consumer finance market customer survey 2015_demo

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Vietnam Consumer Finance Customer Survey 2015Customer Experience and Satisfaction

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Date of report: 11 August 2015Part of StoxPlus’s Market Research Report Series for Vietnam www.stoxresearch.com

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Date: 11 August 2015

Dear Client,

Re: First publication of Vietnam Consumer Customer Survey Report, 2015

StoxPlus has been issuing the annually updated Vietnam Consumer Finance (“CF”) Report in the last three years, providing the first and most comprehensive report on this sector. Taking into account feedbacks from our clients, in addition to the comprehensive analysis of the market itself, we conducted our first CF customer survey this year to better assess the experience and satisfaction of finance companies’ customers.

The research, conducted 500 respondents in Hanoi, Ho Chi Minh, and Da Nang, who already used CF services within the last 2 years, were chosen to answer the 17 questions about consumer finance service providing by finance companies (selected list including: HD Saison, Home Credit, FE Credit, ACS Trading, Prudential Finance, JACCS, Toyota Finance, MobiVi, and Others).

500 other respondents who intended to use consumer finance service in the future were surveyed to answer questions on their future demand.

As part of the research, we have conducted various field trips as well as discussions and interviews with industry players at management levels to grasp local insights of how fertilizers are distributed in Vietnam. For the product survey, we have conducted mystery shopping at selected points of sale of finance companies and commercial banks. We get financial data of key players and consumer loans from our strategic partner, National Financial Supervision Commission (“NFSC”).

We understand that this is a targeted but also an open research. We would be happy to provide any further information to address any questions that you may have, for any specific sector or target business in Vietnam. Our ultimate objective is to bring real values to our clients via in-depth research and practical local insights.

Should you have any questions, please contact I myself or our Research Manager, Ms. Lan Nguyen at ++84-4-35626962 (ext. 109) or her email: [email protected]

Yours sincerely,

Nguyen Quang ThuanCEOStoxPlus Corporation

StoxPlus Joint Stock Company5th Floor, Indovina Bank Building 36 Hoang Cau, Dong DaHanoi, Vietnam

telephone: +84 (4) 3562 6962 facsimile: +84 (4) 3562 5055

stoxplus.com

mailto:[email protected]

3

Table of Contents

Part Content Page

Executive Summary 5-6

1 Vietnam Consumer Finance Market Overview 7-14

1.1 Market size & Growth 7-9

1.2 Competition dynamics 10-14

2 Survey at a glance 15-18

2.1 Methodology 15-16

2.2 Key findings 17-18

3 Survey main findings 19-45

3.1 Sample Characteristics 19-22

3.2 Demographics 23-28

3.3 Products 29-32

3.4 Customer Acquisition Channels 33-36

3.5 Sales Channels 37-40

3.6 Payment Methods 41-43

3.7 Willingness to continue 44-45

Part Content Page

4 Customer Satisfaction 46-58

4.1 Overall satisfaction 46-48

4.2 Satisfaction with key product elements 49-58

5 Statistical Testing 59-72

5.1 Methodology & Key findings 59-61

5.2 Confidence Interval 62-72

6 Demand of Potential Future Users 73-78

6.1 Survey results 73-75

6.2 Characteristics 76-78

Appendices 79-87

4

Abbreviation

No. Word Stand for

1 APR Annual Percentage Rate

2 BCG Boston Consulting Group

3 CF Consumer Finance

4 CMF Vietnam National Coal-Mineral Finance JSC

5 COD Cash on Delivery

6 DSA Direct Sale Agents

7 JSCBs Joint Stock Commercial Banks

8 MAFC Mirae Asset Finance Company

9 MFI Microfinance Institution

10 MOIT Ministry of Industry and Trade

11 MSB Maritime Commercial JSC

12 NFSC National Financial Supervision Commission

13 POS Point of Sale

14 SBV State Bank of Vietnam

15 SOCBs State-owned Commercial Banks

16 SOE State-owned Enterprise

17 TFC Vietnam Textile and Garment Finance Company

18 VCFC Vietnam Chemical Finance JSC

19 VECITA Vietnam E-commerce and Information Technology Agency

20 VPB FC VP Finance Company

21 ID Identity Card

5

Executive Summary

StoxPlus has been issuing the annually updated Vietnam Consumer Finance (“CF”) Report in the last three years, providing the first and most comprehensive report on this sector. Taking into account feedbacks from our clients, in addition to the comprehensive analysis of the market itself, we conducted our first CF customer survey this year to better assess the experience and satisfaction of finance companies’ customers.

