Abstract
About this Report
This Euromonitor market report provides market trend and market growth
analysis of the Consumer Lending industry in Vietnam. With this market report,
you' ll be able to explore in detail the changing shape and potential of the
industry. You will now be able to plan and build strategy on real industry
data and projections.
The Consumer Lending in Vietnam market research report includes:
- Analysis of key supply-side and demand trends
- Historic volumes and values
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Consumer Lending in Vietnam?
- What are the major trends set to impact the market in Vietnam?
- What capacity for consumer debt still exists in the market?
- What' s the state of credit quality in the market?
- Has the economic downturn reset the lender competitive landscape?
Why buy this report?
- Gain competitive intelligence about market leaders
- Track key industry trends, opportunities and threats
- Inform your marketing, brand, strategy and market development, sales and
supply functions
Euromonitor' s industry reports, including Consumer Lending in Vietnam,
originate from our database within our Consumer Finance market share and
market size database, Passport, a platform which analyses Consumer Finance in
46 countries and globally.
EXECUTIVE SUMMARY
Strong growth continues in all sectors
All consumer lending categories recorded double digit growth in Vietnam in
2010. This could be attributed to several reasons, including the more open
mindset of Vietnamese consumers towards borrowing money, rising demand for
credit, and lower interest rates. However, there were still many other factors
hindering growth, such as the complicated administrative procedures required
for obtaining credit in Vietnam and the underdeveloped consumer credit rating
system which operates in the country. Continuous support from the Government,
as well as collaboration between financial institutions and the Government are
expected to occur during the forecast period as consumer lending develops and
growth is pushed further.
Underdeveloped credit rating system hinders growth
The consumer credit rating system in Vietnam remained very much underdeveloped
in 2010. This led to many banks remaining hesitant to promote consumer lending
products due to the risk they are forced to bear. However, the situation is
expected to improve during the forecast period as the Government, banks and
other financial institutions collaborate to develop a better and more reliable
credit rating system. Once this system is fully developed and operational,
consumer credit will post even stronger growth as banks will more willing to
push consumer lending products.
Many people still prefer to borrow from friends and family
Many Vietnamese consumers preferred to borrow money from friends and family in
2010. This was due to several reasons, such as the fact that loans obtained
from these sources tend to be interest free, and not having to face the long
and complicated procedures which are required by the majority of banks in
order to obtain credit. This preference for credit from friends and family
presented a threat to the consumer lending on the whole during 2010. In order
to counter this threat, Vietnamese banks were forced to lower their interest
rates and try to make their application procedures faster and simpler.
Interest rates remain high
The lending interest rate remained high in Vietnam during 2010, despite the
concerted efforts of the Government and banks to reduce lending interest
rates. The high interest rate could be connected to the high rate of inflation
in Vietnam, which was 10% in 2010. High interest rates continued to deter many
Vietnamese consumers from borrowing as the cost of credit was simply too high
for many to be able to afford.
Growth is expected to remain strong over the forecast period
Almost all consumer lending subcategories are expected to see double digit
forecast growth over the forecast period, which can be mainly attributed to
the constantly rising demand for credit in the country. Industry players
believe that there is huge untapped potential for consumer lending in Vietnam.
Besides banks, new financial institutions are expected to enter Vietnam during
the early stages of the forecast period as new players make efforts to grow by
exploiting the huge potential that exists within consumer lending in Vietnam.
METHODOLOGY
Global insight and local knowledge
With 40 years' experience of developed and emerging markets, Euromonitor
International' s research method is built on a unique combination of specialist
industry knowledge and in-country research expertise.
This approach is what enables us to achieve our goal of building a market
consensus view of size, shape and trends across the full distribution universe
of each category. We factor in whichever channels are relevant, from
large-scale grocery to direct sellers, from discount stores to local
mom-and-pop outlets.
Industry specialists
Each industry we cover is managed by an Industry Manager and team of Industry
Analysts who research and report on their specialist categories all year round.
Our collaborative approach to research means that these industry teams are in
constant dialogue with industry players and opinion formers. The planning of
our research programmes reflects latest market trends and industry events. In
completing each update project, this provides invaluable input to the testing,
review and finalisation of our data.
The specialist in-house teams bring together findings from all stages of the
annual research process. They work closely with in-country analysts, assess
and challenge data and exercise final editorial control over the publication
of new data and analysis.
Country and regional analysts
Our in-country analyst network is managed by country and regional analysts in
our offices around the world. Working closely with each in-country team, the
regional research management team ensures that all country researchers are
well schooled in best practices, from the information collected in store
checks, to the dialogue we build in trade surveys. Our country analysts ensure
that national reports explain the data trends and provide clear insights into
the local market' s dynamics.
