CARDS & PAYMENTS | Cesar Tordesillas, Vietnam

Low loan demand has Vietnam banks turning to credit cards

Vietnamese banks are focusing at smaller sources of income such as credit card service fees and interest rates on card payments due to sluggish demand for loans.

Industry insiders said the move is a step in the right direction for banks aiming to make up for low credit growth, which was only 1.5 percent through the first half of this year. 

Since August, Vietnamese banks have been encouraging credit card holders to spend more by offering discounts on credit card purchases.

Vietinbank, Vietcombank and Tienphong Bank are among the largest partly-private lenders encouraging credit card spending, while state-owned Agribank and private HSBC Vietnam have also jumped on the bandwagon.

Nguyen Hung, general director of the Hanoi-based TienPhong Bank, told VnExpress the strategy was “like accumulating small change.” But he also said it was working.

The group of customers that use credit cards is small but their contribution to banks’ revenue is not small, he said.

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