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Ho Chi Minh City - January 15th 2007
Visa International, the world’s leading provider of payment card systems and ACNielsen the global leader in market research, announced the findings of their first Vietnam Personal Finance Monitor (PFM). The PFM is Vietnam’s leading report into the state of the money habits of people in Vietnam.
Sampling an audience of social-economic classes A,B & C and some of the key findings of the report include:
- Very low bank account penetration, with only 50% of Hanoi and 31% of Ho Chi Minh City residents in SECs ABC having bank accounts.
- 21% awareness of credit cards, 8% of debit cards, 91% awareness of ATM cards. Visa is seen as the leading brand of payment cards.
- Very low penetration of lending from banks, with the most borrowing from families and friends.
- Gold and foreign currency is seen as the “safest” investment for Vietnamese.
“It is interesting to view the results the PFM has brought us and it will be fascinating to watch the way in which this changes as Vietnam develops,” said Stuart Tomlinson, Visa Country Manager for Vietnam, Cambodia and Laos. “The findings point to a lot of work that needs to be done in educating the public of Vietnam in terms of their management of personal finances, their use and trust of an increasingly banked economy and their attitudes toward payment with cards and personal credit.”
“Indeed, it still seems that a majority of people in the higher social-economic classes, who in other countries would be relying on banks, simply do not yet see a need to keep their money to bank accounts, interestingly citing a lack of security as a prime reason for this reluctance,” said Mr. Tomlinson. “Further feedback from our research indicates a belief that the account opening procedures and banking operations in general are complicated and time consuming, and this also deters uptake.”
“58% of respondents indicated that they simply do not have enough money to need a bank account. This is an interesting finding considering this survey was taken among wealthier, asset holding Vietnamese.”
“Generally speaking, people will open current accounts or savings accounts before broadening their banking needs and payment cards follow this,” Mr. Tomlinson continued. “So the relatively low knowledge of payment cards is a logical follow-on from the low acceptance of banking products.”
“However there are some extremely positive signs in this data. The very high ATM card awareness is a step in the right direction toward getting Vietnamese people to pay with cards and to associate cards with payment. And of course, seeing Visa prevail as the best known of the payment card providers is certainly very gratifying,” he said.
“With Visa emerging as the best known of the payment card companies in Vietnam, they were the perfect for ACNeilsen to partner with,” said Mr. Chris Morley, Managing Director of ACNeilsen Vietnam. “We have undertaken Vietnam’s pre-eminent exploration of personal finance habits and the findings will be a very valuable tool for Vietnamese banks seeking to better understand their customers’ motivations, preferences and future requirements when it comes to savings, investments, payment cards, lending and borrowing.”
According to the report, borrowing from banks is not yet a common practice in Vietnam, with only two percent surveyed of customers having borrowed from a financial institution, preferring instead to borrow from friends and family.
“A customer perception that it is very complicated and time consuming to borrow from a bank prevails in Vietnam, as well as a belief that interest rates charged by the banks are restrictive, so people prefer to save up for major purchases and pay in cash, or otherwise borrow from friends or family to avoid interest repayments, asset declaration or red tape from the financial sector,” said Mr. Tomlinson.
“Some interesting differences between Ho Chi Minh City and Hanoian personal finance trends were revealed,” said Mr. Tomlinson. “Residents of HCMC seem to borrow more to finance business activities, while Hanoi residents tend to borrow for home improvements as general consumption spending.”
This is the first such study into personal finance and was done with a 2,000 person sample from AB and C socio-economic classes. These classes are defined by housing ownership and asset ownership. The first was carried out from 15 to 30 September 2006 with 1,000 sampled face-to-face and door-to-door in Hanoi and Ho Chi Minh City. The interview is applied to randomly pick a qualified respondent in a household with average length about 60 minutes. The next such study will be completed mid 2007.
About Visa
Visa connects cardholders, merchants and financial institutions through the world’s largest electronic payments network. Visa products allow buyers and sellers to conduct commerce with ease and confidence in both the physical and virtual worlds. Visa is committed to the sustained growth of electronic payment systems to support the needs of all stakeholders and to drive economic growth.
Visa products currently generate more than $4 trillion in sales volume worldwide. Visa has unsurpassed acceptance at more than 24 million locations worldwide including one million ATMs. For more information, visit www.corporate.visa.com.
About Visa Asia Pacific
In Asia Pacific, Visa has a greater market share than all other payment card brands combined with 62 percent of all card purchases at the point of sale being made using Visa cards. There are currently 300 million Visa-branded cards in the region. For the 12 months ended June 2006, US$620 billion was spent at point of sale or withdrawn from ATMs in Asia Pacific using Visa cards. Visa Asia Pacific's internet address is www.visa-asia.com.
About ACNielsen
ACNielsen is the global leader in market research with operations in 17 countries within Asia Pacific and over 110 countries worldwide. This network enables the company to ensure a best practice approach and where required integration across services and countries.
ACNielsen Vietnam was established in 1993 and has since become the leading provider in Vietnam. The company offers full service capability across qualitative, quantitative, media and retail measurement. Integration of information and findings across various disciplines of research is of increasing importance to our clients today.
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