The local market is expected to be worth $44b by 2020.
A growing number of Vietnamese banks are planning to establish dedicated consumer finance arms as they jostle for greater market share of the market which could be worth around $44b by 2020, according to the Vietnam News Agency.
Orient Commercial Bank is mulling the establishment of a wholly-owned subsidiary with $22m (VND500b) charter capital or acquire at least 70% in an existing finance company this year, whilst Southeast Asia Commercial Bank has acquired Posts and Telecommunications Finance Company for nearly $31.3m (VND710b).
Some banks have also resorted to looking for strategic foreign partners after closing deals to buy finance companies.
The consumer finance market is expected to maintain a healthy growth trajectory in Vietnam as consumer lending continues to climb after rising 65% in 2017 from 50.2% in 2016.
The ratio of consumer credit to total outstanding loans in the country's banking system rose from 12.3% in 2016 to 18% in 2017.
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