20150706-Vietnam-Consumer-Finance-2015_Demo-Final_20150706185045

‹#›
Published on: 1 April 2014
Vietnam Consumer Finance Market 2015
@ 2015 StoxPlus Corporation.
All rights reserved. All information contained in this publication is copyrighted in the name of StoxPlus, and as such no part of this publication may be
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Date of report: 15 June 2015
Part of StoxPlus’s Market Research Report Series for Vietnam www.stoxresearch.com

2Publishing license No. 1647 – 2015/CXBIPH/68 – 37/HĐ issued on 12/06/2015. Printed 100 copies in English, size 21x29.7cm, at Hong Duc
Publishing Company on 07/07/2015, Hanoi, Vietnam.
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Table of Contents
Part Content Page
Executive Summary 5 – 7
1 Consumer Finance Market 8 – 25
1.1 Sector Structure 9
1.2 Market Size and Growth 10 -16
1.3 Competition Dynamics 17 – 22
1.4 Informal finance activities 23- 25
2 Detailed Market Review 26 – 57
2.1 Overall of products 27 – 30
2.2 Detailed product survey 31 – 44
2.3 Sale Channels 45 – 48
2.4 Marketing Campaigns 49 – 53
2.5 Payment Methods 54 – 57
3 Key Player Profile 58 -
3.1 Domestic Commercial Banks 58 – 61
3.2 Foreign Commercial Banks 62 – 65
3.3 Finance Companies 66 – 73
Part Content Page
3.4 Others 74 – 76
4 Major Economic Context 77 - 94
4.1 Macroeconomic context 77 – 80
4.2 Banking sector context 81 – 85
4.3 Non-bank sector context 86 – 88
4.4 Major policy changes 89 – 91
4.5 Analysis of foreign interests in Vietnam 92 – 94
5 Market Potentials & Challenges 95
5.1 Key Growth Drivers 95 – 100
5.2 Main Product Trends 101 – 103
5.3 Main Challenges 104 - 106
Appendices 107

Abbreviation
No. Word Stand for
1 APR Annual Percentage Rate
2 BCG Boston Consulting Group
3 CF Consumer Finance
4 CMF Vietnam National Coal-Mineral Finance JSC
5 COD Cash on Delivery
6 DSA Direct Sale Agents
7 JSCBs Joint Stock Commercial Banks
8 MAFC Mirae Asset Finance Company
9 MFI Microfinance Institution
10 MOIT Ministry of Industry and Trade
11 MSB Maritime Commercial JSC
12 NFSC National Financial Supervision Commission
13 POS Point of Sale
14 SBV State Bank of Vietnam
15 SOCBs State-owned Commercial Banks
16 SOE State-owned enterprise
17 TFC Vietnam Texttile Finance Company
18 VCFC Vietnam Chemical Finance JSC
19 VECITA Vietnam E-commerce and Information Technology Agency
20 VPB FC VP Finance Company
21 ID National Identity Card

Executive Summary
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Executive Summary (cont’d)
Detailed Product Survey
5) In our detailed survey of CF products, finance
companies’ interest rates range from 13% to as
much as 63 – 70% APR. Home Credit (PPF) has
the highest interest rates.
The interest rate of Finance Companies is much
higher than commercial banks (local and
international). Finance companies often use the
minimum interest rate based on calculating the
cost of management and capital, then adjusting
the interest rate according to the scorecard for
each kind of customer and loan, depending on the
other conditions such as capital scale, duration,
and risk level.
Domestic and foreign banks (state-owned and joint
stock banks) have remained their interest rate
low, compared to other financial institutions. Due
to higher target customer, foreign commercial
banks only targeted on credit card users only and
they left the unsecured loans for others.
Other companies are ACS Trading and MobiVi
offering the lowest rate of interest. In return to
the longer appraisal time, these companies offer
the appropriate interest in order to compete with
the rest of the market.
14% 14%
17%
49%
30% 29%27%
22% 23%
0%
10%
20%
30%
40%
50%
60%
HD Finance FE Credit ACS Trading
6) HD Saison and FE Credit have the simplest
application procedures. Meanwhile,
Prudential Finance has the most complicated
procedure in terms of required documents,
comparable to those of banks
Domestic and foreign commercial banks focus
on higher amount of loan. With the purpose of
minimizing the risks of unsecured loans, banks
will require the strictly application forms with
full documentations such as proof of income,
employment contract of minimum time, salary’s
statement of 3 months or 1 year. Consequently,
since banks understand and get an guarantee of
customer’s financial status and credit history, it
could offer the appropriate and attractive
interest rate in order to offset the complicated
requirements.
Finance companies, on the other hand, they
leverage their competitive advantage by
simplicity and convenience. Owing to the
smaller amount of loan and also taking high risk
attitudes, finance companies, require several
basic requirements such as permanent
residential book, and utility’s bill. It is clearly
much easier to customers to get those
documents and reduce the time of appraisal.
Foreign banks main activities is credit issuance. As
a result, its model is based upon on credit card.
Customers must have a bank account, and the
disbursement will charge via bank transfer. In
order to differentiate themselves in the market,
foreign banks such as HSBC, ANZ or Citibank are
mainly focusing on middle high customers.
Through various methods, point of sale is the most
popular and effective channel for finance
companies. The agents based at retailers or
product provider’s location, help and consult
directly to customers. Focusing on small amount of
loans, consequently, finance companies do not
require much credit approval. Therefore, the
application process is quick and easy.
ACS Trading is not licensed as a finance company,
but provides similar installment loans services at
POS like other finance companies.
MobiVi is a new model. With the benefits of
advance technology in online payment along with
the expertise in financial services, MobiVi offers to
Corporate Package launched in 2013 and Agent
Package launched 2012. MobiVi is dedicated to
providing access to financial source to Vietnam
low-income class, especially for industrial zone
workers.

