A person checks Vietnamese banknotes at a bank. The State Bank of Vietnam has told credit institutions to carefully consider signing cooperation deals with suppliers of peer-to-peer (P2P) lending services. (Photo: Saigon Times) The central bank said in a note sent to credit institutions and foreign bank branches that the booming technology applications have boosted the growth of multiple new products and services, including P2P lending, in recent years. The SBV proposed these credit institutions stay cautious about the tech platforms, explaining that P2P lending is a type of debt financing, allowing people to borrow and lend money without having to go through a financial institution. In Vietnam, some companies have registered to do business as a financial counselor, financial intermediary and P2P lending supplier, but Vietnam currently has no legal framework for P2P lending, according to the central bank. In fact, the digital-technology-based practice offers simplified lending procedures and quick disbursements to borrowers, making it a convenient lending channel. P2P lending is also expected to cope with loan sharks. The central bank, however, stated that P2P lending poses multiple risks for all parties and may lead to unstable socioeconomic growth. Some P2P lending firms have taken advantage of the… Read full this story
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