Hanoi (VNA) - Commercialbanks and financial companies are competing fiercely for a slice of theprofitable personal-loan market as demand often rises sharply at the end of theLunar New Year.

Industry insiders said the month before Tet (Lunar New Year) holiday, whichwill fall on February 14 this year, was always the most popular period forpersonal loans, as Vietnamese people needed money for home repairs, shoppingand car purchases.

With the aim of meeting the rising demand,many banks are offering preferential loan packages with a focus onhome-purchase loans and consumer lending.

Orient Commercial Bank (OCB), for example,has currently launched its own programme COM-B, which provides financialsolutions for low-income customers. Accordingly, customers who earn above 2million VND (88 USD) monthly can easily borrow COM-B of up to 70 million VND.

Truong Dinh Long, OCB’s vice-chairman, told Tin nhanh chung khoan (SecuritiesExpress) that although the consumer finance market had developed considerablyin recent years, the niche market for low-income individuals was stilloverlooked.

Targeting on this market, COM-B continuouslyprovides consumer finance products for low-income people with simple proceduresand fast processing time.

Meanwhile, Asia Commercial Bank (ACB) hasalso introduced a home-purchase package worth 5 trillion VND (220 million USD),meeting the demands of more than 27,000 customers.

ACB is also offering a total loan of 10billion VND (440,000 USD) for small- and medium-sized enterprises at aninterest rate of 6.8 percent per annum.

Tu Tien Phat, vice-chairman of ACB, said thisprogramme aimed to give manufacturing enterprises a source of preferentialloan, helping them to cut down costs of production and to stabilise marketprices for the upcoming Tet.

VPBank is also applying a programme on homepurchases at an interest rate of 6.9 percent per year. Value of the loans canreach 10 billion VND with lending term of up to 25 years.

According to figures from the NationalFinancial Supervision Commission, consumer lending surged dramatically in 2017,in which home repair and purchase loans accounted for nearly 53 percent of thetotal outstanding consumer loans.

Banking experts attributed this surge tohousing prices and interest rates, which are at an acceptable level. Inaddition, banks continually promote home loans through several preferentialprogrammes, such as cutting down interest rates or extending loan terms.

However, experts also said that to attractmore customers in the long run, banks needed to improve their technology, hirequality employees, diversify channels and focus on risk management.-VNA