In-country research network
To deliver fresh insights every year in countries all around the world, we
believe the strongest approach is to use analysts on the ground. They bring
fluency in local language, physical proximity to the best sources, an ability
to engage directly with local industry contacts, and an awareness of how the
products and services we study are advertised, sold and consumed. These are
essential parts of our ability to report incisively on these markets.
About Euromonitor
Established in 1972, Euromonitor International is the world leader in strategy
research for consumer markets. Comprehensive international coverage and
leading edge innovation make our products an essential resource for companies
locally and worldwide.
Table of Contents
Consumer Lending in Vietnam - Industry Overview
EXECUTIVE SUMMARY
- Strong growth continues in all sectors
- Underdeveloped credit rating system hinders growth
- Many people still prefer to borrow from friends and family
- Interest rates remain high
- Growth is expected to remain strong over the forecast period
KEY TRENDS AND DEVELOPMENTS
- More open mindset helps to push growth
- Rising demand for housing pushes growth in mortgages
- Complicated credit procedures deter would-be borrowers
- Interest rates still high despite Government efforts
- Local players dominate consumer lending but foreign players provide more
services
MARKET DATA
- Table 1. Consumer Lending By Category: Outstanding Balance: Value 2005-2010
- Table 2. Consumer Lending By Category: Outstanding Balance: % Value Growth
2005-2010
- Table 3. Consumer Lending By Category: Gross Lending: Value 2005-2010
- Table 4. Consumer Lending By Category: Gross Lending: % Value Growth
2005-2010
- Table 5. Consumer Lending: Non-performing Loans 2005-2010
- Table 6. Mortgages/Housing: Non-performing Loans 2005-2010
- Table 7. Consumer Credit: Non-performing Loans 2005-2010
- Table 8. Forecast Consumer Lending By Category: Outstanding Balance: Value
2010-2015
- Table 9. Forecast Consumer Lending By Category: Outstanding Balance: %
Value Growth 2010-2015
- Table 10. Forecast Consumer Lending By Category: Gross Lending: Value
2010-2015
- Table 11. Forecast Consumer Lending By Category: Gross Lending: % Value
Growth 2010-2015
DEFINITIONS
- Mortgages/housing
- Consumer credit
- Auto lending
- Card lending
- Home lending
- Durables lending
- Education lending
- Other personal lending
- Non-performing
- Gross lending
- Outstanding balance
- Summary 1. Research Sources
Consumer Credit in Vietnam - Category Analysis
HEADLINES
TRENDS
- Consumer credit continued to increase rapidly across all subcategories in
Vietnam during 2010. However, demand for consumer credit was still very much
limited to Vietnam' s major cities. The first reason for this is that banking
services were not as accessible in Vietnam' s more remote rural areas as in
urban areas. Thus, the majority of population in Vietnam' s rural areas
remained unbanked in 2010, and they were neither open to the idea of borrowing
money from banks, nor in possession of much information regarding consumer
lending services. The second reason for the consumer credit bias towards urban
Vietnamese consumers was that the majority of lenders in Vietnam asked for
security such as proof of income or valuable possessions, which made it even
more difficult for rural consumers to take up loans as they are generally not
as wealthy as urban consumers and therefore not in such a good position to
have credit approved.
COMPETITIVE LANDSCAPE
- In 2009, the leading lenders in consumer credit in Vietnam were not much
different from those in financial cards and payments. Major banks such as
Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), East
Asia Commercial Bank, Asia Commercial JSB and Vietnam Joint Stock Commercial
Bank for Industry and Trade (Vietinbank) continued to lead consumer credit in
2009.
PROSPECTS
- Consumer credit in Vietnam is expected to continue to be subject to strong
growth over the forecast period, with gross lending set to increase in
constant value by 15% CAGR. As consumer credit is still very much a niche
market in Vietnam, the potential for further rises in demand remains huge.
However, there are many steps which must be taken by financial institutions
and the Government in order to push demand and stimulate stronger growth in
consumer lending, of which the most important are developing a reliable credit
rating system and stabilising interest rates.
CATEGORY DATA
- Table 12. Consumer Credit By Category: Outstanding Balance: Value 2005-2010
- Table 13. Consumer Credit By Category: Outstanding Balance: % Value Growth
2005-2010
- Table 14. Consumer Credit By Category: Gross Lending: Value 2005-2010
- Table 15. Consumer Credit By Category: Gross Lending: % Value Growth
2005-2010
- Table 16. Forecast Consumer Credit By Category: Outstanding Balance: Value
2010-2015
- Table 17. Forecast Consumer Credit By Category: Outstanding Balance: %
Value Growth 2010-2015
- Table 18. Forecast Consumer Credit By Category: Gross Lending: Value
2010-2015
- Table 19. Forecast Consumer Credit By Category: Gross Lending: % Value
Growth 2010-2015
