Hanoi (VNS/VNA) - The Ministry of Industry and Trade’s VietnamCompetition Authority (VCA) has warned local consumers to be cautious abouttaking out online loans amid rampant scams.

According to the VCA, online loans areavailable in Vietnam, but the legal framework for this kind of lending hasn’t been issuedyet. As a result, this model puts borrowers at risk.

The authority saidit has received multiple complaints about these scams, advising that whentaking out online loans, consumers should choose service providers that havepublished their business information, including their names, business codes,addresses and telephone numbers, on their websites or apps.

In addition, their websitesor apps must feature information on transactions, including informationsecurity policies, sample contracts, fees and the roles of parties.

Lenders whose websites orapps do not include this information may be involved in fraud.

According to the VCA, legitimate lenderssend loan agreements to borrowers for reference before entering intotransactions.

After signing a loanagreement, if the lender does not send a copy of the agreement or instruct theborrower to download it, the borrower should immediately ask them to do so.

Consumers should know theinterest rates and fees of these loans, which tend to be high, and storerelevant information, to be used as evidence in case of disputes.

Borrowers should lodgecomplaints with lenders in writing, instead of by telephone, to keep a recordof the lender’s commitments made while handling the dispute.

In a move to prevent loanscams, the Government is scrutinising to issue a decision to allow a pilotimplementation of peer-to-peer (P2P) lending in the country before officiallydeveloping laws for the new lending model.

According to the SBV, thefourth industrial revolution has promoted the development of many new productsand services, including P2P lending, which is designed and developed on thebasis of digital technology to directly connect borrowers with lenders withoutgoing through financial intermediaries such as credit institutions or foreignbank branches.

According to Pham Chi Quang, Deputy Director ofthe State Bank of Vietnam (SBV)’s Monetary Policy Department, if P2P lending iswell managed, it would facilitate inclusive finance, especially in remote areaswhere the banking sector remains underdeveloped. The lending will also help customers,especially household businesses and small- and medium-sized enterprises accessbanking and finance services at low costs.

The development of P2Plending will also create a new capital supply channel. Research conductedby Transparency Market Research showed that P2P lending would surge by 48.2 percentannually in the 2016-24 period, while Morgan Stanley forecast the businessmodel would reach a growth rate of 53.5 percent globally by 2020./.