Along with strictly controlling credit for stock and realestate investments, banks are tightening requirements on consumerunsecured loans in order to limit risk due to bad debts.
In order to secure loans from the Southeast Asia Bank (SeaBank) or theLien Viet Joint Stock Commercial Bank (LienVietBank), customers musthave an account at the bank and confirmation of income from theiragencies.
The Asia Commercial Bank (ACB), for its part, has changed its policyfrom only requiring residence certificates and a stable monthly incomeaveraging 5 million VND, to excluding those who rent but do not owntheir housing.
Worried about the risks and difficulties in customer management, somebanks, including the Technological and Commercial Joint Stock Bank(Techcombank) and the Vietnam Export-Import Bank (Eximbank), havedecided to stop extending unsecured loans or have narrowed the limitsof consumer credit, along with shortening lending periods and selectingcustomers more carefully.
These moves by banks are aimed at implementing the State Bank’s policyto tighten consumer lending, which was issued after the debt balance ofconsumer loans in the first six months of the year increased 11.6percent compared with the end of 2008, although the total debt incurredby such loans was a comparatively small amount.
According to Nguyen Duc Huong, LienVietBank General Director, consumerunsecured loans entail many risks due to having no guaranteed property,but it’s a market with great potential for financial companies andbanks if carefully managed, especially when macro policies are aimed toaccelerate economic development.
Sharing the same view with Huong, Tran Minh Khoa, Director in charge ofIndividual Customers at Eximbank said that in banking activities, thebank’s largest risk comes from unsecured loans, which are, in any case,always risky. It’s important for banks to have effective managementmeasures to deal with such loans./.
In order to secure loans from the Southeast Asia Bank (SeaBank) or theLien Viet Joint Stock Commercial Bank (LienVietBank), customers musthave an account at the bank and confirmation of income from theiragencies.
The Asia Commercial Bank (ACB), for its part, has changed its policyfrom only requiring residence certificates and a stable monthly incomeaveraging 5 million VND, to excluding those who rent but do not owntheir housing.
Worried about the risks and difficulties in customer management, somebanks, including the Technological and Commercial Joint Stock Bank(Techcombank) and the Vietnam Export-Import Bank (Eximbank), havedecided to stop extending unsecured loans or have narrowed the limitsof consumer credit, along with shortening lending periods and selectingcustomers more carefully.
These moves by banks are aimed at implementing the State Bank’s policyto tighten consumer lending, which was issued after the debt balance ofconsumer loans in the first six months of the year increased 11.6percent compared with the end of 2008, although the total debt incurredby such loans was a comparatively small amount.
According to Nguyen Duc Huong, LienVietBank General Director, consumerunsecured loans entail many risks due to having no guaranteed property,but it’s a market with great potential for financial companies andbanks if carefully managed, especially when macro policies are aimed toaccelerate economic development.
Sharing the same view with Huong, Tran Minh Khoa, Director in charge ofIndividual Customers at Eximbank said that in banking activities, thebank’s largest risk comes from unsecured loans, which are, in any case,always risky. It’s important for banks to have effective managementmeasures to deal with such loans./.
