Banks help low-income earners hinh anh 1Banks offer preferential loan packages with a focus on home purchase loans and consumer lending. (Photo:

Hanoi (VNA) - Commercial banks and financial companies are competing fiercely for a slice of the profitable personal-loan market as demand often rises sharply at the end of the Lunar New Year.

Industry insiders said the month before Tet (Lunar New Year) holiday, which will fall on February 14 this year, was always the most popular period for personal loans, as Vietnamese people needed money for home repairs, shopping and car purchases.

With the aim of meeting the rising demand, many banks are offering preferential loan packages with a focus on home-purchase loans and consumer lending.

Orient Commercial Bank (OCB), for example, has currently launched its own programme COM-B, which provides financial solutions for low-income customers. Accordingly, customers who earn above 2 million VND (88 USD) monthly can easily borrow COM-B of up to 70 million VND.

Truong Dinh Long, OCB’s vice-chairman, told Tin nhanh chung khoan (Securities Express) that although the consumer finance market had developed considerably in recent years, the niche market for low-income individuals was still overlooked.

Targeting on this market, COM-B continuously provides consumer finance products for low-income people with simple procedures and fast processing time.

Meanwhile, Asia Commercial Bank (ACB) has also introduced a home-purchase package worth 5 trillion VND (220 million USD), meeting the demands of more than 27,000 customers.

ACB is also offering a total loan of 10 billion VND (440,000 USD) for small- and medium-sized enterprises at an interest rate of 6.8 percent per annum.

Tu Tien Phat, vice-chairman of ACB, said this programme aimed to give manufacturing enterprises a source of preferential loan, helping them to cut down costs of production and to stabilise market prices for the upcoming Tet.

VPBank is also applying a programme on home purchases at an interest rate of 6.9 percent per year. Value of the loans can reach 10 billion VND with lending term of up to 25 years.

According to figures from the National Financial Supervision Commission, consumer lending surged dramatically in 2017, in which home repair and purchase loans accounted for nearly 53 percent of the total outstanding consumer loans.

Banking experts attributed this surge to housing prices and interest rates, which are at an acceptable level. In addition, banks continually promote home loans through several preferential programmes, such as cutting down interest rates or extending loan terms.

However, experts also said that to attract more customers in the long run, banks needed to improve their technology, hire quality employees, diversify channels and focus on risk management.-VNA