500 respondents in Hanoi, Ho Chi Minh, and Da Nang, who already used CF services within the last 2 years were chosen to answer the 17 questions about consumer finance service providing by finance companies (selected list including: HD Saison, Home Credit, FE Credit, ACS Trading, Prudential Finance, JACCS, Toyota Finance, MobiVi, and Others).

500 other respondents who intended to use consumer finance service in the future were surveyed to answer questions on their future demand.

Below are the most critical findings that could change the consumer finance market in the next few years:

34.19 33.134.54 33.91 34.64

32.61 30.22 29.86 32.52 33.43

35.7735.98

39.24 35.3 35.87

20

25

30

35

40

45

Totalsample size

ACS Trading FE Credit HD Saison Home Credit

Year

s ol

d

Average age of respondents within 95% distribution

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6

Executive Summary (Con’t)


7

Section 1: Vietnam Consumer Finance Market Overview

1.1 Market Size & Growth

1.2 Competition Dynamics

Contents

8

Source: StoxPlus from SBV and StoxPlus

Vietnam consumer loans continue to grow in 2014, reaching US$10.4billion as of end of August 2014

Figure 1: Consumer Loan Balance (USDbn) and %GDP, %Total Loans

In line with the booming credit growth Credit tighten policy dealing with inflation, SBV asked all commercial banks to reduce the non-production loans which include CF to below 22% by 30 June 2011 and below 16% by 31 Dec 2011.

SBV issued Document No. 2056/NHNN-CSTT dated 04/10/2012 excluding two groups of loans from the non-production loans under growth cap: (i) loans related to consumer real estate financing and (ii) consumer financing for everyday life purposes (vehicles and home appliances), for education purposes, and medical purposes.

4.9 4.8

7.2

8.2

6.3

7.4

8.9

10.4

7%

5%

8%8%

5.2% 5.2%

6.0%

6.6%

8%

7%7%

6%

4.7%

5.3%

5.4% 5.3%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

-

2.0

4.0

6.0

8.0

10.0

12.0

Dec-07 Sep-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Aug-14

Consumer Loans Balance in USDbn % Consumer Loans/GDP % Consumer Loans/Loan Book

Section 1: Vietnam Consumer Finance MarketMarket Size & Growth

9

Section 1: Vietnam Consumer Finance MarketMarket Size & Growth

Consumer finance is part of consumer lending business. However, consumer finance refers to credit used to purchased non-investment goods or services whose value depreciates quickly

Definition of Vietnam Consumer Finance Market

• StoxPlus’ Consumer Finance Definition: In light of international definitions, based on our understanding of core-business of finance companies in Vietnam, pure consumer finance consists of installment loans, cash loans and credit cards issued by finance companies. Other extended consumer finance services are part of retail banking business, including collateral loans (Home Mortgage, Home Renovation, Automobile) as well as credit card issuance provided by commercial banks.

Figure 2: Consumer loans annual growth rate, 2007 – Aug 2014

2%

61%

25%

-16%

18%21%

18%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Sep-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Aug-14

Source: StoxPlus


10

Section 1: Vietnam Consumer Finance Market Overview

1.1 Market Size & Growth

1.2 Competition Dynamics

Contents

11

Section 1: Vietnam Consumer Finance MarketCompetition Dynamics

There are 4 types of key players providing consumer finance market with different business models


12


There are 4 types of players providing consumer finance services: local banks, foreign banks, finance companies, and others (ACS and MobiVi).

Local commercial banks – Traditional and most trusted methods of lending

• Domestic commercial banks in Vietnam includes State-owned commercial banks (SOCBs) and joint stock commercial banks (JSCBs). It is the most traditional way that customers used to get in order to find the financial source. However, the main issue of commercial banks has risen since its complicated application process and long appraisal time. As such, it has created the stereotype inside the customer perception for long time.

• Local commercial banks still focus on traditional retail banking business. Most JSCBs increased their consumer loans quickly in 2014. However, even though these banks provide loans for consumers to purchase goods and services, they still require collaterals (e.g. a valued asset, or a savings account with the bank). This is different from a pure CF model that is simple and convenient, and does not require any collaterals for the loans.

Foreign commercial banks – Upper high class customers

• Foreign banks, unlikely to others, focuses on the upper class clients who owns a bank account. Besides, in order to tap on the consumer finance market, foreign banks has concentrated on the credit card issuance. It may appear that larger amount of loan will accompany strict credit appraisal. Customers must open an account in banks and information have to fulfill in order to valuate the financial ability or granted financial source.

• Along with the main products, which is credit card offered, foreign banks aim to high credit rating customer, providing the high level of customer service. As such, they operate in small-scale of products and customers with unique promotions come along.