Executive Summary (cont’d)

Section 1: Consumer Finance Market
1.1 Sector Structure
1.2 Market Size and Growth
1.3 Competition Dynamics
1.4 Informal Financing Activities
Contents

Consumer finance is part of consumer lending business. However, consumer finance refers to credit
used to purchased non-investment goods or services whose value depreciates quickly
Section 1: Consumer finance market
Sector Structure
• Under Decree No. 39/2014/ND-CP, consumer credit is defined as ‘a form of credit provided to individuals for their consumption purpose through
provision of loans’. According to this definition, the scope of consumer finance in Vietnam is described very broad and there is yet any official
regulation to clearly separate consumer finance from retail banking services.
• Meanwhile, if using international standards, consumer finance services industry consists of “the amount of credit used by individual to purchase non-
investment goods or services that are consumed and whose value depreciates quickly” (according to Consumer Finance Protection Association in UK).
Companies in this field engages in personal loan services, such as recreational vehicles, home appliances and equipment, etc.
• StoxPlus’ Consumer Finance Definition: In light of these definitions, based on our understanding of core-business of finance companies in Vietnam,
pure consumer finance consists of installment loans, cash loans and credit cards issued by finance companies. Other extended consumer finance
services are part of retail banking business, including collateral loans (Home Mortgage, Home Renovation, Automobile) as well as credit card issuance
provided by commercial banks.
• In the following Figure, consumer finance products in Vietnam are categorized into 4 main groups:
Consumer Finance
Installment loans
Loans with collaterals / Mortgages
Extended Consumer
Finance
Consumer Loans
• Loans to purchase household appliances and equipment
• Loans to purchase vehicles (two-wheels and automobiles)
• Loans for educational and medical purposes
• Loans for other cultural, sport, and traveling purposes
Cash loans
• Automobile loans
• Home Mortgage
• Home Renovation
Loans through credit cards and account overdraft
Figure 1: Categories of Consumer Finance Products as per Decree No.39/2014/ND-CP
Source: StoxPlus

Section 1: Consumer Finance Market
Contents

Source: StoxPlus from SBV and StoxPlus
Vietnam consumer loans continue to grow in 2014, reaching US$10.4billion as of end of August 2014
Market size and growth
Figure 2: Consumer Loan Balance (USDbn) and %GDP, %Total Loans
In line with the booming credit growth Credit tighten policy dealing
with inflation, SBV asked all
commercial banks to reduce
the non-production loans
which include CF to below
22% by 30 June 2011 and
below 16% by 31 Dec 2011.
SBV issued Document No. 2056/NHNN-CSTT dated
04/10/2012 excluding two groups of loans from the
non-production loans under growth cap: (i) loans
related to consumer real estate financing and (ii)
consumer financing for everyday life purposes
(vehicles and home appliances), for education
purposes, and medical purposes.
4.9 4.8
7.2
8.2
6.3
7.4
8.9
10.4
7%
5%
8%
8%
5.2% 5.2%
6.0%
6.6%
8%
7%
7%
6%
4.7%
5.3%
5.4% 5.3%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
-
2.0
4.0
6.0
8.0
10.0
12.0
Dec-07 Sep-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Aug-14
Consumer Loans Balance in USDbn % Consumer Loans/GDP % Consumer Loans/Loan Book

Consumer loans outstanding continued to grow very quickly, at 18% in 2014
Market size and growth
Figure 3: Consumer loans annual growth rate, 2007 – Aug 2014
Source: StoxPlus

Housing / Home improvement and home appliances and furniture loans still accounted for the majority of
consumer loans in 2014
Sector Segments
Figure 4: Breakdown of Vietnam Consumer Loans, as of 30/08/2014
Source: StoxPlus from NFSC

All 7 types of consumer loans have grown at the same rate in 2014 compared to 2013
Sector Segments
Figure 5: Breakdown of Vietnam Consumer Loans, 2013-2014
Source: StoxPlus from SBV and NFSC

Market size and growth & Segmentation
Finance companies have the fastest growth in consumer loans compared to other types of players
Source: StoxPlus from NFSC and SBV
Figure 6: Breakdown of Vietnam Consumer Loans by players, 2013-2014

