Chairman of Kim Nam Group: 'Peer to Peer lending services need a Sandbox mechanism'

Nguồn : Doanh Nghiệp

Mr. Nguyen Kim Hung proposed that the State Bank soon allow companies providing P2P Lending solutions (peer-to-peer lending) to be piloted under a Sandbox model. P2P Lending is an appropriate solution to solve capital problems of the SME community.

Mr. Nguyen Kim Hung - Chairman of Kim Nam Group requested a sandbox mechanism for P2P Lending.

At the 12th“ Cooperation - Connection and Enterprise Development” Forum, held in Phu Tho provinceon December 18, 2019, Mr. Nguyen Kim Hung, Deputy Director of Institute ofBusiness Administration Science for Small and medium-sized enterprises (SISME)made recommendations on the application of technology in improving the qualityof SMEs. Mr. Nguyen Kim Hung is also the Chairman of Kim Nam Group's Board ofDirectors.

P2P Lending services need a Sandbox mechanism

Currently, with IR 4.0, many forms of peer lending have been developed in the world and Vietnam. Different from traditional lending and borrowing through banks asfinancial intermediaries, P2P Lending is a form of direct lending betweeneconomic sectors, through the connection of an IT company.

Mr. Nguyen Kim Hungproposed that the State Bank soon allow companies to provide P2P Lendingsolutions (peer-to-peer lending) under a Sandbox model to maximize the capital source for SMEs.At the same time, the government soon issue regulations on P2PLending to create legal standards for P2P activities.

P2Plending originated in England in 2005 (Zopa company) and quickly spread to theUS in 2007 (Lending Club), then significantly exploded when China joined the market with thousandsof companies. By 2017, the total money flow through Chinese P2P companiesreached $192 billion. However, due to the problem of fake P2P activities, China hasundergone a major surgery which reduces the number of legal P2P companies to2-digit. In Southeast Asia, P2P lending appears in many countries likeIndonesia, Singapore, Malaysia, Thailand and Vietnam.

P2P Lending cluster has been growing significantly in Vietnam.

In Vietnam, beforeP2P Lending was present and developed relatively widely, it was necessary tomention the presence of P2P wave in taxi services like Uber, Grab, and rentalapartments services like AirB&B. Sharing economy contributes to increasingpeople's awareness of this new economic model.

According tostatistics by June, 2019 of the State Bank, the total P2P Lending debt inVietnam was approximately 65,000 billion VND (equivalent to 1 medium bank inVietnam) and is still growing strongly. So far, about 40 companies in Vietnamhave provided loans under this model, but most of them have not been managedproperly with transparency, so they still have many shortcomings.

Among manycompanies investing in P2P, VERIG has provided the most comprehensive solutionto the society. The VERIG Platform, an ecosystem that is considered as a smartcity for SMEs, shared by the SME community and member of VINASME.

VERIG Platform is ahigh-tech tool which provides digital solutions for Supply Chainapplication, B2B and helps businesses find bottlenecks on capital andadministration. At the same time, VERIG Platform connects and builds acommunity for SMEs to work closely with each other and share resources.

Currently, the Governmenthas just approved the sharing economy model and assigns the State Bank to research and developa pilot management mechanism scheme for Fintech activities, in which P2P playsan important role. Based on this, the State Bank submitted to the government aSandbox Project to test the P2P model from which to draft a P2P Lendingoperating model.

SMEs lack of financial sources, although banks have done many solutions.

SMEs desperatelyneed solutions for their capital needs.

Mr. Nguyen Kim Hung also raised several difficulties of SMEs and startups, including financial capital.

Currently, theaverage size of private enterprises is becoming small and less competitive inthe context of global integration and competition. The contribution of SMEs to national export activities is also much lower than other economic sectors.

One of thedifficulties is the regulations on business conditions. A small and medium - sized company normally has to go through many administrative processes regarding facility, specialized equipment, personnel,working capital, etc. In some cases, the regulations are more complicated for SMEs than FDIs.

The irregulated responsibility of private sector incontibuting to local budget still exists, even tends to increase. Taxes havealways been a burden, a huge financial pressure on private enterprises.

Access to bankcapital is currently not as difficult as it used to be, as commercial bankshave done many solutions to support SMEs. However, enterprises' ability toabsorb credit capital sources is not high, because mortgaged assets are barelyqualified, while financial evidence is weak. On the banks' side, loanprocedures are still complicated, credit products for SMEs are not abundant, sosome businesses cannot find suitable credit products. The discrimination betweenSMEs and other economic contributors is another barrier.

Mr. Nguyen Kim Hungalso said that most startups failed, went bankrupt, stopped operating or wereacquired within the first 3 years of operation due to shortage of credit. Onthe other hand, the US - China trade war has weakened biggest trade partners ofVietnam including the US and China,Vietnamese economy is now influenced. Thelevel of risk involved in the operation of SMEs is thus increasing, while theirability to withstand economic shocks is greatly reduced.

Hoang Lan