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A board shows a consumer lending product of FE Credit. The consumer finance market has large potential in Viet Nam. — Photo enternews.vn

The COVID-19 pandemic is signficantly changing the landscape of the consumer credit market as consumers tend to tighten their budget and pay more attention to healthcare, environment and lifestyle as well as switching to online shopping.

According to Can Van Luc, a member of the National Financial and Monetary Advisory Council, financial companies will reshape their business strategies after the pandemic, depending on changes in consumers’ habits and behaviour.

Specifically, consumers tend to tighten their budget and pay more attention to healthcare, environment and healthy lifestyles. Digital technologies, e-commerce and online shopping are becoming popular in the operation of enterprises and consumption of residents.

“Consumer lending is gradually shifting from traditional methods to using technologies like consumer data, online marketing, online verification through big data, artificial intelligence and direct disbursement to customers’ accounts and electronic wallets,” he said.

A survey by FiinGroup found that the pandemic caused a decline of 25 per cent of the world’s consumer market in 2020, pushing up bad debts by 100 per cent and profits down by nearly 200 per cent.

Market research company Ipsos found that about 80 per cent of surveyed Vietnamese said that their incomes were negatively affected by the COVID-19 pandemic, with 41 per cent seeing a drop of more than 20 per cent. The pandemic also urged consumers to limit using cash and switch to electronic wallets and online payments.

The COVID-19 pandemic is also changing the landscape of the consumer finance market which urges financial companies to move towards consumer trends of cashless payment.

Nguyen Thanh Phuc, deputy director geneeral of FE Credit, said that as the pandemic was under control in Viet Nam, the borrowing demand was predicted to increase. However, the ability to repay was assessed to be lower due to the impact of the pandemic on incomes.

Phuc said that financial companies must be very cautious in evaluating customers.

He is also optimistic about the potential of the consumer market of Viet Nam in the long term, given the country’s anticipated economic growth.

Viet Nam was becoming an attractive destination for production in the global shift, opening job opportunities which would help improve incomes and promote consumer demand, he said.

Phuc expected Viet Nam’s consumer finance market would post stronger growth than other countries in the region with a population of nearly 100 million, 60 per cent of whom had low and medium incomes.

Luc said that the consumer finance market had large development potential with economic growth anticipated at 6.5-7 per cent per year in 2021-30 period and income growth at around six per cent per year by 2020.

The Government also aims to promote the healthy development of the consumer finance market to prevent black credit.

He urged financial companies to diversify products to meet demand.

The outstanding consumer credit was estimated to total VND1.8 quadrillion at the end of 2020, accounting for around 20 per cent of the total outstanding loans in the economy and 2.5 times higher than 2012. — VNS

Among 14 free trade agreements (FTAs) Vietnam has signed, the CPTPP is a new generation FTA with high standards and the highest level of facilitation. Vietnam has been forecast to be one of the members that benefits the most from the deal.

However, the country has experienced challenges in optimizing the FTA because of its modest level of development and competitiveness.

Due to US-China trade tensions and the impact of COVID-19, the global economy fell into crisis last year with interrupted supply chains. Vietnam also suffered an economic downturn. Therefore, after two years of implementation, the benefits from the CPTPP are still to be seen.

Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said that positive results in the two years of implementation include the reform of institutions and administrative procedures.

Explaining the modest benefits so far, Loc said major reasons include the poor competitiveness of Vietnamese enterprises, market instability, and the low capacity of State agencies.

Meanwhile, Nguyen Cam Trang, Vice Director of the Import-Export Department at the Ministry of Industry and Trade, said the CPTPP has helped promote Vietnam’s exports.

However, its market share and export growth to the six partners that have implemented the CPTPP have been low.

She noted that Vietnam’s market share is 3.1 percent in Japan, 1.9 percent in Australia, 1.6 percent in New Zealand, 1.3 percent in Mexico, 1.1 percent in Canada, and 1 percent in Singapore.

Growth in exports to CPTPP markets was 12.2 percent in 2018, 13 percent in 2019, and 12.02 percent in 2020, Trang added.

She said that, in the future, State agencies should enhance their capacity to implement the CPTPP while continuing to complete legal policies, strengthen communications regarding the deal, support macro-, small-, and medium-sized enterprises to improve their capacity, encourage investment in material production, and design measures to reduce logistics costs.

Businesses should also be more active in seeking opportunities from the deal, while changing their mindset and exploring demand in CPTPP markets to design suitable business strategies and plans, she added.

A survey by VCCI showed that about three-quarters of businesses said they will adjust their business plans to optimise the opportunities from the CPTPP and other FTAs.

Source: VNA

A physics major at the Hanoi-Amsterdam High School for the Gifted has received two pieces of good news – acceptance letters from MIT and Princeton University in the US.

Co-hosted by the Israeli Embassy, the Ho Chi Minh Communist Youth Union (HCYU)’s Central Committee and the Hoan Kiem District Peole’s Committee, the event aimed to mark the Earth Day 2021 (April 22).

Invented by Israel, the drip irrigation system helps increase crop yield and quality while using less water per unit of land and reduce environmental pollution.

Speaking at the event, Israeli Ambassador to Vietnam Nadav Eshcar said the present demonstrates Israel’s commitment to supporting Hanoi and Vietnam at large in environment protection and creation of a green and clean living space.

Like other activities Israel is doing globally to respond to the Earth Day 2021, this aims to remind each person of valuable resources on the earth and encourage Vietnamese young people to contribute more to building a clean and green environment for their own future.

Welcoming the act of the Israeli Embassy, Secretary of the HCYU Central Committee Ngo Van Cuong said the event helps raise awareness of environment protection and climate change response among local residents, particularly young people.

Source: VNA