Market size and growth & Segmentation
Figure 7: Market share of finance companies as at August 2014 Figure 8: Loan outstanding of finance companies, 2014
Source: StoxPlus from NFSC and SBV Source: StoxPlus from NFSC and SBV
VP Finance Company (i.e. FE Credit) is believed to be the market leader for consumer finance,
followed by PPF and Prudential

Section 1: Consumer Finance Market Overview
Contents

Type of Players Target market Business Model Differentiation Weakness
SOCBs & JSCBs Mass to Affluent Retail Banking Larger loan amount
Strict credit
appraisal
Foreign banks
Upper Mass to
Affluent
Retail Banking
Mid to Large loan
amount
Strict credit
appraisal
Finance
companies
Lower Mass to Upper
Mass
POS|DSA Quick & Easy loan High interest rate
Others
(ACS Trading and
MobiVi)
Lower Mass to Mass POS|DSA|Online
Quick & Easy |
Accessing point |
Lower interest
Long process, take
time for ACS. Need
to partner at
corporate level for
MobiVi
Competition Dynamics

Competition Dynamics

Domestic Commercial Banks
Business Model: Domestic Commercial Banks
RetailersDomestic Commercial Banks Borrowers
ProductsCash
Installment

Foreign Banks
Credit Card Products
Overdraft
Business Model: Foreign Banks
Retailers
Borrowers
Foreign banks

Products
Disbursement Installment
Business Model: Finance Companies Buyers
Points of sale
Finance Companies
Finance Companies

Section 1: Consumer Finance Market Overview
Contents

Vietnamese follows the habit of asking financial support from their friends or relatives. Otherwise,
pawnshops and hui / ho are popular options for students and low-income people
Source: StoxPlus from SBV
Informal Finance
• In general, Vietnamese has held the perceptions about the complicated application
process of banks and financial institutions in the past, as consequence of their
experiences of the fast, simple and interest free from friends. As for low-income
people and students, the habit of borrowing from prawn shop and “Boc ho” are
remained. This circumstance is due to the simple application process, however, the
borrowers must bear the high interest rate in return.
• It is unable to figure out the exact number of informal lending entities in Vietnam.
But as objective observation, several companies have been established and operated
for quite a long time, such as Vietsun Finance (2007), VietMoney (2008), MeCash
(2011). Financing services offered by these entities include: mortgage loans with
collateralized assets (e.g. autos, gold), hire-purchase service, cash loans backed by
insurance agreement or credit card ownership. These services are more flexible and
provide quicker access to cash compared to official loans provided by banks. Even
insurance buyers or credit card owners do not have to prove their financial position to
get the cash loans.
Market overview: Pawnshop is a convenient and popular channel of credit. There are
3,000 pawnshops in Hanoi alone. The market size of pawnshops and other black credit
market is estimated at US$50bn.
• Target market: Pawnshops have a wide range of customer, from students to working
professionals or business owners. They have credit needs but not qualified for bank
loan or lack of knowledge about bank loan services or simply cannot wait for the
time-consuming lending process in banks. The borrowing purpose varies: paying for
tuition fee, gambling, betting games; affords business expenses; etc.
• Products: 02 types of credit products: secured loans and unsecured loans. Secured
loans required assets as collateral, unsecured loans required only reference from
acquaintance or personal documents as pledge.
Unsecured loans can be categorized into 02
types regarding to the collection methods:
• Ordinary unsecured loans: Borrowers will have
to make interest payment every 5 or 10 days
and the interest rate normally is 5 to 10 times
higher than the secured loan.
• “Boc ho”: Borrowers will not get the full size
of the loan but the amount after interest
deduction, often equivalent to 20% of the loan
size. Then, the borrower will have to make
daily repayment to the lender.

Pawnshops and hui / ho are popular sources of credit for students and low-income people
Informal Finance

Contents
Section 2: Detailed Market Review
2.1 Overall of products
2.2 Detailed product survey
2.3 Sales channels
2.4 Marketing campaigns
2.5 Payment methods

Methodology of CF product survey
Overview of products
Description
• Selected points of sale were chosen, direct interview was set in point of sale such as Mobile World, FPT Shop or Nguyen Kim. For each
type of products, consumer finance providers were surveyed at minimum 5 retailers. For example, as for electronic devices, HD Saison, FE
Credit were tested at Nguyen Kim, Tran Anh, Vin Pro, Techone, Nhat Cuong. The simillionar process was applied for the rest.
• Depending on product’s characteristic, several elements were checked, from interest rate to required documents, loan tenor to
penalties.
Limitations
• Due to the limited in the location, only Hanoi and Ho Chi Minh, there were some limitations about the number of products and amount of
financial institutions. Therefore, the sample size was small and only focused on particular products and key financial institutions, 2 for
SOCBs, 5 for JSCBs, 3 for foreign banks and 6 for finance companies.
Sample Size
• 30 points of sale which offered
consumer finance services
• Location: Hanoi, Ho Chi Minh
• Methodology: Mystery shopping
Selected Products
• Cash loan
• Durable goods
• Electronics Devices
• Motorbike/E-bikes
Types of Financial
Institutions
• State-owned commercial banks
• Joint stock commercial banks
• Foreign banks
• Finance companies

