ANTD.VN - Illegal lending, using technology and spreading online, "disguised" as consumer loan apps, has severely impacted the operations of consumer finance companies and disrupted social order and security.
Small loan, big consequences.
According to Major Nguyen Ngoc Son, Deputy Head of Department 6, Criminal Police Department, Ministry of Public Security , in the fourth year of implementing Directive No. 12/CT-TTg of the Prime Minister on strengthening prevention and combating crimes and violations of the law related to "loan sharking" activities, the police force has prosecuted 89 cases and 434 defendants involved in loan sharking activities.
These include numerous gangs or groups involved in high-tech activities, some of which are established by foreigners who use them as fronts, employing Vietnamese people to work in independent departments and attracting borrowers to disburse funds through payment gateways.
Based on the assessment, the situation of illegal lending is emerging in three ways: Firstly, traditional methods (distributing flyers, posting advertisements online) have decreased but still exist.
The second method involves operating under the guise of pawn shops combined with high technology. And the third is using technology to create websites and applications (apps) that use names and logos very similar to licensed banks and consumer finance companies.
In addition, recently, some groups have emerged that operate under the guise of law firms or financial services companies to buy and sell debts, then make threatening phone calls to extort money.
"Loan sharks are increasing their mobile operations, committing crimes in many areas, thoroughly exploiting technology, social media, applications, websites... to distribute leaflets and advertisements to solicit loans, especially targeting households, small businesses, low-income workers, factory workers, and young people...", Major Nguyen Ngoc Son informed.
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With the explosion of online consumer loan apps, people don't know which are real and which are fake. |
According to a representative from the Ministry of Public Security, loans through these apps may seem very small, with many loans ranging from only 1.6 to 3 million VND, and the initial interest rates appear low, but when various fees are added, they can reach thousands of percent.
Furthermore, when borrowing through these apps, borrowers are required to provide personal information and phone contacts as collateral, leading to information leaks that allow perpetrators to use intimidation and debt collection activities that violate the law.
When customers need to borrow more, they are lured by these individuals into using one app after another, resulting in them having to repay very large sums of money even for very small loans.
According to Major Nguyen Ngoc Son, in the coming period, the economic situation will remain difficult, especially during the Tet holiday season, when loan sharking crimes will intensify, leading to violations of the law related to illegal debt collection and potentially an increase in serious cases.
Expanding formal credit and linking population data to combat illegal lending.
According to the latest data from the State Bank of Vietnam, as of July 31, 2023, outstanding loans for living expenses reached VND 2.6 trillion, an increase of 2.93% compared to the end of 2022, accounting for 21.31% of the total outstanding loans in the economy. Compared to the 22% increase for the whole of 2022, the 2.93% figure for the first seven months of this year is quite modest.
The above figures show that the consumer lending market in Vietnam still has a lot of potential for development, as the demand for consumer loans among the people is very high. This is also the reason why illegal lending has boomed recently.
Conversely, illegal lending is also severely impacting the operations of consumer finance companies. According to Mr. Nguyen Quoc Hung, Vice Chairman of the Vietnam Banking Association, recently, some individuals have taken advantage of the authorities' crackdown on illegal lending crimes and deliberately falsely accused consumer finance companies licensed by the State Bank of Vietnam of being illegal lending organizations, thus failing to repay debts and forming debt default groups on Zalo, Facebook, etc.
This, coupled with the overall economic difficulties, has led to a significant increase in the non-performing loan ratio of financial companies, from around 5% last year to 7-8%, with some businesses reaching as high as 20%.
Lawyer Nguyen The Truyen from Thien Thanh Law Firm also believes that nowadays, borrowers are aware that loan apps with exorbitant interest rates never dare to visit the debtor's home, only making threatening phone calls, which leads to the mentality of "defaulting on debt." Therefore, if illegal lending is eliminated, it will also reduce the rate of defaulting on debt.
To combat illegal lending, Major Nguyen Ngoc Son suggested that the banking sector strengthen its public awareness campaigns to help people identify fake websites and applications impersonating banks and consumer lending companies.
Closely coordinate with the police force to promptly implement the verification of borrower information based on population data, in order to ensure that people do not falsify information to obtain credit and avoid intentionally evading debt repayment responsibilities.
In addition, it is necessary to promptly implement preferential loans without collateral based on verified population data; and to provide the Ministry of Public Security with information on crimes related to illegal lending that the banking sector detects for handling, especially acts that affect credit operations…
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