Finance Companies – Quick & East could win the market

• Unlike the above financial institutions, finance companies taps on the market of smaller amount of loan, middle-low income customers. Providing them with quick and easy application process, finance companies charge higher interest in return.

• Finance companies, are the only type that follow the pure consumer finance activities that could consider. With diversified-product strategy, finance companies offer wide range of products, from cash loan, consumer durable goods, electronic devices or motorbike, it is expected to serve individuals who are mostly under-banked or unbanked, and are usually considered for credit supporting.

MobiVi – Advance technology could bring convenience

• The new trend of e-wallet has become phenomenon in Vietnam recently. In retrospect, several e-payment providers has launched its product to public, however, it has targeted on payment method only. MobiVi, on the other hand, by partnership with several banks, provides the micro credit to its customers.

• With the benefits of advance technology in online payment along with the expertise in financial services, MobiVi offers to Corporate Package launched in 2013 and Agent Package launched 2012. MobiViis dedicated to providing access to financial source to Vietnam low-income class, especially for industrial zone workers.

13

Finance companies have the fastest growth in consumer loans compared to other types of players

Source: StoxPlus from NFSC and SBV

Figure 3: Breakdown of Vietnam Consumer Loans by players, 2013-2014

20132014

37%

49% 3% 10%0% 100% 1% 4%

4%43%

48%

0%

20%

40%

60%

80%

100%

120%

SOCBs JSCBs ForeignBanks

FinanceCompanies

Others Total Others FinanceCompanies

ForeignBanks

JSCBs SOCBs



14

VP Finance Company (i.e. FE Credit) is believed to be the market leader for consumer finance, followed by PPF and Prudential



15

Section 2: Survey at a Glance

2.1 Methodology

2.2 Key findings

Contents

16

Section 2: Survey at a glanceMethodology

Sample Size• 500 consumer finance users within 2

years (consumer good instalment and cash loan)

• 500 intended users in the near future

• Location: Hanoi, Ho Chi Minh City, Da Nang

Respondents• Male & Female

• Age: 18-60

• Have used consumer finance services from finance companies (selected list)

Methodology• Snowball Sampling

• Interview face to face

• Questions with showcards

Description• 500 respondents who already used CF services within the last 2 years were chosen to answer the 17 questions about consumer finance service

providing by finance companies (selected list including: HD Saison, Home Credit, FE Credit, ACS Trading, Prudential Finance, JACCS, Toyota Finance, MobiVi, and Others).

• 500 other respondents who intended to use consumer finance service in the future were surveyed to answer questions on their future demand.

• Due to difficulty in sampling consumer finance users, we selected snowball sampling methodology as respondents have been previously identified and difficult to locate or contact. As such, using this approach, few potential respondents were contacted, then asked whether they know of anybody whose used consumer finance service before or have intention to use in the future.

Biases• Foremost, snowball sampling does not produce a random sample because of the potential biases present during the process. In the beginning, the

bias may be introduced as the recommendations were based on convenience and the circle of relationships is limited. For example, the majority of sample size are female, or urban area accounted for more than 80&. These characteristics may be influenced as recommended participants have similar range of characteristics, for instance, same age, similar jobs, etc.

• Due to the limited number of respondents, this report will only analyse the top five finance companies with the most number of users amongst this sample size. The top 5 include: ACS Trading, Home Credit, HD Saison, FE Credit, Prudential Finance.

Consumer Finance customer survey overview

17

Section 2: Survey at a Glance

2.1 Methodology

2.2 Key findings

Contents

18

The segments were developed based on factors including product holding, channel preference, reason to use, income, and occupation.

Section 2: Survey at a glanceKey findings


19

Section 3: Survey Detailed Findings

3.1 Sample Characteristics

3.2 Demographics

3.3 Products

3.4 Customer Acquisition Channels

3.5 Sales Channels

3.6 Payment Methods

3.7 Willingness to continue

Contents

20

Section 3: Survey Detailed FindingsSample characteristics

200150 150

200

150 150

0

50

100

150

200

250

300

350

400

450

Hanoi Hochiminh Da nang

Used Intend to use

5%16% 13%

95%84% 87%

0%

20%

40%

60%

80%

100%

Ha Noi Ho Chi Minh Da Nang

Rural Urban

41%31% 31%

59%69% 69%

0%

20%

40%

60%

80%

100%

Ha noi Hochiminh Da Nang

Male Female

Figure 4: Breakdown of sample size by type of users

Figure 6: Breakdown of sample size by gender

Figure 5: Breakdown of sample size by geographic

% of respondentsNumber of respondents

% of respondents

Source: StoxPlus’ CF Customer Survey 2015

Source: StoxPlus’ CF Customer Survey 2015 Source: StoxPlus’ CF Customer Survey 2015

