|To meet the rising demand, many banks are offering preferential loan packages to attract customers. — Photo cafef.vn
HA NOI (VNS) — Commercial banks and financial companies are fiercely competing for a slice of the profitable personal loans market as demand often rises sharply at the end of the year.
Industry insiders said the period between December till the Tet (Lunar New Year) holiday that falls on February 8, 2016 was always the most popular period for personal loans, as Vietnamese people required money for home repair and purchase, shopping and car purchases.
To meet the rising demand, many banks are offering preferential loan packages to attract customers.
VietBank is marketing home purchase loans at an annual preferential interest rate of eight to nine per cent for the first year.
An Binh Bank, for example, is offering loans for car purchase at an annual preferential interest rate of 7.49 per cent.
Viet Capital Bank is even offering loans at just 6.8 per cent interest per year to customers who want to buy vehicles for production and business. At Sacombank, the annual rate is 7.5 per cent for the first year.
Many banks are also co-operating with production, trading and service firms to offer preferential programmes to customers who pay with credit cards.
Some lenders have even introduced personal loans worth VND20 million to VND500 million (US$890-$2,230) for consumption purposes, with there being no need for borrowers to mortgage their assets.
Experts said this upward trend would continue till the Tet holiday. Banks would try to lure customers with low interest rates, especially for mortgage and real estate loans.
According to the State Bank of Viet Nam, outstanding consumer loans as of the end of the third quarter surged 31.4 per cent against December 2014. The amount accounted for eight per cent of the country's total outstanding loans.
Dang Ngoc Tu, vice-head of the National Financial Supervisory Commission's policy research and co-ordination department, said the domestic consumer loans market had a lot of potential as Viet Nam has 37.8 million people with stable income, of which 30 per cent would be eligible for consumer loans.
The Viet Nam Banks Association also estimated that consumer lending could account for 10 per cent of the GDP, or more than $10 billion per year, in the next five years.
However, experts said to attract more customers in the long run, lenders needed to improve their technology, hire quality employees, diversify channels and focus on risk management. — VNS