After strong efforts to change the game of consumer finance, FE CREDIT has told of its decade-long journey to establish a solid foundation and become the leading company in unsecured consumer loans and credit cards, with more than 50 per cent of the market share.
|FE Credit has served over 10 million customers and works with more than 9,000 partners. Photo: Le Toan |
At last week’s seminar themed “Consumer finance: New vitality of a 10-year development journey”, which was organised by Vietnam Investment Review, Nguyen Thanh Phuc, deputy general director of FE CREDIT, said that entering Vietnam in 2010, FE CREDIT scored success with its first product of the loaning and selling of motorcycles in instalments. When the method became popular with numerous other foreign companies, the company then became the first company to debut a consumer loan service through cash.
FE CREDIT has strived to deliver unique financial products to customers in order to remain ahead of the competition. In 2017, the company realised that despite low customer incomes, demand for non-cash payments as well as online shopping was high. At the same time, e-commerce platforms step-by-step expanded operations in Vietnam. As a result, FE CREDIT was also the first consumer finance company to launch international credit cards in the country.
“At first, people were not unfamiliar with non-cash payments and using a credit card. However, the awareness of people has increased and the company has since issued 2.2 million credit cards,” Phuc said.
FE CREDIT currently provides consumer lending services such as personal loans, two-wheeler loans, consumer durable loans, and credit cards. It has served over 10 million customers, cooperating with more than 9,000 partners across over 19,000 points of sale nationwide.
At the seminar, Phuc explained the difficulties in setting up a successful consumer finance market in the early years. Questions were raised over where the companies could access money to provide loan services when originally they were not permitted to mobilise capital.
“We had to mobilise our first loans from foreign banks. After British Business Bank and Deutsche Bank provided loans to us, domestic banks started to issue loans to us too. At present, we can mobilise loans from 55 foreign and domestic banks, including those from South Korea, Taiwan, and Japan,” Phuc said.
Today, credit organisations and numerous foreign-invested and domestic banks can also provide consumer lending and, in some cases, issue the service under a different method.
Phuc also emphasised the importance of digital transformation in recent years and moving forward. With the concept becoming popular in Vietnam, in the banking sector it was a necessary part of their development journey.
“Previously, it took VND11 billion ($480,000) per month to send notifications to customers by message service. However, using FE CREDIT’s app, the expenditure for this service is currently only VND3 billion ($130,400). This saving is one of the factors impacting interest rates for consumer lending,” he said.
Under FE CREDIT’s forecasts, despite the market seeing the participation of numerous players and different lending methods, the potential for consumer finance is large because 60 per cent of the population is of working age.
The company now has plans to implement credit programmes for agriculture and countryside areas.
“In order to create favourable conditions for consumer finance, FE CREDIT expects that the government will permit consumer lending to develop asymmetrically with the demand of the people,” Phuc said.