Consumer Finance customer survey characteristics

21

Section 3: Survey Detailed Findings Sample characteristics

Figure 7: Frequency of the use of consumer finance products

The frequency of majority of consumer finance users were less than one per year – 91 percent of sample size


22

Figure 8: Number of Finance Companies users

Source: StoxPlus’ CF Customer Survey 2015

Among finance companies most recently used, Home Credit under PPF Vietnam were almost inclined to become the most popular brand

Section 3: Survey Detailed FindingsSample characteristics


23



3.2 Demographics

3.3 Products


3.5 Sales Channels

3.6 Payment Methods


Contents

24

Section 3: Survey Detailed FindingsDemographics

Figure 9: Breakdown of sample size by age Figure 10: Age structure of top 4 companies

Source: 2015 StoxPlus Survey of Consumer Finance Source: 2015 StoxPlus Survey of Consumer Finance

Young adults (23 to 34 years old) are the most potential demographic groups to target for consumer finance products


25

Figure 11: Breakdown of sample size by user occupation

Source: 2015 StoxPlus Survey of Consumer Finance

Figure 12: Users’ Occupation of top 4 companies


Freelancer and Officers accounted for more than 60 percent of total respondents



26

According to the survey, we identify 3 customer groups with the highest potential for CF loans that are being served by other credit providers



27

Figure 13: Breakdown of sample size by monthly income Figure 14: Monthly income level of top 4 companies


As expected, CF customers tend to be Lower Mass – Mass individuals, with monthly income most likely to range from VND3mn – 7mn



28

This result confirms our previous analysis regarding target market of finance companies

34.0%

29.0%

15.0%

11.0%

5.6%

3.9%

1.5%A1

F

E

D

A

C

B

Wealthy1.5% = 1.3

million

Affluent9.5% = 8.2

million

Mass Affluent

and Upper Mass

26% = 22 million

Mass and Lower Mass63% = 54 million

Source: StoxPlus’s Analysis from GSO and TNS data

Figure 15: Vietnam Income Groups 2011

Class Annual income

A1 US$42,001 and aboveA US$24,001 - 42,000B US$6,001 - 24,000C US$4,201 - 6,000D US$3,001 - 4,200E US$1,801 - 3,000F US$1,800 and below



29



3.2 Demographics

3.3 Products


3.5 Sales Channels

3.6 Payment Methods


Contents

30

Figure 16: Products – Consumer finance users


% of respondents

Majority of CF survey participants use installment loans (91%). Cash loans users only account of 9% of survey participants

Section 3: Survey Detailed FindingsProducts


31

Figure 17: Reasons for using consumer good instalment loans


% of respondents


Top reasons for using installment loans is to meet the demand to consume immediately, as well as to split payment into smaller and more reasonable expenses


32

Figure 18: Reasons for using cash loans



Reasons for using CF cash loans is straight-forward: users need cash quickly and have no other borrowing options



33



3.2 Demographics

3.3 Products


3.5 Sales Channels

3.6 Payment Methods


Contents

34

Figure 19: Customer Acquisition Channels of CF Installment Loans


Section 3: Survey Detailed FindingsAcquisition Channels

Point of sales are the most popular customer acquisition channel for CF installment loans


35


Figure 20: Customer Acquisition Channels of Finance Companies


Point of sales are the most popular customer acquisition channel for CF installment loans


36

Figure 21: Customer Acquisition Channels of Cash Loan




For cash loans, sales agents and branches are the two most popular customer acquisition channels


37



3.2 Demographics

3.3 Products


3.5 Sales Channels

3.6 Payment Methods


Contents

38

Figure 22: Sale Channels of CF Installment Loans


Section 3: Survey Detailed FindingsSales Channels

Most important sales channels for CF installment loans are sales agents at POS and word of mouth via friends and relatives


39

Figure 23: Sale Channels of Finance Companies


Section 3: Survey Detailed FindingsSale Channels

Finance companies showed the similarity in the sale channels – Ads at POS, Sale agents at POS and Reference from friends and relatives


40

Figure 24: Sale Channels of Cash Loans


Section 3: Survey Detailed FindingsSales Channels

Sales channels for cash loans vary more than CF installment loans


41



3.2 Demographics

3.3 Products


3.5 Sales Channels

3.6 Payment Methods


Contents

42

Figure 25: Payment Methods of Consumer Good Loans Figure 26: Payment Methods of Cash Loans


Question: Which method did you choose to pay monthly instalment?