Local JSCBs and SOCBs focus on traditional retail banking loans

Company
Cellphone/
Laptop
loans
Motorcycle
loans
Auto loans
Home
appliances
loans
House
Equity/
Home
Renovation
Cash Loans
Credit
cards
Overdraft Online
ANZ
Citibank
HSBC
Standard
Chartered
Foreign commercial banks focus mostly on cash loans and credit card loans
Focused Available Unavailable
Source: StoxPlus

Foreign finance companies have a wide variety of products for POS loans, as well as cash loans

Contents
2.3 Sales channels
2.5 Payment methods

Commercial banks (local and foreign) have lower interest rates range for consumer loans, from 4.50%
to 30% depending on banks and products
Source: StoxPlus’ CF products survey 2015
Figure 21: The CF interest rate range of Commercial Banks, 2014
Key Terms Interest rates

Finance companies’ interest rates are much higher, from 13% to as much as 63 – 70% APR. High
interest rates are due to their easy credit business model.
Figure 9: The CF interest rate range of Finance Companies, 2014
Key Terms
Interest rates

Figure 10: Number of required documents for CF application, 2014
Key Terms
Finance companies have simpler application procedure compared to domestic and foreign
commercial banks
3 3
4 4 4
6
7 7 7 7
0
1
2
3
4
5
6
7
8
HD Saison FE Credit Home Credit JACCS ACS Trading Mirae Asset Prudential
Finance
Foreign banks SOCBs JSCBs

Figure 11: Appraisal time, 2014
Key Terms
Source: StoxPlus
Finance companies also process loan application much faster than banks. MobiVi is the fastest in
processing procedure, while Prudential Finance takes the longest time to process
Appraisal time

Key Terms
Source: StoxPlus
Finance companies also process loan application much faster than banks. MobiVi is the fastest in
processing procedure, while Prudential Finance takes the longest time to process (cont’d)
Figure 12: MobiVi cash loans procedure process
Source: MobiVi’s website 2015
Application procedure

Figure 13: Number of covered provinces, 2014
63 63
58
13
3
21
7
3 2
63
47
32
0
10
20
30
40
50
60
70
HD Saison Home Credit FE Credit Prudential
Finance
Mirae Asset HSBC Standard
Charter
ANZ Citi Bank SOCBs ACB Techcombank
Key Terms
In contrary with foreign banks, domestic banks and finance companies provide smaller amount of
loans but tend to nation wide coverage

Detailed key terms: Cash loan products provided by Domestic Commercial Banks
Key Terms
Source: StoxPlus

Detailed key terms: Cash loan products provided by foreign banks
Source: StoxPlus
Key Terms

Detailed key terms: Cash loan products provided by finance companies
Key Terms
Source: StoxPlus

Detailed key terms: POS loan products provided by finance companies
Source: StoxPlus
Key Terms

Source: StoxPlus
Key Terms

Key terms
Source: StoxPlus

Key terms
Source: StoxPlus
Cash loans

Contents
2.3 Sales channels
2.5 Payment methods

Point of sales This is the most important sales channel for CF business, since
consumer finance is closely related to the purchase of consumers
for goods and services.
Call Center Finance companies usually use call center to up-sell cash loans to
existing customers, or to acquire new customers using a telesales
database.
Post Office For payments - A number of pure CF players utilize post office
system for their payment disbursement and collection. Only Home
Credit has representatives available in post office, but in southern
of Vietnam
Branches Physical regional offices play a very important for cash loan walk-
in as well.
Direct Sale
Agents
Direct sale agents can be established in-house or outsourced to
third party providers.
Online
Many CF companies are claiming to explore online and mobile
platform such as Payoo for loan repayment as well as sales channels
to increase the efficiency of loan generation , payment and
collection.
Sales channels – Finance Companies
There are currently 5 main sales channels being used by existing CF players, including: POS, call
center, physical office (branches, post office), direct sales agents, and online channels

Sales channels
There are currently 5 main sales channels being used by existing CF players, including: POS, call
center, physical office (branches, post office), direct sales agents, and online channels (cont’d)

Sales channels – Finance Companies
PPF and FE Credit have the most extensive sales channel network

Contents
2.3 Sales channels
2.5 Payment methods

Marketing Campaign
Source: StoxPlus
Domestic commercial banks provide an informative and active marketing campaigns to target customers

Marketing Campaign
Source: StoxPlus
Foreign commercial banks focus on multi-channel information provided to customers

Marketing Campaign
Source: StoxPlus
Marketing campaigns of finance company are developed much better compared to the rest

Contents
2.3 Sales channels
2.5 Payment methods

Banking network Post Office
POS/Branch
es
E-commerce
TOTAL
Account
transfer
ATM Auto Debit Smartlink Payoo MoMo
Home
Credit
4
FE Credit 3
HD Saison 3
JACCS 2
Payment Methods
Prudential Finance have the most diverse payment methods to increase convenience for customers
Source: StoxPlus

