Tuoi Tre is reporting on the phenomenon of borrowers forming groups for tips on advice on how to avoid repaying loans. This phenomenon is attributed to a crackdown on loansharking activities, particularly threatening customers with violence or confiscating personal belongings in lieu of payment. It is mostly focused on short-term or pay-day loans that have no collateral and can be taken out via a mobile app or online.
Why it matters: Vietnam’s finance sector is still relatively nascent compared to those in developed markets. Legal pay day loans or short-term borrowing businesses are fairly new and Vietnam still looks to be figuring out how to use these products and what role they might play in its finance sector. Note, however, that short-term lending has always been present in Vietnam just not legal and often run by questionable actors with repayments enforced by nefarious means.
See also: Consumer loans on the decline in Vietnam, bad debt up