Is debt the best solution?

In 2023, the global economic recession caused many Vietnamese workers to lose income, especially freelancers. According to Decision Lab, 30% of workers saw their income decrease by 10-50%; 21% were always in a state of shortage and 56% could only survive for 1 month without financial support. In that dark picture, borrowing is the solution that many people choose.

However, borrowing money from employees is not easy when people around them are also facing similar difficulties. Borrowing from banks or financial companies is the solution that 72% of respondents are willing to choose. However, up to 52% do not believe they can meet the loan conditions, in which proving income and no bad debt are the biggest obstacles. Borrowing from banks is almost impossible because up to 2/3 said they do not have a labor contract or a salary statement - a mandatory condition of the bank.

Debt 1.jpg

In addition, 59% of borrowers want the most from their “creditors” is transparency in interest rates. Next is the loan process, procedures or the name of the “lender”.

Currently, the lending market includes not only banks and financial companies but also people's credit funds and pawn shops... Over the past year, pawn loans have received more attention after the police conducted administrative inspections of many pawn shops nationwide.
After the inspection, many people realized that pawnshops are also a lending field with clear regulations and sanctions and are managed by the state.

“Only borrow when you really need it”

Debt not becoming a burden needs to come from both sides, the borrower and the lender.

For borrowers, they should only borrow the amount of money they need and within their ability to pay. Currently, to encourage borrowers to borrow money, many credit institutions have simplified procedures to make borrowing easier. That is convenient, but if they borrow without calculation, borrowers will fall into a spiral of debt. Therefore, "Only borrow when you really need it" and have a clear repayment plan is the advice that lenders often emphasize.

Debt 2.jpg

For credit institutions, “Responsible lending” is a measure of corporate value. This is also the reason why F88 Trading Joint Stock Company launched a TVC to convey the message of refusing to provide loans for unnecessary purposes such as gambling, entertainment and calling on people not to borrow money indiscriminately to avoid falling into a debt spiral.

“Need” - according to F88's definition is borrowing to invest in production, education, medical treatment or other legitimate work. You should not borrow to satisfy your entertainment or consumption needs, or to exceed your income.

“Borrowing wisely, borrowing for the right purpose, and borrowing within your ability to pay are things that borrowers need to be clearly aware of if they do not want to be stuck in a spiral of debt, whether with banks, finance companies or pawnshops. Then, even if they cannot be at peace with debt, at least the burden will become more bearable,” the F88 representative emphasized.

Part 1: Warning of debt spiral from 'debt busting race'

Bean Linh