Section 3: Survey Detailed FindingsPayment Methods

Despite that CF companies have introduced many payment options, CF customers still use traditional methods of paying cash at physical locations


43

Figure 27: Payment Methods offered by Finance Companies


Section 3: Survey Detailed FindingsPayment Methods

Due to different business models, customers of different CF companies vary in their payment options

Question: Which method did you choose to pay monthly instalment?


44



3.2 Demographics

3.3 Products


3.5 Sales Channels

3.6 Payment Methods


Contents

45

Figure 28: Customers’ willingness to continue to use consumer finance service by products


Section 3: Survey Detailed FindingsWillingness to continue

CF installment loans customers are more likely to continue or introduce CF services to their friends and family

Figure 29: Customers’ willingness to continue to use consumer finance service by finance companies


46


Section 3: Survey Detailed FindingsWillingness to continue

ACS customers are most likely to continue or introduce CF services to their friends and family


47

Section 4: Customer satisfaction

4.1 Overall satisfaction

4.2 Satisfaction with key product elements

Contents

48

Weighted sum method is selected for ranking the customer’s satisfaction owing to the available of priorities of criteria

Influenced factors Available Choice Selected Companies• Interest rate • Very dissatisfied • Home Credit

• Procedure • Dissatisfied • FE Credit

• Contract’s terms & conditions • Neutral • HD Saison

• Appraisal time • Satisfied • ACS Trading

• Staff’s attitude • Very satisfied • Prudential Finance

• Disbursement time

• Payment methods

• Loan rescheduling

• Penalties

Description• By applying this methods, the available choice was ranked by the priorities. The respondents had to give their preferences with respects to the

evaluation criteria incorporated into the available choice. These preferences were expressed in priorities or weights between the criteria.

• This survey will be scored over the nine factors and the rank is out of five. Five is the highest score and one is the lowest.

Biases• There are several assumption of compensability between criteria and the loss of information due to the smaller in the sample size. Also, assigning

weights is difficult and based mostly on observation. Somehow, the estimation and the relativity come from respondents are under the concern of normalization.

Section 4: Customer satisfactionOverall satisfaction

49

Overall, HD Saison Finance has the highest overall customer satisfaction, followed by ACS and Home Credit (PPF)

Section 4: Customer satisfactionOverall satisfaction

Figure 31: Overall customer’s satisfaction of finance companies

Source: 2015 StoxPlus Survey of CF Customers


50

Section 4: Customer satisfaction

4.1 Overall satisfaction

4.2 Satisfaction with key product elements

Contents

51

Figure 32: Customer’s satisfaction of CF installment loans


Figure 33: Customer’s satisfaction of cash loans


% of respondents% of respondents

Section 4: Customer satisfactionCustomer experience– Interest RateCustomers are most satisfied with interest rates of HD Saison’s CF installment loans and Prudential Finance’s cash loans

From 1 to 5, 1 is very dissatisfied and 5 is very satisfied, please rank the satisfaction for the latest finance company you did use


52

Figure 34: Customer’s satisfaction toward simple procedures


Figure 35: Customer’s satisfaction toward simple procedures



Section 4: Customer satisfactionCustomer experience – Application ProcedureCustomers are most satisfied with application procedure of Home Credit’s CF installment loans and cash loans



53

Figure 36: Customer’s satisfaction of Customer Good Installment Loan


Figure 37: Customer’s satisfaction of Cash Loan



Section 4: Customer satisfactionCustomer experience – Transparency of terms & conditionsCustomers are most satisfied with transparency of ACS’ CF installment loans and Home Credit’s cash loans



54

Figure 38: Customer’s satisfaction towards appraisal time


Figure 39: Customer’s satisfaction towards appraisal time



Section 4: Customer satisfactionCustomer experience – Appraisal TimeCustomers are most satisfied with appraisal time of FE Credit’s CF installment loans and Prudential Finance’s cash loans



55

Figure 40: Customer’s satisfaction towards customer services


Figure 41: Customer’s satisfaction towards customer services



Section 4: Customer satisfactionCustomer experience – Customer Services

Customers are most satisfied with customer services of Home Credit’s CF installment loans and Prudential Finance’s cash loans



56

Figure 42: Customer’s satisfaction towards disbursement time


Figure 43: Customer’s satisfaction towards disbursement time



Section 4: Customer satisfactionCustomer experience – Disbursement Time

Customers are most satisfied with disbursement time of HD Saison’s CF installment loans and Prudential Finance’s cash loans



