Vietnamese is Skeptical about Lending Money from Bank

 

This is the first study to take a closer look at the personal finance behavior of Vietnamese citizens. It was conducted with a 1,000 person aged between 18 to 50 years. The survey was carried out from 15 to 30 September 2006 through face-to-face interviews with randomly picked respondents in Hanoi and Ho Chi Minh City. 

 

Some of the key findings in the report are surprise. With only 50 percent of respondents in Hanoi and 31 percent in Ho Chi Minh City having bank accounts, Vietnam has a very low bank account penetration.

 

According to the report, 21 per cent of respondents claimed awareness of credit cards; while 8 percent were aware of debit cards and 91 per cent were aware of ATM cards. Most Vietnamese citing a preference for borrowing from families and friends and respondents consider gold and foreign currency as the “safest” investment. More than half the respondents familiar with payment cards saw Visa as the leading brand of international payment cards.

 

 “It is interesting to view the results the PFM has brought us and it will be fascinating to watch the way in which this changes as Vietnam develops,” said Stuart Tomlinson, country manager for Vietnam, Cambodia and Laos, Visa International Asia Pacific. The findings point to a lot of work that needs to be done in educating Vietnamese citizens about financial management, trusting an increasingly banked economy and improving their attitudes toward payment with cards and personal credit.

 

Generally speaking, people will open current or savings accounts before broadening their banking needs with payment cards. Therefore the relatively low knowledge of payment cards is a logical follow-on from the low acceptance of banking products. 

 

58 per cent of respondents indicated that they simply do not have enough money to warrant holding a bank account. This is an interesting finding considering this survey was taken among wealthier, asset holding Vietnamese, Stuart Tomlinson concluded.

 

It still seems that a majority of people in the higher social-economic classes, who in other countries would be relying on banks, simply do not yet see a need to keep their money in bank accounts, citing a lack of security as a prime reason for this reluctance.

 

However, there are some extremely positive signs in this data. The very high ATM card (91 per cent) awareness is a step in the right direction toward getting Vietnamese people to pay with cards and to associate cards with payment. And of course, seeing Visa prevail as the best known of the payment card providers is certainly very gratifying.

 

Mr. Chris Morley, Managing Director of ACNielsen Vietnam said, “We have undertaken Vietnam’s pre-eminent exploration of personal finance habits and the findings will be a very valuable tool for Vietnamese banks seeking to better understand their customers’ motivations, preferences and future requirements when it comes to savings, investments, payment cards, lending and borrowing”.

 

According to the report, borrowing from banks is not yet a common practice in Vietnam, with only two percent of customers surveyed having borrowed from a financial institution, preferring instead to borrow from friends and family.

 

The misconception in Vietnam that is very complicated to borrow from a bank and that interest rates charged by the banks are restrictive, so people prefer to save for major purchases and pay in cash, or otherwise borrow from friends or family to avoid interest repayments, asset declaration or red tape from the financial sector.