Accessibility to consumer credit by individual customers in financial companies: A case in the Mekong Delta

Abstract

Consumer credit has grown rapidly in recent years with a variety of products from banks and financial companies. However, previous studies in Vietnam only approached factors affecting consumer lending decisions and credit access at commercial banks. The aim of this study is to determine the factors affecting the accessibility of consumer loans to individual customers at financial companies in the Mekong Delta. Data were collected by directly interviewing 200 people who applied for loans at financial companies (not banks). A pre-designed questionnaire and a random sampling method were used. According to the analysis results of the binary Logit regression model, male borrowers will have more difficulty in accessing consumer credit at financial companies. This result is in contrast to the results shown in some studies conducted at commercial banks. On the other hand, the positive impact on individuals' access to consumer loans of the variables of education level, income, and form of receiving income reinforces the results of previous studies on this topic. Besides, the higher the loan amount, the lower the probability of loan approval. From there, the author has proposed recommendations to improve access to consumer loans at financial companies and improve consumer credit products in the Mekong Delta.