57

Figure 44: Customer’s satisfaction towards payment methods


Figure 45: Customer’s satisfaction towards payment methods



Section 4: Customer satisfactionCustomer experience – Payment methods

Customers are most satisfied with payment methods of FE Credit’s CF installment loans and Home Credit’s cash loans



58

Figure 46: Customer’s satisfaction towards loan rescheduling


Figure 47: Customer’s satisfaction towards loan rescheduling



Section 4: Customer satisfactionCustomer experience – Loan Rescheduling

Customers are most satisfied with ability to reschedule loans of Home Credit’s CF installment loans and Prudential Finance’s cash loans



59

Figure 48: Customer’s satisfaction towards penalties


Figure 49: Customer’s satisfaction towards penalties



Section 4: Customer satisfactionCustomer experience – Penalties

Customers are most satisfied with fines and penalties of ACS’s CF installment loans and FE Credit’s cash loans



60

Section 5: Statistical Testing

Contents

5.1 Methodology and Summary of findings

5.2 Confidence Interval

5.3 Hypothesis testing

61

Section 5: Statistical TestingMethodology & Summary of Findings

Selected Methodologies• We use inferential statistics because it allows us to measure behavior in samples to learn more about the behavior in populations that are often

too large or inaccessible. We use samples because we know how they are related to populations.

• In behavioral research, we select samples to learn more about populations of interest to us. In terms of the mean, we measure a sample mean to learn more about the mean in a population. Therefore, we will use the sample mean to describe the population mean. We begin by stating the value of a population mean, and then we select a sample and measure the mean in that sample. On average, the value of the sample mean will equal the population mean. The larger the difference or discrepancy between the sample mean and population mean, the less likely it is that we could have selected that sample mean, if the value of the population mean is correct. This type of experimental situation, using the example of standardized exam scores

Description• Confidence Interval: The purpose of taking a random sample from a lot or population and computing a statistic, such as the mean from the data,

is to approximate the mean of the population. How well the sample statistic estimates the underlying population value is always an issue. A confidence interval addresses this issue because it provides a range of values which is likely to contain the population parameter of interest.

• Hypothesis Testing: Hypothesis testing refers to the process of choosing between competing hypotheses about a probability distribution, based on observed data from the distribution. It is a core topic in mathematical statistics, and indeed is a fundamental part of the language of statistics. In this chapter, we study the basics of hypothesis testing, and explore hypothesis tests in some of the most important parametric models: the normal model and the Bernoulli model.

Biases• In the normal course of events, population standard deviations are not known, and must be estimated from the data. Confidence intervals, given

the same confidence level, are by necessity wider if the standard deviation is estimated from limited data because of the uncertainty in this estimate.

• Due to the limited number of respondents, this report will only analyse the top for finance companies with the most number of users amongst this sample size. The top 5 include: ACS Trading, Home Credit, HD Saison, and FE Credit.

Confidence interval is selected to test statistical significance of the sample size

62

Section 5: Statistical TestingMethodology & Summary of Findings

Figure 50: Average monthly income of respondents


Figure 51: Average age of respondents


FE Credit illustrated the widest range of average income level and aging group


63

Section 5: Statistical Testing

Contents

5.1 Methodology and Summary of findings

5.2 Confidence Interval

5.3 Hypothesis testing

64

Section 5: Statistical TestingAverage Monthly Income – Total sample size

Monthly income of the total sample size is between VND4.66 million and VND8.22 million


Figure 52: Normally distribution of total sample size


65

Section 5: Statistical TestingAverage Monthly Income – ACS Trading

Monthly income of the ACS is between VND3.5 million and VND10 million



Figure 53: Normally distribution of ACS Trading

66

Section 5: Statistical TestingAverage Monthly Income – FE Credit

Monthly income of the ACS is between VND2.49 million and VND13.09 million



Figure 54: Normally distribution of FE Credit

67

Section 5: Statistical TestingAverage Monthly Income – HD Saison




Figure 55: Normally distribution of HD Saison

68

Section 5: Statistical TestingAverage Monthly Income – Home Credit




Figure 56: Normally distribution of Home Credit

69

Section 5: Statistical TestingAverage Age– Total sample size

Aging range of the total sample size is between 32.61 years old and 35.77 years old



