Borrowers 'skip' debt en masse, some finance companies' bad debt jumps to 20%

The above information was announced by Mr. Nguyen Quoc Hung, General Secretary of the Banking Association at the Workshop "Resolving difficulties in consumer lending - Repelling black credit" held on the morning of October 31 in Hanoi.

Mr. Hung said that as of August 31, the outstanding loans for living needs (consumer loans) of 16 financial companies were VND135,945.36 billion (accounting for more than 5% of outstanding consumer loans of credit institutions). The fact that bad debts of financial companies are increasing is a warning bell about the situation of borrowers not being serious about repaying their loans.

According to the representative of the Banking Association, in addition to the objective factors with common difficulties, there are also subjective and very dangerous factors that have not been dealt with. That is, customers intentionally do not pay their debts, the previous person advises the next person not to pay their debts, even when company officials come to collect debts or remind them to pay, they oppose, denounce, and slander the officials as using aggressive measures...

“Some people took advantage of the management agency’s crackdown on black credit crimes and deliberately labeled consumer finance companies licensed by the State Bank as black credit organizations, so they did not pay their debts and established debt default groups on Zalo, Facebook, etc., but were not punished,” said Mr. Hung.

According to Mr. Le Quoc Ninh, General Director of Mcredit Finance Company, in 2023, due to unfavorable market conditions, the situation for finance companies is not very bright. In the first half of 2023, outstanding loans of finance companies decreased significantly, down 5.1% compared to the same period in 2022 and 10.2% compared to the end of 2022.

According to a report by Fiin Group, bad debt of financial companies increased from 10.7% at the end of 2022 to an average of 12.5% at the end of June 2023.

To limit bad debt for financial companies and push back “black credit”, Mr. Le Quoc Ninh proposed to study the legal corridor for professional debt handling activities; apply a separate bad debt threshold for financial companies.

In addition, the situation of "black credit" disguised as consumer loans, even impersonating banks, financial companies, etc. makes it difficult for borrowers to distinguish between financial companies licensed by the State Bank and black credit.

" Black credit" is continuously destroyed

According to Major Nguyen Ngoc Son, Deputy Head of Division 6, Criminal Police Department, Ministry of Public Security, in 2022, the Ministry of Public Security prosecuted 90 cases with more than 400 defendants for loan sharking. Among them are many gangs, subjects operating in high technology (lending via apps), and there are also subjects who are foreigners hiding under the guise of companies registered by Vietnamese people to operate "black credit". In fact, the subjects lend money at interest rates of up to thousands of percent per year.

The Ministry of Public Security has cracked down on a number of cases in which subjects disguised themselves as law firms and debt trading companies to collect debts but in reality were appropriating the borrowers' assets.

In the coming time, the Ministry of Public Security will continue to coordinate with relevant units to deploy solutions to prevent, detect and stop “black credit”. In particular, promoting propaganda about the consequences of “black credit” in the media.

The Ministry of Public Security will also speed up the process of cleaning up population data, eliminating junk SIM cards, fake accounts, and authenticating user information on social networking platforms.

Source