Usury rate on the online lending market place can be up to 1,400 percent per year

Lieutenant Colonel Ngo Hong Vuong, Head of Criminal Justice Division, Department of Criminal Police (Ministry of Public Security), said that the application of information technology to usury is considered a change in form, because if adding both fees and interest, the interest rate can be 700 times higher than regulations.
Banks ask for higher credit quota to prepare for peak lending season Banks ask for higher credit quota to prepare for peak lending season
Regulations on re-lending of Government’s ODA loans and concessional loans to be revised Regulations on re-lending of Government’s ODA loans and concessional loans to be revised
Bank lending expected to get out of coronavirus doldrums soon Bank lending expected to get out of coronavirus doldrums soon
2500-4809-1523-8-2953-img-1978-baohaiquan
Many loan ads are posted in residential areas. Illustration: H.Diu

According to Lieutenant Colonel Ngo Hong Vuong, there are four characteristics that identify usury, of which, the two most common are the "exorbitant" lending interest rate and the violent debt recovery behavior.

According to Article 468 of the Civil Code, the maximum interest rate ceiling is 20% (unless otherwise prescribed by law). Article 201 of the Penal Code stipulates that if the interest rate exceeds 5 times the highest interest rate of the civil code (understood as 100%/year), or the illegal profit is VND30 million or more, then the subject will be prosecuted for criminal liability of lending with heavy interest in civil transactions.

“However, the current interest rate in usury is often very high, sometimes up to 300-700%/year. Even some models of online lending are up to 1,400%/year, 700 times higher than the regulations,” said Lieutenant Colonel Ngo Hong Vuong.

Notably, online usury is showing signs of spreading. According to Lieutenant Colonel Ngo Hong Vuong, tricks of Vietnam's usury lenders are distributing, posting leaflets, setting up websites, using social networks, mobile phone applications, posting loan statements that need to meet, no mortgage, simple procedure with loan amounts from VND1 million to several tens of millions of VND.

The suspects also use technologyin the form of online lending and peer-to-peer (P2P) loans with very high interest rates.

The suspects also disguised the act of usury with contracts to circumvent the law and evade the investigation of the police, such as recording much lower interest rates in the contract or writing the interest rate as agreed in another document.

If the debtors do not pay their debts on time, the lenders often use many forms of debt collection such as threats, blackmail, destruction of property, injury, humiliation others, causing trouble at the debtor's place of business, although not to the point of criminal handling, but causing fear, confusion, economic damage, and discrediting the victim.

Especially, they also set up state-licensed debt collection companies, which are in fact criminal gangs hiding among companies and businesses, inviting officials who used to work in legal protection agencies (Police, Procuracy, Courts) to consult on their lending and debt collection activities.

At a recent conference, Deputy Governor of the State Bank Dao Minh Tu said to contribute to limiting usury, especially in rural areas, in addition to the banking industry actively providing credit, it is very necessary to have the synchronous participation of ministries, branches, local authorities and socio-political organizations to raise awareness about usury, to introduce institutions sufficiently deterrent to the subjects participating in usury.

By Huong Diu/Dieu Huong

Related News

Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.
Thanks to timely intervention, the domestic exchange rate has enough room for flexible developments

Thanks to timely intervention, the domestic exchange rate has enough room for flexible developments

VCN - Unlike 2022 and 2023, the exchange rate has been hot since the beginning of 2024. Right after the early- months, the exchange rate has increased by 4.6%, a 3.4 % increase compared to the devaluation of the whole year 2022.
To maintain its billion-dollar export position, forestry and fisheries enterprises propose additional credit limits

To maintain its billion-dollar export position, forestry and fisheries enterprises propose additional credit limits

VCN - Implementing a preferential credit program for the forestry and fisheries sectors is considered one of the practical and effective solutions for these two industries to continue their billion-dollar export target.
Capital flow "hits the target" for businesses to recover

Capital flow "hits the target" for businesses to recover

VCN - Most economic forecasts for 2024 continue to contain many "gray" tones, so one of the Government's orientations is to direct credit flows to production and business sectors, Priority areas and growth drivers. However, in order to stimulate credit flow, you must do so that this flow reaches its target and maximizes its effectiveness.

