Ministry warns about online lending apps
Ministry warns about online lending apps
The Ministry of Public Security has warned about the risk of black credit provided by online lending applications which could threaten social security.
Online lending apps provide trust-based loans in which the borrowers do not need mortgage assets. Transactions were conducted online via websites, online exchanges and apps installed on smartphones.
The borrowing and lending process through the apps was very easy, as people who want to borrow money only have to complete some simple registration procedures including downloading the app, filling in personal information including an account number to receive money, uploading a photo and identity cards, and allowing the app to access their personal contacts.
However, the ministry warned that many lending apps turned out to be a form of black credit with cut-throat interest rates, which might have unintended consequences and affect social security.
The ministry urged borrowers to study online lending providers together with contract terms carefully to avoid risks.
Viet Nam was developing a sandbox for financial technologies, including peer-to-peer (P2P) lending, which was critical to ensure fintech development remains on track.
There are around 40 companies providing P2P lending services in the country.