Banking network Post Office POS/Branches E-commerce
TOTAL
Account
transfer
ATM Auto Debit Smartlink Payoo MoMo
Mirae Asset
Finance
4
Prudential
Finance
6
Toyota
Finance
3
Payment Methods
Prudential Finance have the most diverse payment methods to increase convenience for customers
Source: StoxPlus

Payment Methods

Section 3: Key Players Profile
Contents
3.1 Local banks
3.2 Foreign banks
3.3 Finance companies
3.4 Others

Section 3: Key players profile
Techcombank
Within 2014, Techcombank served over 48.7 thousand enterprises and 3.7 million individual
customers with total outstanding loans of VND 80,308 billion which accounted for 2.02% of
market share.
Figure 14: Total loans and total assets, 2008 - 2013
Figure 15: Loans breakdown by types of borrowers

VP Bank
With the vision to become one of the five leading joint-stock commercial banks in
Vietnam and 1 of the three leading retail joint-stock commercial banks in Vietnam by
2017, VPB created a five-year strategic roadmap since 2010.

Maritime Bank
In order to target on consumer finance, the Bank planned to acquire Vietnam Textile
Finance Company (TFC) in 2015 and was approved by the SBV

Contents
3.1 Local banks
3.2 Foreign banks
3.4 Others

ANZ Vietnam
ANZ is the most active bank amongst foreign players in consumer finance battle with
diversified products and fastest appraisal processing time – within 24-hour

Citibank Vietnam
Citibank participates into Vietnam consumer finance market with the most attractive
interest rate – 8.5% p.a, the lowest rate in the market.
Source: StoxPlus

HSBC Vietnam
HSBC engaged into consumer finance market with diversified products, both secured and
unsecured loans and the promise of attractive interest rate

Contents
3.1 Local banks
3.2 Foreign banks
3.4 Others

BUSINESS PROFILE PRODUCTS - SALES AND HEADCOUNT
KEY FINANCIAL & OPERATIONAL INDICATORS ROE & ROA OVER THE PERIOD 2011 – 1H2014
License No. 112/GP-NHNN issued on 18/04/2008 by Governor of SBV
Founded Year 2009
Ownership 100% foreign owned (PPF Group N.V. )
Location Ho Chi Minh City
Other Branches 44 other cities and provinces in Vietnam
Products:
Motorbikes Loan Consumer Durable Loan Cash Loan
Home Credit – PPF Vietnam
5,000 points-of-sale established across 63 provinces in Vietnam

Founded Year 2010
Ownership 100% private owned (VP Bank JSC)
Other Branches
1 other branch in HCM City and transaction offices in 63
provinces
No. of staff 13,500
Products:
Motorbikes Loan Consumer Durable Loan Cash Loan
FE Credit
In 2014, FE Credit cooperated with over 3,100 other partners and has
more than 4,000 POS all over the country

Prudential Finance: “walk-in” model with cash loans and mainly focusing on
white-collar workers
License No. 10/GP-NHNN issued on 10/10/2006 by Governor of SBV
Founded Year 2007
Ownership 100% foreign owned (Prudential plc - UK)
Other Branches 01 Branch in Ha Noi and 4 transaction offices in HCMC
Source: StoxPlus, Prudential Finance’ Financial Statements
Prudential Finance Vietnam

Within 8 years, HD Saison has gone through two M&A deals which resulted
the quicken expansion of consumer finance products and its network
License
No. 05/GP-NHNN issued on 08/05/2007 by SBV and Decision
No.2533/QĐ-NHNN on October 30, 2013 to revise the License.
Founded Year 2007
Ownership 50 % owned by HDBank, 49% owned by Credit Saison Japan
Other Branches 01 Branch in Ha Noi and Service in 63other cities and provinces
Source: StoxPlus, HD Finance Financial Statements
HD Saison

AUTO LOAN MARKETBUSINESS PROFILE
Products: Personal Loan: Loan amount is VND190mn at maximum and VND10mn at minimum
with duration from 12 to 48 months. Disbursement is within 48 hours after all
required document is approved.
Targets: People living in HCMC or HN with minimum monthly income of VND3mn.
Source: StoxPlus
License No. 208/GP-NHNN issued on 24 April, 2008 by SBV
Founded Year 2008
Ownership 100% foreign owned (Toyota Financial Corporation)
Other Branches Available at all 33 Toyota authorized dealers in Vietnam
Toyota Finance Vietnam
Toyota Finance Service Vietnam showed an growing trend but the auto market in Vietnam
is still underdeveloped.

