Hanoi (VNS/VNA) - The COVID-19 pandemic is significantly changing thelandscape of the consumer credit market as consumers tend to tighten theirbudget and pay more attention to healthcare, environment and lifestyle as wellas switching to online shopping.

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

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

“Consumer lending is gradually shifting from traditional methods to usingtechnologies like consumer data, online marketing, online verification throughbig 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 percent ofthe world’s consumer market in 2020, pushing up bad debts by 100 percent andprofits down by nearly 200 percent.

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

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

Nguyen Thanh Phuc, deputy director geneeral of FE Credit, said that as thepandemic was under control in Vietnam, the borrowing demand was predicted toincrease. However, the ability to repay was assessed to be lower due to theimpact 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 Vietnam inthe long term, given the country’s anticipated economic growth.

Vietnam was becoming an attractive destination for production in the globalshift, opening job opportunities which would help improve incomes and promoteconsumer demand, he said.

Phuc expected Vietnam’s consumer finance market would post stronger growth thanother countries in the region with a population of nearly 100 million, 60 percentof whom had low and medium incomes.

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

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

He urged financial companies to diversify products to meet demand.

The outstanding consumer credit was estimated to total 1.8 quadrillion VND atthe end of 2020, accounting for around 20 percent of the total outstandingloans in the economy and 2.5 times higher than 2012./.