We are delighted to present Vietnam Consumer Finance Report 2017, our fifth issue on this sector. The first issue was released in 2013 which was the first in-depth sector research for consumer finance in Vietnam. Fast forward to this new edition of our report, StoxPlus provided an updated and comprehensive analysis on the industry.
What’s new in this issue? We provide a detailed analysis on the growth of Consumer Finance (CF), including the performance of Banks and CF Companies. Furthermore, a holistic breakdown on performance in different loan sectors of CF Companies is also provided. Based on the analysis, the size, growth and prospect of each loan sector is revealed together with the share performance of players in each sector. The report also sheds light on other aspects of performance of CF Companies such as their customers’ satisfaction (analysed based on our survey on 950 samples in Hanoi, Ho Chi Minh city and Danang), comparing financial performance of key players.The different analyses on these companies’ performance is synthesized in a section investigating current CF models to give a hint on advantages and disadvantages each model may have.
Consumer Loans in Vietnam enjoys high growth in 2016 though slowing down compared to the growth of 2015: The market is still growing but slowing down the growth trajectory in 2015. The peaking of consumer finance market in 2015 was attributed to the growth of real estate sector as it led to the growth of housing/home improvement loan (without collaterals). Therefore, the slowing down growth of CF in 2016 is still a high growth rate compared to other segments in financial services.
New movements from players in the landscape of 2016: FE Credit continues to strengthen its leading position in market share. Home Credit Vietnam keeps a steadier growth track, and is positioned as the second player. HD Saison is aggressively expanding and closely followed Home Credit. Together, these 3 top companies account for 76.3% market share, while the other players compete for the remaining 23.7%.
Which model should CF Companies follow: The aggressor (like FE Credit) or the conservative (like JACCS)? This is a question of business model which we analyzed in details in terms of market share, NIM, NPL, market coverage, and number of products. Each company has their own focus, but it is necessary to balance between gaining market share and managing risk effectively. The two typical examples are FE Credit and Home Credit. FE Credit is able to increase share significantly yet incurring high NPL while Home Credit Vietnam maintains stable growth with low NPL.
Dynamics of Fintech companies: Fintech is a topic that we already covered in the last issue, but it is becoming more and more important to the operations of consumer finance companies as we forecasted. A few of Fintech companies have tapped into consumer landing segment, including Mobivi, Manh Thuong Quan, and Doctor Dong. Although these 3 players are all at early stage, they would set helpful practice for CF Companies to integrate in their existing business to stay competitive in a changing landscape.
New government regulations on CF: Regulation continues to be a key driver for this market. New regulation ensures the transparency and protect consumer rights. Fintech might be the next target for regulators after Decree