Latest News

Sustainable fashion presents promising niche market for textile manufacturers

Sustainable fashion presents promising niche market for textile manufacturers

The combination of sustainability and culture will open up more opportunities for Vietnamese textile enterprises to strengthen their position in the global market and capture the promising Nordic fashion market.
VN

VN's car industry to diversify supply chain

While China remains a significant supplier, recent trade data highlights Việt Nam’s efforts to diversify supply to meet industry demands.
Exports of agro-forestry-aquatic products down nearly 5 per cent in January

Exports of agro-forestry-aquatic products down nearly 5 per cent in January

Việt Nam’s export value of agro-forestry-aquatic products was estimated at US$5.08 billion in January, marking a 4.9 per cent decline compared to the same period last year.
Thailand reviews anti-dumping tax on Vietnamese steel

Thailand reviews anti-dumping tax on Vietnamese steel

TRAV recommended that the Việt Nam Steel Association (VSA) notify relevant local manufacturers and exporters to answer the investigation questionnaire within the prescribed deadline.

More News

In the first 15 days of 2025, total import-export turnover reached more than US$34 billion

In the first 15 days of 2025, total import-export turnover reached more than US$34 billion

VCN - Total import-export turnover in the first half of January 2025 reached more than US$34 billion, the trade balance had a deficit of nearly US$2 billion.
Pangasius fetch record price in early 2025

Pangasius fetch record price in early 2025

Currently, larger pangasius weighing over 1.2kg, are selling at VNĐ32,440 (US$1.29) per kilogram, a record high not seen since 2022.
Việt Nam and India trade reached $15 billion in 2024

Việt Nam and India trade reached $15 billion in 2024

Trade relations between Việt Nam and India continue to flourish, with bilateral trade turnover reaching around US$15 billion in 2024.
Việt Nam

Việt Nam's port firms thrive in 2024

Strategic investments and expansions are expected to further enhance the sector’s performance.
Software exporter looks to new pace of growth

Software exporter looks to new pace of growth

FPT Software (F-Soft) Đà Nẵng plans to earn VNĐ3.6 trillion (US$144 million) in exports in 2025 after introducing a third campus at the FPT Complex and signing a strategic deal with the city.
Việt Nam

Việt Nam's exports to EU see impressive recovery in 2024

Việt Nam’s exports to the EU made an impressive recovery in 2024, reaching nearly US$51.7 billion, an increase of $8.08 billion compared to 2023.
Việt Nam–CPTPP trade turnover exceeds $100 billion

Việt Nam–CPTPP trade turnover exceeds $100 billion

The turnover accounts for 13.1 per cent of Việt Nam’s total import-export turnover last year.
E-commerce, a game changer for textile manufacturers

E-commerce, a game changer for textile manufacturers

According to a Việt Nam Textile and Apparel Association (VITAS) report, the proportion of textile businesses adopting e-commerce strategies has increased from 7-8 per cent in 2021, to over 20 per cent by the end of last year.
China remains the largest market for Việt Nam’s cassava and cassava products

China remains the largest market for Việt Nam’s cassava and cassava products

China accounted for 92.85 per cent of the total export volume and 91.77 per cent of the total export value, amounting to 2.43 million tonnes worth $1.06 billion.
Read More

Your care

Latest Most read
Sustainable fashion presents promising niche market for textile manufacturers

Sustainable fashion presents promising niche market for textile manufacturers

The combination of sustainability and culture will open up more opportunities for Vietnamese textile enterprises to strengthen their position in the global market and capture the promising Nordic fashion market.
VN

VN's car industry to diversify supply chain

While China remains a significant supplier, recent trade data highlights Việt Nam’s efforts to diversify supply to meet industry demands.
Exports of agro-forestry-aquatic products down nearly 5 per cent in January

Exports of agro-forestry-aquatic products down nearly 5 per cent in January

Việt Nam’s export value of agro-forestry-aquatic products was estimated at US$5.08 billion in January, marking a 4.9 per cent decline compared to the same period last year.
Thailand reviews anti-dumping tax on Vietnamese steel

Thailand reviews anti-dumping tax on Vietnamese steel

TRAV recommended that the Việt Nam Steel Association (VSA) notify relevant local manufacturers and exporters to answer the investigation questionnaire within the prescribed deadline.
In the first 15 days of 2025, total import-export turnover reached more than US$34 billion

In the first 15 days of 2025, total import-export turnover reached more than US$34 billion

VCN - Total import-export turnover in the first half of January 2025 reached more than US$34 billion, the trade balance had a deficit of nearly US$2 billion.
Mobile Version