Forming the habit of "borrowing civilly, paying civilly"

Economist , Dr. NGUYEN TRI HIEU :

There should be a consumer debt trading floor.

Vietnam currently has a corporate debt trading market managed by the Vietnam Asset Management Company (VAMC) and its own debt trading floor. Meanwhile, consumer loans still do not have a debt trading floor.

Therefore, it is recommended that the State Bank should have a direction to open a consumer loan trading floor. The problem is how to have an intermediary company to be able to "package" small loan packages from 1 or more commercial banks and financial companies to put on the floor; how to make the transfer of mortgaged assets more convenient and easier. In addition, financial education should be provided to everyone through mass programs, providing basic financial knowledge so that people understand why they have to open an account at a bank, what is black credit, why they need mortgaged assets when borrowing capital...

Mr. NGUYEN VAN DUNG , Deputy Director of State Bank of Vietnam , Ho Chi Minh City Branch:

Strengthening coordination of multiple solutions

To effectively support the development of consumer credit, contribute to limiting black credit and shortcomings in lending and debt collection, many synchronous solutions are needed in terms of information, propaganda, etc. Credit institutions need to strengthen coordination with agencies, departments and sectors to promptly grasp economic crimes in banking activities, information on methods and tricks of usury.

For the Ho Chi Minh City Police, it is recommended to strengthen inter-sectoral inspection activities in the field of consumer lending, especially with businesses providing pawn services, financial business, illegal debt collection, legal consulting activities (in fact, debt collection for hire, which has been identified through the results of the work of the State Bank of Vietnam, Ho Chi Minh City Branch with financial companies in recent times). Regularly review and monitor applications (apps) for handling; coordinate with the State Bank of Vietnam, Ho Chi Minh City Branch to provide information, customer account status, information on loan sharking methods and tricks.

Ms. NGUYEN HOANG BAO TRAN - National Assembly Delegate, Vice President of Binh Duong Provincial Labor Federation:

Bring issues to the National Assembly

During the 3rd session of the 15th National Assembly, when the impact of the COVID-19 pandemic caused many difficulties for credit borrowers, I questioned the Governor of the State Bank and was informed that this agency had issued many instructions to commercial banks to lend to support workers and businesses. Any content that is practical for workers, including consumer credit, we discussed with the parliament to have the highest common support.

In fact, regarding the propaganda of using finance in a smart and flexible way, the Trade Union has implemented it in the past. As for how to make it easier for workers to access these loans, more practically, it is necessary to create conditions for financial units. No one thinks that consumer loans will become bad debts. Anyone who borrows wants to pay off their debts. If the interest rate is too high or the forms of loans are too difficult, workers will not be able to access them or if they borrow and cannot pay back, they will turn to bad things. Therefore, let's look at workers with a supportive perspective to promote the sustainable development of the consumer finance market.

Ms. VU THE VAN , Chairman of the Trade Union of Ho Chi Minh City Export Processing and Industrial Zones (Hepza):

To make it easier for workers to access consumer loans

The discussion topic of the Lao Dong Newspaper is very practical in the current period for us, the people in charge of the Trade Union. Currently, Ho Chi Minh City has nearly 300,000 workers in 17 industrial parks and export processing zones, most of whom are immigrants, more than 70% of whom have to rent houses. After 2 years of the COVID-19 pandemic, along with the general difficulties of the whole country, workers have had more difficulties. In the current period, when businesses have reduced orders and reduced production, workers have had even more difficulties. The typical characteristic of workers is that their salary is very low, only 5.5-15 million/month but they have to worry about rent, school fees, and kindergarten for their children. Therefore, they really need money to cover their living expenses.

CEP Microfinance Organization has accompanied 12 branches in 17 EPZs and IPs to lend to workers with preferential interest rates and simple procedures, but only to a certain extent. We wish to accompany financial organizations to make it easier for workers to access consumer loans with reasonable interest rates to stabilize their lives.

Mr. HOANG VAN THANH - Chairman of the Board of Members of CEP Microfinance Organization:

Financial literacy support for borrowers

CEP is a non-profit microfinance organization owned by the Ho Chi Minh City Labor Federation. CEP is focusing on supporting 391,550 households of workers, poor laborers, and low-income people through providing practical and effective financial and non-financial services.

Currently, people's demand for capital is very large. Loan sources are also very diverse, including "uncivilized" lending sources such as black credit. For workers and laborers with low incomes, when accessing high-interest capital sources, the debt burden is too large, they easily lose the ability to repay the debt. To form the habit of "civilized borrowing, civilized repayment", propaganda, full information, and financial knowledge support for borrowers are very necessary, especially information about interest rates, credit contracts, etc.

