Clear growth, consumer finance market enters new era

In 2025, the consumer finance market will continue to have many new opportunities for strong growth and breakthrough. (Source: Home Credit)

From the bottom up

In 2023, the global economy is gloomy after the post-Covid-19 period, with many uncertainties such as geopolitical conflicts. Domestically, aggregate demand and investment have decreased; exchange rates and interest rates have fluctuated unpredictably... which have significantly impacted consumers' lives. This situation has led to tightening spending. Many organizations and individuals have "tightened their belts" and have not applied for new loans to expand their businesses.

However, by 2024, things have improved significantly, as the Government has implemented credit packages to support industries and sectors; reduced value-added tax on a number of groups of goods and services, and issued many new legal documents...

The Vietnam Economic Report 2024 and Forecast 2025 recently released by BIDV Training and Research Institute shows that consumption continues to recover with total retail sales of goods and services in 2024 increasing by 8.8% thanks to a sharp increase in the number of tourists and a recovery in personal consumption. (Source: Observer, Nguoi Lao Dong Newspaper)

Ms. Van Anh (a trader at Dong Xuan market, Hanoi) recalled that she had to ask the bank twice to extend her debt to have money to pay off consumer loans for her family. “However, by 2024, business had become easier than before when my business partners had more money coming in and out, so I also looked for loan packages to add more capital to import goods,” Ms. Van Anh confided.

In big cities like Hanoi, Ho Chi Minh City..., outstanding consumer credit loans increased sharply. Typically, by the end of October 2024, the total outstanding consumer credit in Ho Chi Minh City reached more than 1 million billion VND, an increase of 6.3% compared to the end of 2023 and 12% compared to the same period.

New era of growth

Experts say that by 2025, the consumer finance market will continue to have many new opportunities to grow and make a strong breakthrough when the World Bank recently raised its forecast for Vietnam's GDP growth this year to 6.6%, surpassing the Philippines (6.1%), Cambodia (5.5%), Indonesia (5.1%) and Thailand (2.9%). Thereby, improved household income will strongly promote the demand for consumer finance.

In addition, FinGroup assessed that Vietnam's consumer finance market still has many development prospects when Vietnam's consumer credit scale has only reached over 10% of GDP - a figure much lower than many other countries and territories such as South Korea with over 40% of GDP, Hong Kong (China) with over 20%...

In addition, the Government’s specific support and reform policies in the consumer finance sector will encourage borrowing demand. Specifically, for loans under VND100 million, customers do not need to provide detailed capital usage plans. Instead, customers only need to share basic information about the purpose of the loan and their ability to repay the debt.

Faced with these ideal conditions, credit institutions and consumer companies have proactively reformed, applied technology systems and digital transformation more strongly to anticipate the new growth "wave" of the next phase.

For example, at Home Credit, through investing in AI (artificial intelligence) and Big Data (big data), this business has digitized the entire loan process, from registration, approval to customer support. Home Credit Vietnam's Home App mobile application has also been upgraded to bring a smooth experience, from instant loan approval to 24/7 chatbot support. In particular, the installment loan process is optimized on the application, taking only 3 minutes from approval to disbursement, bringing a fast, convenient and seamless experience to users.

In addition, to strengthen its presence in many fields, Home Credit's Home PayLater has strategically partnered with many major retailers and e-commerce platforms, thereby becoming an essential payment tool for modern consumers.

Source: https://baoquocte.vn/tang-truong-ro-net-thi-truong-tai-chinh-tieu-dung-buoc-vao-ky-nguyen-moi-309904.html