License No. 90/GP-NHNN issued on 13/04/2010 by Governor of the SBV
Founded Year 2010
Ownership 100% foreign-owned (JACCS Japan)
Source: StoxPlus
JACCS Vietnam
Due to the expanded operation of other finance companies, such as HD Saison or FE Credit,
JACCS seemed to be lose its competitive advantage in motorbike market

Different from the rest of finance companies, MAFC divided its products in term of
customer’s occupations.
BUSINESS PROFILE PRODUCTS DESCRIPTION
License
No. 250/GP-NHNN issued on 11/11/2010 by Governor of the
SBV
Founded Year 2010
Ownership 100% foreign-owned (Mirae Asset Capital)
Source: StoxPlus
• Employee cash loan: Cash loan from VND3mn to
VND300mn for expenditure needs , shopping... with
the tenure of 6 to 24 months . Interest rate raging
from 18% to 22%/year.
• Online Cash Loan: Provided through loan purchases
Finance Company Mirae Asset in the partner stores.
The loan amount varies in less or more than VND7mn.
Down payment is not required.
• Teacher Cash Loan : The loan amount is up to 7 times
of the income. Tenure is ranging from 6 to12,18,24
months with the interest rate of 18 – 23%/year.
• Hospital Employee Cash Loan: for hospitals, clinics
located in HCM city with a loan up to VND200mn,
interest rate of 18 – 20%/year.
• Automobile Loan: The loan is up to 70% car value
with the tenure up to 5 years. The automobile loan
interest rate is 9.99% in the first 3 months then down
to 12.5%/year.
Mirae Asset Finance Vietnam

Contents
3.1 Local banks
3.2 Foreign banks
3.4 Others

ACS Trading Co. is a trade finance company mainly focus on durable goods and two-wheel
vehicles
ACS Trading Co.,
Source: StoxPlus

Section 3: Key player profile
MobiVi
Following the upcoming wave of consumer internet companies, MobiVi has been the
pioneer in this sector by offering the products online instead of traditional approach
Source: StoxPlus
Source: StoxPlus

Contents
Section 4: Major economic context
4.1 Macroeconomic context
4.2 Banking sector context
4.3 Non-bank sector context
4.4 Major policy changes
4.5 Analysis of foreign interests in Vietnam

Macroeconomic context
Vietnam economic has shown early signs of firming up of recovery in 2014.
Source: StoxPlus from General Statistics Office of Vietnam
Figure 20: Vietnam CPI and GDP growth from 2005-2014 (%y –o –y)
Figure 21: Vietnam FDI Disbursement (US$ million) from 2003 - 2014
3.10%
6.78%
4.00%
5.98%15.58%
18.57%
4.29%
0%
5%
10%
15%
20%
0%
1%
2%
3%
4%
5%
6%
7%
8%
CPI GDP Growth
12,005
71,727
20,230
4,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
US$million
FDI disbursed FII

465,381580,710
726,113
968,067
1,197,480
1,561,480
2,004,360
2,324,443
2,617,963
2,945,277
3,987,680
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
Consumption has been the driving factor to boost GDP growth
Figure 22: Vietnam Total Retail Sales (Value in VNDbn)
42.3 43
46
53.9
60.5
66.5
75.6
85.4
96.9
109
0
20
40
60
80
100
120
0
20
40
60
80
100
120
140
160
180
200
2008 2009 2010 2011 2012 2013 2014 2015F 2016F 2017F
Total Peronal Disposable Income Total Consumer Expenditure
Total Retail sales
Source: StoxPlus from Economist Intelligence Unit
Figure 23: Vietnam’s total personal disposable income and total household
consumption, 2008 – 2017F

Burgeoning and aspirational middle class as the driving indicators of increasing consumer purchasing
power showing that there is a room for CF business to expand in Vietnam.

Contents

2015 is the last year of banking restructuring plan. Despite many measures are introduced, banks
suffered from a high ratio of non-performing loans.
Figure 24: NPL ratio reported by banks period 2008 – 2014 (%)
Banking sector context
2.17 2.15 2.17
3.3
4.08
3.61 3.25
8.6
0
1
2
3
4
5
6
7
8
9
10
2008 2009 2010 2011 2012 2013 2014
NPL ratio reported by Banks
NPL ratio reported by SBV Special Audit

The government has taken steps to overhaul the financial system and try to boost lending, with
credit growth rising about 12.6 % as of December 2014.
Source: StoxPlus from State Bank of Vietnam
Figure 25: Vietnam Credit Growth from 2001-2014
Source: StoxPlus; KPMG Vietnam Banking Survey 2013
21.4% 22.2%
28.2%
41.5%
19.2%
21.4%
51.4%
30.0%
37.7%
27.8%
12.0%
8.9%
12.5% 12.6%
0%
20%
40%
60%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
GDP Growth CPI Credit Growth
Slow Credit
Growth
21%
14%
11%
1.4% 1.1% 1.0%
-3%
2%
7%
12%
17%
22%
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2011 2012 2013
Profit After Tax ROE ROA
Figure 26: ROE & ROA in Vietnam’s Banking Sector

Retail lending accounts for 34.4% of total loan outstanding, equivalent to US$65 billions at year end
2014
Figure 27: Breakdown loan by types of customers, 2014

Banks are shifting their focus from corporate lending to retail lending
Figure 28: Selected types of customers over the period 2012-2014

Contents

A large number of local finance companies under SOEs are divested from parent due to non-core
business. While foreign participants are strengthening their position.
Non-bank sector context