CEP has stepped up coordination with Trade Unions at all levels to disseminate measures to prevent black credit; support financial knowledge and introduce CEP's activities to workers and laborers on digital platforms. We have planned and committed from 2023 to 2028 to support 1.4 million workers and workers' households to access loans from CEP with a total loan turnover of VND 50,059 billion; 194,770 workers benefit from CEP community development activities with a total budget of VND 60 billion...

Mr. NGUYEN HOANG MINH , Chief Representative of Vietnam Banks Association in Ho Chi Minh City:

Improving debt collection culture

I highly appreciate the discussion topic of Nguoi Lao Dong Newspaper in the current context. The Vietnam Banking Association in Ho Chi Minh City has just received reports from 10/12 members. The report shows that the members have implemented and complied quite properly with the regulations on consumer lending.

However, 7/10 financial companies reported that they have been inspected by the authorities and there is currently no conclusion. The whole country has 16 companies licensed by the State Bank while there are many unlicensed apps, affecting legitimate companies, causing them to be equated, misunderstood, and have their brands affected. Even legal consumer finance companies, licensed for management, are being equated with black credit.

In order for the consumer lending market to grow again and limit illegal credit, it is necessary to strengthen propaganda solutions to avoid customers confusing legal consumer finance companies with illegal companies. The State Bank needs to publish a list of licensed consumer credit companies so that people have a better understanding. It is necessary to communicate more about borrowers' obligations and the risks of late repayment so that people have more confidence.

In addition, financial companies should continue to promote their image as legitimate and legitimate enterprises; offer more diverse and useful products to customers; provide installment loans to workers in industrial parks and export processing zones; expand their networks to remote areas; and especially, improve their debt collection culture.

Distinguishing between consumer credit and black credit

Reporter: Given the recent situation of "terrorist" debt collection that has negatively impacted the consumer finance market and affected even healthy lending institutions, how can we collect debts in accordance with the law, madam ?

- Lawyer TRUONG THI HOA , Ho Chi Minh City Bar Association, replied: It must be said that consumer credit contributes to economic development. This is a solution to combat and limit black credit. The right to access consumer finance for disadvantaged people in society is very necessary. It is necessary to create conditions for them to access finance, contributing to narrowing the gap between low-income and high-income people.

Consumer credit development, lending must go hand in hand with debt collection, but how to collect debt in accordance with the law? First, there must be full legal regulations. The State Bank has issued many documents and circulars related to consumer lending activities. These regulations need to be implemented, inspected, and monitored.

Regulations are in place, but the important thing is the people who implement them. Because, although there are many very clear regulations on employee ethics - such as not being allowed to call outside of business hours and on weekends when collecting debts... - this situation still occurs. With bad debts, the mentality of how to collect debts still exists, so it is necessary to have a methodical and professional approach. The State Bank's document stipulates that threats are not allowed when collecting debts. So what constitutes a threat is also a matter of concern and needs to be clarified.

How do borrowers know about "exorbitant" interest rates ?

- Article 468 of the Penal Code clearly stipulates the maximum loan interest rate is 20%/year, but the method of calculating interest is important. The interest rate is 20%/year but the actual fee is very high, so it needs to be calculated based on the decreasing balance, not the initial balance. The problem is how to monitor, propagate, and disseminate so that customers understand; must coordinate to have many debt collection methods but not against the law. When a finance company sells debt to another business, it must ensure that the unit has professional, capable, ethical debt collectors... Hopefully, Nguoi Lao Dong Newspaper will continue to follow this topic closely because consumer credit is growing. Finance companies, commercial banks, and pawnshops are also consumer credit, so they need to propagate so that customers can access capital in accordance with regulations and the law.

Consumer borrowers need to know clearly the finance company, the bank that lends them money, need to learn the regulations and have a specific contract. The lender is obliged to provide the loan draft for the borrower to study; if using a sample contract, it must be posted at the office, transaction branch for the borrower to refer to. In addition to the interest rate, the method of calculating interest must also consider the method of urging, collecting and handling debt later.

Regarding debt collection, if the lender urges collection in violation of regulations or the law, the borrower can report to the competent authorities, which are the local branch of the State Bank and the police.

Source: https://nld.com.vn/kinh-te/hinh-thanh-thoi-quen-vay-van-minh-tra-van-minh-20230420203204766.htm