Vietnam Consumer Finance - When Crisis Hits: Time to Pivot the Game

Consumer finance (CF) market players finished another challenging year, with the CF loan book of banks and finance companies (FinCos) inching up only 11.3% compared to 2022. Nonetheless, the economy is showing signs of recovery, with enhanced household income and purchasing power along with the revival of manufacturing and export sectors expected to drive credit demand in 2024.

Vietnam's CF landscape has shifted from being concentrated to dynamic and diversified, presenting opportunities for strategic partnerships and equity investments. The difficulties faced by FinCos present opportunities for foreign investors to enter the Vietnamese consumer finance market. While M&A may be limited due to restrictions on new licenses, it remains an option to capitalize on market opportunities.

Overall, Vietnam consumer finance market is still highly promising, driven by a low penetration rate and favourable demographic factors. Investors should carefully assess the landscape, considering the challenges and opportunities presented by FinCos' circumstances.

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