Domestic banks taking over financial firms is the trend in 2014 and 2015. Banks are also applying for
new finance company licenses.
Local finance company
Acquired Commercial
Bank
Plan Status
EVN Finance JSC An Binh Bank 2015 Not Yet
Vietnam Chemical Finance
JSC - VCFC
Techcombank 2014 Done
Vinaconex-Viettel Finance
JSC - VVF
Saigon-Hanoi Bank 2014 Done
Vietnam Textile and
Garment Finance Joint
Stock Company
Maritime Bank 2014 Done
Cement Finance JSC millionitary Bank 2014 Not Yet
Coal and Mineral Finance
JSC
VP Bank 2014 Done
Figure 29: Example of marriage between local financial companies and
commercial banks
Non-bank sector context
Source: StoxPlus

Contents

Decree No.39/2014/ND-CP allows finance companies to engage in credit card business
Major policy changes

Major policy changes
SBV is considering a new Circular which requires banks to set up a separate finance company to
provide consumer credit
Applied Participants
• Finance Companies
• Individual Customer
• Related institutions
Allowed activities
• Loan installment
• Card Overdraft
• Product Voucher
Restricted activities
• House Equity
• Housing Construction loan
Interest rate
• Flexibility
• Rate for overdue loan is not over 150%
of the previous rate
Application Form
• Identification Card
• Permanent Residential Book
• Utility’s Bill
• Request form for loan
System required
• Internal Credit Rating
• Risk Management Experts
Figure 30: Summary of Draft circular on Consumer Finance
activities issued by SBV in 2014
Source: StoxPlus

Contents

Foreign financial institutions are actively looking for finance company license or applying for a new
license
Foreign interests in Vietnam CF sector

Foreign investors are most likely to invest in the existing finance companies, or partnering with a
local bank with finance company licenses who needs partner with CF expertise
Foreign interests in Vietnam CF sector

Section 5: Market Potentials and Challenges
Contents
5.1 Key growth drivers
5.2 Emerging Product Trends
5.3 Main Challenges

Vietnam has a young population structure with rising income. This demographic characteristic provides
many opportunities for consumer finance to develop further
Section 5: Market potentials and Challenges
Key growth drivers
Figure 32: % of Vietnam urban population over the total
Source: MOC, National Urban Development Program for the Period of 2012-2050
5 4 3 2 1 0 1 2 3 4 5
0 - 4
5 - 9
10 - 14
15 - 19
20 - 24
25 - 29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 - 64
65 - 69
70 - 74
75+
80 - 84
85+
million
Male Female
Figure 31: Vietnam’s Age Pyramid 2014
Source: GSO

The market share of modern retail in Vietnam in 2014 is about 25% of the total retail sales. More
foreign retailers are planning to enter the market
Key growth drivers
Figure 33: Expansion plan of Vietnam retailers
Source: StoxPlus

The market share of modern retail in Vietnam in 2014 is about 25% of the total retail sales. More
foreign retailers are planning to enter the market (cont’d)
Key growth drivers
Figure 34: Top retailers by number of outlets in Vietnam
Source: Euromonitor

Vietnam has a big unbanked population while banking infrastructure is yet to meet the demand.
Consumer finance companies can target this unbanked population.
Figure 35: Population with and without bank accounts, 2014
Source: StoxPlus estimates from World Bank
Key growth drivers
Figure 36: Banking infrastructure network, 2014
Source: StoxPlus analysis from SBV

E-Commerce Sales in Vietnam is reported to hit US$2.9bn at the end of 2014. Both foreign and
domestic companies are eagerly expanding their e-commerce business
Key growth drivers
Top 5 e-commerce websites in Vietnam
No Name E-commerce Portal
Alexa
Ranking
1 Lazada www.lazada.vn 38
2 Sendo www.sendo.vn 168
3 Zalora www.zalora.vn 180
4 Tiki www.tiki.vn 204
5 Muachung www.muachung.vn 126
Figure 37: Vietnam B2C E-commerce sales in USD millions, 2011 - 2015
Figure 38: Top 5 E-commerce website in Vietnam 2014
Source: VECITA 2014
0.20
0.70
2.20
2.97
4.00
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2011 2012 2013 2014 2015*
Source: VECITA reports

Contents
5.3 Main Challenges

Cash loan is the new trend for finance companies.
Emerging product trends
Figure 39: Mirae Asset’s cash loan product features
Source: StoxPlus from Mirae asset’s website

Mobile wallet is expected to continue to gain momentum as well as mobile expected to reshape
payments industry for years to come
Emerging product trends
The draft Circular on intermediary payment services classifies e-payment
/ e-payment services into 06 different licenses:
1) E-payment infrastructure services
• Financial Switching service
• Intermediary Electronic Clearing service
• Electronic Payment Gateway
2) Transaction support services
• Collection and Money Advance Support service
• Money Transfer Support service
• E-wallet service
No E-wallet company Flatform
1 Viet Phu Payment Services JSC (MobiVi) MobiVi
2 Viet Union Payment Services JSC (VietUnion) Payoo
3 Vietnam Payment Solutions JSC (VNPay) VnMart
4 Card Service Smartlink (Smartlink) Smartlink
5 Vietnam Payment Technology JSC (VinaPay) Vcash
6 Peace Soft Solutions JSC (Peacesoft) Nganluong
7 Online Mobile Services JSC (M-Service) m-Service
8 VNPT Payment Services JSC (VNPT EPAY) VNPT EPAY
9 Electricity and Telecom Payment Services JSC (ECPay) E-Dong
10 VinaPhone MoMo
11 Vi Viet Payment Service JSC (Lien Viet Bank) Vi Viet
12 VDC i-Coin
Source: StoxPlus from Vietnam E-Commerce Annual Report, 2011
Figure 40: List of E-wallet platforms 2011

