Expanding consumer credit and combating illegal lending practices.

- In the context of an economic recovery, consumer credit is increasingly asserting its important role as it both meets the practical capital needs of the people and contributes to stimulating production and promoting growth. Commercial banks' efforts to promote consumer lending with preferential interest rates and convenient procedures have made it easier for people to access formal capital. This is also one of the effective solutions to reduce the "breeding ground" of illegal lending, a problem that is causing many negative consequences for social life today.

The unpredictable consequences of high-interest loans.

Recently, many people have faced serious consequences for resorting to informal lending sources due to a lack of information or failure to complete loan procedures at banks. In addition, a common reason is that many people have urgent financial needs and desire quick and easy procedures, making them more likely to choose illegal lenders instead of accessing legitimate lending channels.

LPBank Tuyen Quang branch staff advise individual customers on consumer credit programs.

Mr. Nguyen Huy Hoang, from Group 1, Hung Thanh Ward, recounted: “Before completing the paperwork for a bank loan, I urgently needed money, so I decided to borrow 200 million VND through the FEcredit app. The loan application process was easy, but when I tried to repay early, they wouldn't agree. I called to request early repayment, but the staff said it wasn't due yet, so I wasn't allowed to pay early. Meanwhile, the monthly interest I had to pay was very high. Looking back now, I realize how reckless I was.”

Similarly, Ms. Pham Thi Linh, from Hamlet 1, Trang Da Commune ( Tuyen Quang City), is still shocked when recalling the troubles caused by her relatives borrowing from loan sharks: “I didn't borrow a single penny, yet one day I received continuous calls from an unknown number, cursing and demanding that I pay on behalf of my brother. Only after asking around did I find out that he had borrowed from a group of loan sharks. Not only me, but many other relatives also received threatening calls and were harassed all day long. When I found out the truth, I understood that my brother couldn't bear the excessively high interest rate, so the loan sharks put tremendous pressure on him.”

Such stories are not uncommon. With unexpected expenses, especially small loans for household living costs, home repairs, or education expenses, many people choose to borrow money quickly or through mobile apps, thinking it's a fast and convenient option. However, they don't anticipate the risks of exorbitant interest rates and unscrupulous debt collection methods. This creates fertile ground for illegal lending to thrive, causing instability for many families.

Safe channels for accessing loans

Mr. Trinh Ngoc Tuan, Deputy Director of the State Bank of Vietnam's Regional Branch IV, emphasized: "In recent times, the State Bank of Vietnam has directed credit institutions in the area to accelerate the implementation of consumer loan packages with convenient procedures and competitive interest rates so that people can access official capital quickly and promptly. This is an important solution to limit illegal lending, protect the rights of borrowers, and at the same time contribute to promoting production and consumption, creating momentum for economic growth in the locality."

In an effort to combat illegal lending, banks in the area have strived to simplify procedures, streamline paperwork, and diversify loan products, making it easier for people to access legitimate sources of capital.

Mr. Nguyen Duc Hoang, Deputy Director of LPBank Tuyen Quang, said: “LPBank always prioritizes simplifying procedures, streamlining paperwork, and creating favorable conditions for customers to borrow capital quickly, especially with loan packages for civil servants, public employees, and retirees that do not require collateral. Retirement loans can reach up to 500 million VND, while civil servants, public employees, and members of the armed forces can borrow up to 300 million VND. Our goal is to deliver capital to people quickly and safely, contributing to combating illegal lending.”

Furthermore, VietinBank is one of the pioneering banks in applying digital technology to its loan disbursement process. Customers can proactively complete loan procedures and receive disbursement results directly through the VietinBank iPay Mobile application. The money will be transferred directly to their account in a short time, with disbursement limits of up to 500 million VND per day. This online disbursement service is particularly suitable for loans serving production and business purposes, helping customers manage their capital flexibly and save maximum time and effort.

Besides streamlining disbursement procedures, banks are also implementing various loan packages with low interest rates, contributing to combating illegal lending. For example, VietcomBank Tuyen Quang prioritizes lending to businesses involved in production and trade in priority sectors of the province with interest rates starting from only 4.5% per year; LPBank Tuyen Quang and Agribank Tuyen Quang are currently offering home and land purchase loans with interest rates ranging from 3.88% to 5.5% per year, with preferential rates for the first three years and a maximum loan term of 35-40 years.

Lending interest rates are currently on a downward trend, making it easier for people to access legitimate sources of capital. According to statistics, short-term loan interest rates for priority sectors are only 3.5% - 4% per year; medium and long-term loans are commonly between 6% - 12.5% ​​per year, about 0.5 - 1% lower than at the beginning of the year. The banks' aggressive interest rate reductions and continuous introduction of attractive loan packages have directly limited the opportunities for illegal lending.

Source: https://baotuyenquang.com.vn/mo-rong-tin-dung-tieu-dung-day-lui-tin-dung-den-213562.html