Vietnam's consumer finance market: Opportunities for the brave

Despite many fluctuations, the Vietnamese consumer finance market is still rich in potential for those who are determined enough to overcome the “storm”. There, companies with rich experience in the market and a solid foundation such as FE CREDIT have gradually proven their ability to adapt and reap positive results.

The market is volatile, but rich in potential

Vietnam's consumer finance industry is going through a tough period in 2022-2024, after a growth cycle that lasted for more than a decade before that. The impact of the Covid-19 pandemic, pressure from credit control policies, high interest rates in 2022-2023, and changes in consumer spending behavior have put many financial companies in a passive position.

Vietnam's consumer finance market: Opportunities for brave people

During this period, business revenues have plummeted, with many companies reporting losses in their operations. Many businesses have chosen to scale down operations, withdraw, or transfer to other entities, while a few have restructured to gradually adapt to the market context. This has also raised concerns: Is the Vietnamese consumer finance market no longer attractive, especially when looking at the high level of bad consumer debt?

However, according to analysts, the room for growth in this industry is still very large and the current period is opening a new development cycle of Vietnamese consumer finance.

Firstly, there is still a lot of room for growth when the penetration of formal consumer finance in Vietnam is not high. According to the State Bank, the total outstanding loans for consumer life in the whole market reached about 2.8 million billion VND, accounting for 20% of the total outstanding loans of the whole economy . Of which, commercial banks provided 94% and consumer finance companies only contributed about 4.8% with a total outstanding loan of 139,000 billion VND.

In addition, the trend of shifting to online shopping, installment payments, and credit card use also contributes to boosting consumer demand. MBS Securities expects the consumer finance sector to gradually recover in the second half of 2025, driven by the 8% GDP growth momentum, improved household incomes, and a more favorable legal framework. In the medium term, with the IMF forecasting a 5.5% CAGR GDP growth per capita in the 2025-2030 period, MBS Securities projects that consumer credit could grow an average of 20% per year in the next two years, thanks to the above positive dynamics.

In addition, the legal framework is gradually being strengthened to support safer and more transparent consumer finance activities. The legalization of Resolution 42 on bad debt handling provides a clear mechanism for handling secured assets, creating conditions for financial companies to expand secured lending.

All of the above factors show that the market is gradually opening a new development phase – where market understanding, adaptability and strategic resilience will bring advantages to consumer finance companies, especially those that have been well prepared.

FE CREDIT - Going through the storm, firmly entering the new cycle

In the context of the market not having clear changes, FE CREDIT has completed the reshaping process and is entering a new growth cycle with a solid position.

After more than two years of comprehensive restructuring with strategic support from two leading domestic and international financial institutions, VPBank and SMBC, FE CREDIT recorded five consecutive quarters of positive profits. In the first two quarters of this year alone, the company achieved nearly VND270 billion in pre-tax profit. Capital adequacy, operational efficiency and core credit indicators have all improved significantly, demonstrating the right and sustainable direction.

Credit rating organizations such as Moody's, or securities companies SHS, MBS all recognized FE CREDIT's great strides after the restructuring process, with positive growth prospects.

FE CREDIT's recovery momentum comes from a series of comprehensive strategic transformations, including the implementation of a corporate governance model, close cooperation with parent financial institutions VPBank and SMBC Group. FE CREDIT is currently focusing on investing in internal capacity, especially sustainable governance, through developing high-quality human resources and upgrading modern information technology infrastructure to improve operational efficiency. At the same time, FE CREDIT focuses on building and applying international governance standards, aiming for transparency, responsibility and long-term growth, creating a solid foundation for sustainable development.

The company has diversified its segments from personal consumer loans, motorbike loans, electronics, home appliances to credit cards, with suitable features and maximum response to customers' credit needs. This strategy not only helps FE CREDIT better control credit risks but also expands its customer base, strengthens the connection of the retail and consumer ecosystem. At the same time, the company also promotes digital transformation through the multi-tasking financial application - FE ONLINE 2.0, helping users experience a full range of consumer loan services, card opening, and loan management on a single digital platform.

The careful preparation process has brought certain advantages to FE CREDIT in the new growth cycle. The solid foundation from two leading financial institutions in Vietnam and Japan helps the company reduce its dependence on short-term capital and limit risks from market fluctuations, creating favorable conditions for FE CREDIT to develop sustainably in the market.

Credit rating agencies such as Moody's, or securities companies SHS, MBS have all recognized FE CREDIT's great strides after the restructuring process, with positive growth prospects. In the context of Vietnam's economy continuing to grow, more reasonable interest rates and improved people's income, FE CREDIT possesses all the necessary elements and is ready to lead the consumer finance industry into a new, more modern and sustainable growth cycle.

Source: https://baodautu.vn/thi-truong-tai-chinh-tieu-dung-viet-nam-co-hoi-danh-cho-nguoi-ban-linh-d352869.html