challenges and opportunities exist for incumbents and foreign investors?
  • What are the latest key market and development trends to monitor?
  • What are the recent regulatory developments and their implications?

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:

  • Subdued credit appetite, leading to reduced interest income among FinCos.​
  • Weakened borrower repayment capacity,resulting in FinCo’s high NPLs and elevated provisions for loan losses.
  • Challenges in debt recovery: The failure of some FinCos, pawnshops, and unlicensed lenders to adhere to debt collection regulations prompts scrutiny from local authorities, heightening challenges in collection practices and causing adverse psychological effects on borrowers

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:

  • Improving customer outreach & acquisition touchpoints
  • Product portfolio diversification
  • Credit risk management with focusing on enhancing customer base & analytics
  • Changing customer perception of consumer finance market & FinCos





Executive Summary



Updates of Vietnam Consumer Finance market in 2023



Market size & growth



Market segmentation



Transition in product portfolio of active FinCos (sector level)



Competitive landscape of Finance Companies (FinCos)



Credit growth & market share of FinCos



Analysis of FinCos’ financial performance



Key development trend



Regulatory update (review of latest legal documents that matter to the CF market)


Tags: Consumer Finance, 2024, CF, CF Market, FinCos, M&A, Digital transformation, COVID-19, pandemic, installment loans, Cash loans, Credit card, Loan card, Cash card, BNPL, buy now pay later, slow credit growth, 2W, 2WLs, Vehicles loans, Consumer Durables, CDL

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