Peer-to-peer lending is a good business model, which is developing well because of the many unbanked and underbanked people in Vietnam. However, this model has still had some serious troubles in Vietnam, especially in legal. In this article, let’s find out with FinFan this problem.
Peer-to-peer lending is the lending model, which enables individuals to obtain loans from other individuals, cutting out the financial institution as the middleman.
Back to the story of U in the article “What are the differences between fintech and banks?”, she needs a loan to pay for her school. However, she doesn’t meet the quota to receive a loan from traditional banks when they force her to show some proof of income (if she doesn’t have one, they take it from her family’s members) or household registration.
In this situation, peer-to-peer lending is a better solution for her, as she can take a loan in only 3 or 5 minutes and doesn’t need to prove anything (except her identification card). That could lead to a big problem for her too when this information is taken by some scam objects.
In the above story, if U can find out a good peer-to-peer company and take a loan, that is good for her. However, in Vietnam, we still have a black credit institution, which can take advantage of developing technology.
*“Although black credit has been curbed, there are still potential complications, despite the many solutions that have been drastically implemented by ministries and sectors”. Nguyễn Thanh Hà, Chairman of the Board of Directors of SBLAW Law Firm talks to Vietnam News Agency about the issue.*
The scam objects will take advantage of legal loopholes to create many lending apps, which users don’t need complex procedures and without collaterals.
However, when you borrow money from one app and don’t have enough money to pay for this loan (because a loan’s interest is too high). These scamming objects will set an advertisement in your app to another lending app to pay for this loan.
Both apps are created by one institution to make your debt spiral endless and they will take profit from this spiral.
Moreover, the situation will be worse when the creators of these apps sell your information to debt collectors. In this case, your family, friends, relatives and even your lives will be seriously harassed and disturbed, even in danger.
This has been a hot topic on social media and hasn’t been stopped. The scam objects create some scamming forex, stock or even blockchain exchanges without any license from the Vietnamese government.
After that, they seduce prey in multi-level forms with many promises of getting rich quickly. To create trust, they pretend to be successful businessmen, wearing luxurious suits and check-ins in luxurious places.
When the prey is trapped and the highest level - creating exchanges objects collect enough money, the whole system will crash, and the investors can’t take back their money anymore.
Vietnam is one of the nations, which still have a prohibition on cryptocurrency, despite its trend and being mentioned too much on social media.
All the banks in Vietnam don’t take the responsibility for the profit from cryptocurrency investment. Therefore, a few illegal money conversion models have emerged, and scams continue to increase.
One of my friends suffered from this scam. Scam objects always take advantage when they create Binance accounts and open the peer-to-peer fiat money exchange each other feature on this floor.
The problem comes when all exchanges by this feature will not be responsible by Binance, these are not responsible by banks in Vietnam too. So, the receivers of cryptocurrencies can receive your coin and don’t transfer fiat money to your bank accounts.
To serve this problem, all cryptocurrency investors should use hot or cold wallets to keep their assets in safety.
These are some of the fintech serious troubles in Vietnam. FinFan hopes that with this above information, readers can have the best solution to protect their money on the internet and in the development of the technology decade