Saturday, December 3 2016

VietNamNews

Tet keeps banks busy

Update: December, 26/2015 - 12:00

Many people spend lots of money over Tet.

Sometimes they plan to spend money they do not have, so they must go the bank to borrow it.

Many banks want to lend people money over Tet because it is good business for them.

Some banks offer special deals to people who wish to borrow money over Tet.

To meet the rising demand, many banks are offering preferential loan packages to attract customers.
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

 

GLOSSARY

 

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.

 

A commercial bank is one that offers its services, such as keeping people's money in accounts and lending money, to the general public.

 

Financial companies are companies that are not banks but nonetheless provide similar services.

When banks are competing, they try to do better than one another.

Banks and finance companies give out personal loans when they lend an individual money to spend on his or her own benefit.

The personal loans market is made up of all the business that goes on anything to do with personal loans. 

There is demand when people want something.

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.

Insiders are people inside a community – in this case the banking sector – who know certain information that many other people do not know.

Purchase means buying.

To meet the rising demand, many banks are offering preferential loan packages to attract customers.

Loan packages are deals that involve lending people money. A preferential loan package is one that is a really good deal.

VietBank is marketing home purchase loans at an annual preferential interest rate of eight to nine per cent for the first year.

Home purchase loans are deals that involve lending money to people so that they can buy homes for themselves.

When banks and other organisations lend money to people, they make money from those people by making them pay back more than they borrow. This extra amount is called interest. The interest rate is a percentage that is worked out from the proportion of the loan that is charged as interest to the borrower.

Many banks are also co-operating with production, trading and service firms to offer preferential programmes to customers who pay with credit cards.

Co-operating means working together.

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.

Loans that are used for consumption purposes are loans that involve money being lent to people so that they can simply spend the money on various things rather than invest it in something like a home that could one day be worth more money than they paid for it.

A mortgage is an agreement someone has with a bank to pay off a property for which they have taken out a loan to buy.

Assets are things people own that can be sold for cash, if necessary.

Experts said this upward trend would continue till the Tet holiday.

A trend is a general direction in which things are going. If things, such as more money lending takes place, there would be an upward trend in money lending. If less lending was happening there would be a downward trend in money lending.

Banks would try to lure customers with low interest rates, especially for mortgage and real estate loans.

Real estate means property, such as houses, farms, shops, factories, businesses and other buildings.

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.

Outstanding loans are loans that have not been paid off.

A surge is a sudden upward movement. In this case the number of outstanding consumer loans surged because there were so many more of them in the third quarter of this year than in December last year.

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.

If something has potential it has a good chance of become a success.

When people have stable incomes, they receive money regularly.

To be eligible for consumer loans means to qualify to have them.

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.

GDP stands for Gross Domestic Product. It is the value of everything a country produces plus the value of its services.

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.

To hire somebody means to pay them to work for you.

Employees are people who work for a company.

Quality employees are people who are of good value and work for a company.

Risk management means working out what risks will be in the way of a business idea and thinking about how to do things in such a way that those risks don't cause too many losses.

WORKSHEET

Find words that mean the following in the Word Search:

1 . A word used in Viet Nam for Lunar New Year.

2.  A bank where the annual rate is 7.5 per cent for the first year.

3. Three letters that mean the value of everything a country produces plus the value of its services.

4. The month that is the beginning of the most popular period for personal loans.

5. A word that means much the same as real estate.

 

 

 

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© Duncan Guy/Learn the News/ Viet Nam News 2015








































1. Tet; 2. Sacombank; 3. GDP; 4. December; 5. Property.

 

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