Financial leasing began to appear in Vietnam in 1998 and has since become diverse in terms of leasing assets such as machinery, equipment and automobiles. (Photo: VNA) Hoe said that financial leasing has high potential in Vietnam’sdynamic economy with more than 800,000 enterprises and more than 5 millionbusiness households.
He cited statistics that the ratio to GDP remained modest at 0.4%,compared to 22% in the US and 18% in China.
More than 90% of small and medium sized enterprises in developedeconomies like the US, Japan and the Republic of Korea used financial leasingfor production lines and equipment. The global outstanding loans are estimatedat more than 1.4 trillion USD.
Although global uncertainties cloud the economic outlook, thereare opportunities for financial leasing from stable macroeconomies, hastenedpublic investment disbursement, green economy, circular economy and emergingindustries, which pushed up demand for capital leasing, Hoe said.
As Vietnam remains an attractive destination for foreign directinvestment (FDI) companies accustomed to financial leasing services, there issignificant room for growth.
The amended Law on Credit Institutions, coming into force from thebeginning of July, will provide a legal framework for the development offinancial leasing services, Hoe said, adding that outstanding loans offinancial leasing are projected to expand at 20% to around 45 trillion VND bythe end of 2024.
Financial leasing is considered an optimal method of helpingbusinesses access capital without mortgaging assets. However, enterprises in Vietnamare not familiar with financial leasing, Hoe said.
To promote the development of financial leasing, Hoe said it isnecessary to improve the legal framework with detailed regulations about whocan access financial leasing services and safety ratio for risk management.
A decree guiding the implementation of financial leasing servicesin line with the amended Law on Credit Institutions must be completed andissued early.
Financial leasing began to appear in Vietnam in 1998 and has sincebecome diverse in terms of leasing assets.
A financial leasing is a type of commercial lease in which afinance company is the legal owner of an asset, and the user rents the asset.
Six VILEA member companies currently have total assets worth morethan 41 trillion VND, a rise of 10.65% compared to the end of 2022. The totalraised capital reached 19.8 trillion VND, an increase of 25.76% – the ratewhich doubled the credit growth rate of the banking system.
The total outstanding loans of member financial leasing companieswere estimated at 37.2 trillion VND, up by 13.75% against the end of 2022, withmore than 8,400 contracts.
Leasing services are diverse with the most popular assets beingautomobiles, construction and mining machineries, medical devices andproduction lines.
Specially, the ratio of bad debt is controlled at below 1%./.
VNA
