Experts advise caution when taking out consumer loans through Zalo Bank
Economists say that easy procedures for loan approval, loan limit granting, and no collateral required... will potentially increase the risk of bad debt.
"Borrow at home, spend comfortably", "reduce 1-2% interest rate for new loan registration"... a series of advertising messages like the above have been sent to customers using Zalo developed by VNG Joint Stock Company (VNG) under the name Zalo Bank, making users wonder about the authenticity and legality of this social network application.
According to the introduction on the homepage of this application, Zalo Bank is an intermediary connecting users with banks and financial institutions.
When registering through Zalo Bank, the customer's electronic profile will be transferred directly to Zalo Bank's financial partners to borrow in the form of unsecured loans, no collateral required, quick disbursement within 15-30 minutes, preferential interest rates...
Through Zalo Bank, users can borrow up to 500 million VND for a maximum term of up to 5 years. Loan interest rates start from only 1.5%/month, equivalent to about 18%/year, disbursed within 24 hours...
Flexible installment payment method, periodic repayment amount including principal and interest according to regulations from Zalo Bank's partner banks.
In addition, Zalo Bank allows users to access loans very easily, just need to prove a stable monthly income to borrow money, without having to mortgage assets or get confirmation from local authorities. This is the most difficult barrier to borrowing conditions for individuals when needing to borrow money from banks.
Zalo Bank also provides a calculation of outstanding balance and repayment period for a loan of 100 million VND over 12 months. Specifically, with a loan interest rate of 15%/year, the fixed monthly repayment amount (including principal and interest) is more than 9 million VND/month.
There are currently 4 loan providers cooperating with Zalo Bank on this application including Shinhan Bank, Easy Credit, Shinhan Finance, FE Credit.
According to Lawyer Nguyen The Truyen (Hanoi Bar Association), Director of Hop Danh - Thien Thanh Law Firm, Zalo is a social networking platform that connects users. Zalo Bank is similar to other Zalo products as an intermediary connecting and advertising with a purpose, targeting groups of users with similar needs, specifically financial services, loans...
However, Lawyer Nguyen The Truyen recommends that customers need to read and carefully understand the information before providing personal data or clicking to borrow money to avoid conflicts that arise and affect their rights.
Similar to other financial websites or applications, users also need to learn carefully to avoid "traps" of online black credit or illegal peer-to-peer (P2P) lending applications.
Currently, according to the regulations of the State Bank, any credit institution that wants to carry out banking activities must be licensed by the State Bank. Therefore, any organization that carries out financial activities such as lending money or mobilizing capital without a license is operating illegally.
According to economic experts, Zalo's provision of consumer loan packages on Zalo Bank in the form of business cooperation with credit institutions is a way to "circumvent" regulations of the State Bank and the law.
Economist Nguyen Tri Hieu said that easy procedures for loan approval, loan limit granting, and no collateral required... will potentially increase the risk of bad debt, greatly affecting the system of credit institutions.
The State Bank representative affirmed that the State Bank did not license the so-called Zalo Bank, meaning that this application is not licensed to operate lending, capital mobilization, and provide financial services on an online platform.
According to the State Bank of Vietnam, the rapid emergence and development of financial technology companies has caused management agencies of countries to face many difficulties and challenges in management and supervision due to risks of money laundering, terrorist financing, risks related to security, safety, information confidentiality, illegal use of personal information, etc.
Therefore, the task for management agencies is to simultaneously ensure the goal of supporting innovation while maintaining the stability and safety of the financial market and supporting economic growth./.