The microcredit market in Vietnam is experiencing a real boom. Microloan organizations now operate in a completely transparent and legal manner. This eliminates unnecessary unpleasant surprises, makes the service transparent and comfortable. Now it is difficult to find a person who has never taken credit on a card in his life. Consider the reasons for the popularity of microcredit services and their prospects for the future.
Why microloans are in demand
A microloan is a small payday loan. It is given for any needs, without lengthy checks, provision of security, and other guarantees. Microloan organizations, unlike banks, go to meet borrowers with negative credit history, open delinquencies, without official employment. There is no catch – such companies have their own interest, namely, to issue as many loans as possible at a high-interest rate. People have no time to wait for approval from the bank, or banking institutions simply do not approve of applications – in this case, the borrower immediately applies to the organization.
Figures speak better than theory:
- The number of thematic queries like “credit card” or “loan 24/7” in search engines is constantly increasing.
- There are already more than 20 TOP Vietnamese companies. There are also small, little-known, or regional ones.
There is a crisis in the country, the level of income remains the same or falls, and prices rise. People do not have enough money to live from paycheck to paycheck or to cover current needs (make urgent car repairs, buy a new phone instead of a broken one, etc.). That is why they are looking for alternative options for raising funds – for example, they turn to microloan. To take out a bank loan on favorable terms, you need to be an ideal borrower. In the presence of delays in the past and present, low wages, and the absence of official work, it is unrealistic to take a loan from a bank. But organizations are ready to go to the meeting. These are just the main reasons why payday loans are constantly growing in popularity.
Differences between microfinance companies and banks
Microloan organizations are non-banking structures, but during the conduct of their activities, they must rely on regulated legislative norms. We are talking about the civil code, consumer protection, laws on e-commerce, state principles of market regulation. Since the market has been working in a civilized manner for a long time, the government monitors the MFOs represented on it, services are provided only by those organizations that act as transparently and honestly as possible.
At the same time, an online loan has many differences from a standard bank loan. They consist in:
Application process. In a microloan organization, you can submit requests, sign contracts, request a transfer of funds completely remotely. Almost all clients of microfinance organizations are looking for an opportunity to get a credit card – after all, it is simple, convenient, and fast. There are no geographical restrictions – it is enough to have a computer or smartphone with Internet access.
Terms, loan amounts. Microloans are issued for a short period – usually no more than a month, but with the possibility of extension. The maximum limits are 10-15 thousand hryvnia. Banks do not give loans for several days, if you need a financial cushion, apply for a credit card with a limit. Consumer loans are issued for a period of at least six months.
The number of documents. The bank will have to provide all possible guarantees – at least a certificate from the place of work, as a maximum a pledge and guarantors (depending on the amount). This is, firstly, convenient, and secondly, the only real way of lending for students, pensioners, housewives, persons without an official place of work.
In a nutshell – taking a microloan can be much faster and easier than a regular bank loan. The conditions will be favorable, and the terms of consideration of applications will be minimal.
What loans are taken for
According to statistics, Vietnamese people most often issue microcredits for the purchase of household equipment, electronics, utility bills, treatment, purchase of tours, etc. This may not be the entire amount of planned expenses, but only a part (if not enough). Also, a decent part of borrowers is prone to impulsive acquisitions (they liked something, wanted to buy, took a microloan, and placed an order).
In principle, a service can be convenient and profitable if used correctly. Try to take part in promotions, use promotional codes, discounts. Return the debt, not at the end of the term, but a week or two after the signing of the contract. These simple tricks will help you avoid overpaying.
Development prospects
In the future, the microcredit market will only further develop and expand. Borrowers like services for simplicity and affordability, financial institutions are attracted by the possibility of real earnings.
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