VTIAC – TRAINING ON LAW ON DEBTS SETTLEMENT AND RECOVERY AT CONSUMER FINANCE INSTITUTIONS
On May 5, 2023, at the State Bank of Vietnam of Hanoi Branch, No. 504 Xa Dan, Nam Dong Ward, Dong Da District, Hanoi City, the Vietnam Banks Association in collaboration with the Post And Telecommunication Finance Company Limited (PTF) organized a training course about "Law and compliance in debt settlement and recovery at consumer organizations”. This is the training program for PTF's staff only working as debt collectors. VTIAC has appointed a senior arbitrator, Dr. Nguyen Thanh Nam – Permanent Vice President and General Secretary of VTIAC - as an expert teaching in this training course.
Mr. Nguyen Thanh Son – Director of the Vietnam Banks Association opening the training program
Consumer lending is the lending by a finance company in Vietnam Dong to an individual customer in order to meet the capital demand for purchasing, and using goods and services for personal or family usage, providing that the total outstanding consumption loans of a customer at that finance company do not exceed 100,000,000 VND (one hundred million VND). With common products, simple procedures, quick decision-making to lend, and approaching the group of "subprime" customers without secured assets, finance companies have to face with the risks of a lot of bad debts incurred. Although each debt is not very large (about a few million VND to several tens of millions VND), the total amount is quite large in the proportion of loans. Should there be no thorough debt recovery solution, finance companies will suffer a great loss, even going bankrupt.
In the past time, consumer finance institutions have faced the risk of not being able to recover bad debts due to unsecured loans. In addition, debt settlement measures are limited because those companies mainly just urge and remind consumers about debts. Therefore, in cases where customers are inactive and deliberately fail to fulfill their debt service obligations, finance companies are often quite confused and do not have effective debt recovery solutions.
Existing law provides for a variety of debt settlement measures, including both technical and direct debt collection methods. For disputes arising, the law also stipulates four methods of dispute resolution, including negotiation, commercial mediation, arbitral proceedings, and judicial proceedings. The legal corridor is quite open and diverse; however, debt collectors as well as finance companies must do right and appropriately to ensure both the highest efficiency of debt recovery and compliance with laws.
Dr. Nguyen Thanh Nam - Permanent Vice President cum General Secretary of VTIAC giving the lecture
With many years of legal experience as a lawyer, an arbitrator, and an expert in bad debt recovery, Dr. Nguyen Thanh Nam shared a lot of knowledge and real situations. Thus, the trainees could grasp the necessary skills in the process of debt collection, including the correct application of the law about debt settlement methods and using them flexibly to achieve the highest efficiency in debt recovery.
Dr. Nguyen Thanh Nam took a photo with some students
Recently, the police have conducted administrative inspections of debt collection activities at a number of finance companies such as HD Saigon Finance Co., Ltd, EVN Finance Joint Stock Company, SHBank Finance Co., Ltd, Shinhan Vietnam Finance Co., Ltd, Home Credit Vietnam Finance Co., Ltd, Finance Company Limited For Community,... This has led to the debt collection activities of many finance companies being seriously affected, confusing staff working there. Therefore, it is so extremely meaningful that the Vietnam Banks Association and PTF organized such a training course on law and compliance in debt settlement and recovery.
Khong Thao.