Consumer credit in Vietnam from 2019 to 2023: Current situation and recommendations

Abstract

Consumer credit is a crucial sector within the financial system, contributing to economic growth and improving quality of life. In Vietnam, consumer credit has grown by an average of 20% over the past five years. However, it still faces challenges such as bad debt rising, the growth of informal credit, and unofficial lending platforms, which pose risks to the financial system. This article uses documents analysis and comparative research to assess the state of consumer credit in Vietnam from 2019 to 2023, highlighting achievements such as the expansion of formal credit while pointing out limitations, particularly the increase in bad debt among financial companies due to ineffective management and lack of transparency. Based on the analysis, this article offers recommendations to enhance oversight, improve the regulatory framework, and develop flexible and secure credit products to foster sustainable consumer credit growth, contributing to financial inclusion in Vietnam in the context of globalizations.