Figure 58: Normally distribution of Total Sample Size

70

Section 5: Statistical TestingAverage Age– ACS Trading

Aging range of ACS Trading is between 30.22 years old and 35.98 years old



Figure 59: Normally distribution of ACS Trading

71

Section 5: Statistical TestingAverage Age – FE Credit

Aging range of ACS Trading is between 29.86 years old and 39.24 years old



Figure 60: Normally distribution of FE Credit

72

Section 5: Statistical TestingAverage Age – HD Saison




Figure 61: Normally distribution of HD Saison

73

Section 5: Statistical TestingAverage Age– Home Credit




Figure 62: Normally distribution of Home Credit

74

Section 6: Demand of Future CF Users

Contents

6.1 Overall

6.2 Importance on key product elements

75

Section 6: Demand of Future CF Users Methodology

Sample Size• 500 consumer finance users within 2

years (consumer good instalment and cash loan)

• 500 intended users in the near future

• Location: Hanoi, Ho Chi Minh City, Da Nang

Respondents• Male & Female

• Age: 18-60

• Have used consumer finance services from finance companies (selected list)

Methodology• Snowball Sampling

• Interview face to face

• Questions with showcards

Description• 500 respondents who already used CF services within the last 2 years were chosen to answer the 17 questions about consumer finance

service providing by finance companies (selected list including: HD Saison, Home Credit, FE Credit, ACS Trading, Prudential Finance, JACCS, Toyota Finance, MobiVi, and Others).

• 500 other respondents who intended to use consumer finance service in the future were surveyed to answer questions on their future demand.

• Due to difficulty in sampling consumer finance users, we selected snowball sampling methodology as respondents have been previously identified and difficult to locate or contact. As such, using this approach, few potential respondents were contacted, then asked whether they know of anybody whose used consumer finance service before or have intention to use in the future.

Biases• Foremost, snowball sampling does not produce a random sample because of the potential biases present during the process. In the

beginning, the bias may be introduced as the recommendations were based on convenience and the circle of relationships is limited. For example, the majority of sample size are female, or urban area accounted for more than 80&. These characteristics may be influenced as recommended participants have similar range of characteristics, for instance, same age, similar jobs, etc.

• Due to the limited number of respondents, this report will only analyse the top five finance companies with the most number of users amongst this sample size. The top 5 include: ACS Trading, Home Credit, HD Saison, FE Credit, Prudential Finance.

Consumer Finance customer survey overview

76

Figure 63: Breakdown of sample size by aging structure Figure 64: Breakdown of sample size by occupation


Section 6: Demand of Future CF Users Sample’s Characteristics

Similar with used consumers, survey’s result has showed the same segments


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Section 6: Demand of Future CF Users

Contents

5.1 Overall

5.2 Importance on key product elements

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Figure 65: From 1 to 5, can you please rank the important level of the following elements when you decided to use consumer finance service?

#1

#2

#3

#4

#5

#6

#7

#8

#9

Customers’ product requirements, attitudes and preferences are not unique, interest rate is still the most concern for intended customers

Section 6: Demand of Future CF Users Importance on key product elements


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Despite Vietnamese intended users still consider interest rate issue as the most important factor that would affect the decision of using consumer finance service, unlike used customers, appraisal time and time of disbursement is more important than procedure or contract’s terms

Section 6: Demand of Future CF Users Importance on key product elements


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Appendices

Contents

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Question 1: Have you ever used cash loan/consumer goods instalment loan providing by any finance companies within 2 years?

1. Yes2. No

Question 2: How usually do you use the consumer finance provided by finance companies?

1. More than a month2. Once per month3. Once per 2-3 months4. Once per 4-6 months5. Once per 6-12 months6. Less than once per year

Question 3: Recently, which finance company did you use?

1. ACS Trading2. FE Credit3. HD Saison Credit4. Home Credit (PPF)5. JACCS6. Mirae Assets Finance7. Prudential Finance 8. Toyota Finance9. MobiVi10. Others (Specific)

Question 4: Which consumer finance product did you use?

1. Consumer goods instalment loan -> Question 52. Cash loan -> Question 10

Appendix 1: Survey’s Question

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Question 5: which purpose for the use of consumer finance products?

1. Consumer durable goods (Television, air conditional, etc.)2. Electronic technology/Digital devices3. Computer/Laptop4. Motorbike/E-bike5. Automobiles6. Furniture7. Others (Specific)

Question 6a: Which channels did you apply to consumer finance products?

1. Shopping Mall/Supermarket (Aeon, Big C, Coopmart, etc.)2. Point of sale (Mobile world, FPT shop, etc.)3. Online retail websites4. Others (Specific)

Question 6b: How did you know about consumer finance products?

1. Ads at POS2. Sale agents at POS3. Ads on internet4. Newspaper/Flyers/Posters5. Friends/Relatives6. Others (Specific)

Question 7a: Which payment methods did you choose to pay monthly instalment?

