The end of the year is always the time when people's demand for consumer loans is at its highest. However, some statistics show that the demand for consumer loans in 2023 is showing signs of decline.
Specifically, according to data from the Vietnam Banks Association (VNBA), total outstanding loans in the first 3 quarters of 2023 increased by only 1.5% over the same period. The disbursement rate for consumer loans reached the lowest level in the past 5 years.
Consumer loans recorded a decline in late 2023 (Photo TL)
Consumer lending increased by only 1.4% as of the end of October 2023, compared to a 19% growth in the same period last year. Most of the outstanding consumer loans were used for home purchases, repairs, and real estate transfers.
In Ho Chi Minh City, 65% of outstanding consumer loans by the end of October 2023 will be for home purchases, home repairs, and real estate transfers instead of regular personal consumption.
According to Vietcombank Securities (VCBS), home loans have been the main growth driver of the retail segment for many years but have slowed down in 2023. The reason is due to high anchor interest rates and the freezing of the real estate market. Outstanding home loans across the system at the end of the third quarter of 2023 even decreased by 1% compared to the beginning of the year.
In fact, retail lending activities used to be highly focused by banks. However, along with the development of this service segment, the amount of bad debt in consumer loans has increased from 2% in the period 2018 - 2022 to 3.7% in the second half of 2023.
VCBS data also shows that some banks have temporarily postponed their retail market expansion activities to adapt to the current situation. The proportion of retail credit to total outstanding loans has decreased from 47% at the end of 2022 to 46% at the end of the third quarter of 2023.
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