Contents
5.3 Main Challenges

Modern retail has been mostly confined to urban areas. Meanwhile, E-commerce is Vietnam is still in the
infancy stage
Main challenges
60.9
66.7
46.2
26.4
3.8
0 10 20 30 40 50 60 70 80
China
Malaysia
Indonesia
India
Vietnam
China Malaysia Indonesia India Vietnam
Figure 41: Market attractiveness in Asia Retail Market Index 2014
Source: The 2014 Global Retail Development Index by AT Kearney 2014

Other operation challenges that we pointed out in previous reports still remained unresolved in 2015
Challenges and Key Considerations

Appendices
Contents

Appendix 1: Vietnam Retail Banking Capacity Matrix
No Ticker Bank Name Exchange Total AssetsCharter Capital Total Loan Retail Loan %Total Loan
2013
1 ABB An Binh Bank OTC 57,628 4,798 22,993 NA NA
2 ACB Asia Commercial Bank HNX 166,599 9,377 105,642 8,193 0
3 AGRB Agribank OTC 696,781 26,575 518,853 36,188 0
4 BID BIDV HOSE 548,386 28,112 384,890 22,022 0
5 BVB Bao Viet Bank OTC 16,788 3,000 7,856 486 0
6 CTG VietinBank HOSE 576,368 37,234 372,989 6,681 0
7 DCB OceanBank OTC 67,075 4,000 27,756 605 0
8 EAB DongA Bank OTC 74,920 5,000 52,153 5,298 0
9 EIB Eximbank HOSE 169,835 12,355 82,643 10,990 0
10 GDB Viet Capital Bank OTC 23,059 3,000 9,909 NA NA
11 HDB HDBank OTC 86,227 8,100 43,333 976 0
12 KLB Kien Long Bank OTC 21,372 3,000 12,004 686 0
13 LVB LienViet Post Bank OTC 79,594 6,460 28,954 588 0
14 MBB MBBank HOSE 180,381 11,256 85,973 6,141 0
15 MDB Mekong Development Bank OTC 6,437 3,750 3,879 299 0
16 MSB MaritimeBank OTC 107,115 8,000 26,676 NA NA
17 NAB Nam A Bank OTC 28,782 3,000 11,494 299 0
18 NASB North Asia Bank OTC 50,308 3,000 29,245 5,298 0
19 NVB National Citizen Bank HNX 29,074 3,010 13,266 188 0
20 OCB ORICOMBANK OTC 32,795 3,234 19,974 1,837 0
21 PGB PG Bank OTC 24,876 3,000 13,680 890 0
22 PNB Southern Bank OTC 77,558 4,000 41,319 299 0
23 PVF PVcomBank OTC 101,124 9,000 40,016 215 0
24 SCB Saigon Commercial Bank OTC 181,019 12,295 88,350 48 0
25 SEAB SeaBank OTC 79,864 5,466 20,423 1,229 0
26 SGB Saigon bank for industry and trade OTC 14,685 3,080 10,568 232 0
27 SHB SH Bank HNX 143,626 8,866 75,322 NA NA
28 STB Sacombank HOSE 161,378 12,425 109,214 12,321 0
29 TCB Techcombank OTC 158,897 8,878 69,089 15,149 0
30 PB Tien Phong Bank OTC 32,088 5,550 11,809 1,816 0
31 VAB Viet A Bank OTC 27,033 3,098 14,196 2,012 0
32 VCB Vietcombank HOSE 468,994 23,174 267,863 12,790 0
33 VIB VIBBank OTC 76,875 4,250 34,313 4,629 0
34 VPB VPbank OTC 121,264 5,770 51,869 9,427 0

Appendix 2: Vietnam Retail Banking Total Loan Book

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‹#›
If you need further assistance, contact us at:
Hang Pham
Associate
+84 (0) 35626962 (ext. 109)
+84 (0) 904002705
hang.pham@stoxplus.com
Head Office
5th Floor, Indovina Bank Building
36 Hoang Cau Street
Hanoi, Vietnam
+ 84 (4) 3562 6962
Ho Chi Minh Branch
20th Floor, AB Tower,
76 Le Lai Street, District 1
Ho Chi Minh City, Vietnam
+ 84 (8) 3823 3485
Lan Nguyen
Research Manager
+84 (0) 35626962 (ext. 109)
+84 (0) 96 494 6760
lan.nguyen@stoxplus.com

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