1. Cash at branches in banking system2. Cash at purchase location (Mobile World, Media Mart, etc.)3. Cash at post office4. Cash at convenience stores (Circle K, Foodcoo-mart, etc.)5. Account transfer at bank6. Online payment (Payoo, MobiVi, etc.)7. Others (Specific)

Appendix 1: Survey’s Question – Consumer Good Instalment

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Question 7b: Why did you choose consumer finance services provided by finance companies?

1. Meet the purchase demand immediately2. Split into small and reasonable expenses3. Attract by discount and promotion program4. Resell product to earn cash5. Others (Specific)

Question 8: From 1 to 5, 1 is very dissatisfied and 5 is very satisfied, please rank the satisfaction for the latest finance company you did use

1. Reasonable interest rate2. Simple procedure3. Clear contract’s terms & conditions4. Appraisal time5. Staff’s attitude6. Disbursement time7. Payment methods8. Reasonable loan rescheduling9. Penalties

Question 9: Do you likely introduce the finance company to your friends and relatives?

1. Very likely2. Likely3. Neutral4. Unlikely5. Very unlikely

Appendix 1: Survey’s Question – Consumer Good Instalment

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Question 10: Which acquisition channel did you use to apply the cash loan?

1. Shopping Mall/Supermarket2. Point of sale 3. Sale agents at POS4. Branches of finance company 5. Post office6. Online website7. Others (Specific)

Question 11a: Before cash loan, have you ever used other instalment loan products (motorbike, cars, electronic device, etc.)?

1. Yes2. No

Question 11b: How did you know about the consumer finance products – cash loan?

1. Used it before2. Via sale agents3. Via ads/website/facebook/social media/etc.4. Via media/brochures/poster5. Via friends/relatives6. Others (Specific)

Question 12: Which payment methods did you choose to pay monthly instalment?

1. Cash at branches in banking system2. Cash at purchase location (Mobile World, Media Mart, etc.)3. Cash at post office4. Cash via sale agents5. Cash at convenience stores (Circle K, Foodcoo-mart, etc.)6. Account transfer at bank7. Online payment (Payoo, MobiVi, etc.)8. Others (Specific)

Appendix 1: Survey’s Question – Cash Loan

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Question 12b: Why did you choose consumer finance product?

1. Urgent for cash2. No other option3. Discount and promotion programs4. Others (Specific)

Question 13: From 1 to 5, 1 is very dissatisfied and 5 is very satisfied, please rank the satisfaction for the latest finance company you did use


Question 14: How likely do you introduce finance company to friends and relatives?


Appendix 1: Survey’s Question – Cash Loan

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Question 15: Would you like to continue using consumer finance products provided by finance companies in the future?


Question 16: From 1 to 5, 1 is Not at all important and 5 is very important, please rank the importance of following elements when you consider to use consumer finance products?


Question 17a: Gender

1. Male2. Female


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Question 17b: Age

1. Under 182. Between 18 and 223. Between 23 and 344. Between 35 and 505. Between 51 and 606. Over 60

Question 18: Occupation

1. Student2. Worker3. Officer4. Housewife5. Freelancer6. Farmer7. Others

Question 19: Average monthly income

1. Under VND3 million2. From VND3 million – VND5 million3. From VND5 million – VND7million4. From VND7 million – VND10 million5. From VND10 million – VND40 million6. From VND40 million – VND70 million7. Over VND70 million

Question 20: Address

1. Street/District2. Province3. City


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Appendix 2: Research Methodology

StoxPlus surveyed 1000 consumer finance customers.

• To qualify, respondents had to used at least one consumer finance product or intend to use and had knowledge about consumer finance product.

• The survey was translated into Vietnamese and conducted through direct interviewed in Hanoi, Ho Chi Minh City and Da Nang.

• The survey instrument was pre-test in Hanoi to ensure the survey question were understood and captured relevant aspects of consumer finance users’ behaviors and experiences.

• All questions referenced in local currency and were standardized into US dollars.

• The target quotas were established based on the number of users in each city.

• The data was collected from 20 June 2015 to 30 June 2015.

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If you need further assistance, contact us at:

Hang PhamAssociate+84 (0) 35626962 (ext. 109)+84 (0) 90 400 [email protected]

Head Office5th Floor, Indovina Bank Building36 Hoang Cau StreetHanoi, Vietnam+ 84 (4) 3562 6962

Ho Chi Minh Branch20th Floor, AB Tower, 76 Le Lai Street, District 1Ho Chi Minh City, Vietnam+ 84 (8) 3823 3485

Lan NguyenResearch Manager+84 (0) 35626962 (ext. 109)+84 (0) 96 494 [email protected]



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