Driven by a "significant" change in Vietnamese borrowing behavior and high demand for housing loans, loans in Vietnam's consumer finance market rose 44.1 percent to US$15.12 billion in 2015, according to new data.
It was the highest growth since 2011, as Vietnamese have been turning to finance companies instead of relying on their relatives, friends or informal finance market to lend them money for spending on goods and services, local market research company StoxPlus said in its recent report.
Low interest rates offered by consumer finance companies were another positive impact on the market, it said, adding that a majority of the loans were spent on buying and improving houses.
As Vietnam's consumer finance market is growing strongly, it has also become more competitive with the participation of more players, according to StoxPlus.
The number of banks-backed consumer finance companies increased to six at the end of last year, following four acquisitions executed by local banks such as Maritime Bank and Techcombank, it said.
The competition among finance companies in Vietnam has also been fueled by the limited number of points of sales, the report said, citing an example of services provided by FE Credit, Home Credit, HD Saison and ACS being available in one electronics store.
More than 20 consumer finance companies operated in Vietnam, including six foreign-owned ones, by the end of the third quarter of last year, local media reported.