Pawnbroking is the oldest form of financial lending, offering rapid appraisal and often prevailing over other forms of lending such as banking. Globally, pawnshop services have flourished in many countries, particularly in major financial hubs like the United States and India.
Alongside the global development of this billion-dollar market, pawnbroking services in Vietnam have also seen early growth, initially through small-scale pawnshops. According to statistics from the Ministry of Public Security at the end of 2022, it is estimated that there are around 27 thousand active pawnshop establishments in Vietnam.
However, estimating the number of customers utilizing services at these traditional pawnshops is challenging due to a lack of clear statistics. Nonetheless, according to expert research, the customer base for these types of lending services is substantial.
In 2016, with the issuance of new government resolutions, new asset-backed lending companies emerged, operating professionally and transparently in appraising and executing lending procedures. This move aimed to mitigate a portion of Vietnam's "black credit" issue.
Some notable companies in the industry, operating in chain forms such as F88, Người Bạn Vàng, and VietMoney, etc have attracted the attention of financial investment funds, contributing to the sector's robust growth. Their loan package’s procedures feature simple procedures and flexibly adapt to various customer segments to optimize customer experience and quickly meet their financial needs.
Stores of some pawnshop service brands in Vietnam
(Data was updated until 2024)
Although bringing many benefits to people in urgent need of financial issues, in reality, the pawnshop model as well as consumer lending services in Vietnam are encountering difficulties in controlling and recovering debts. According to the report of the Vietnam Banking Association, in 2023, the estimated average bad debt ratio in the group of financial companies at risk increased by over 15% (while the bad debt ratio in consumer credit throughout the system tends to increase (approximately nearly 3.7% of the total consumer credit outstanding balance, while from 2018 to 2022 it was only about 2%).
The cause is attributed to customers' decreased ability to repay debts due to the difficult economic situation. In addition, another important reason is that there isn’t punishment for deliberate non-repayment by customers. This makes companies operating in the field face many difficulties, even losses due to the need to allocate high-risk provisions.
F88
Established in 2013, to provide fast, easy, and transparent financial services, F88 is a major player in Vietnam's pawnshop market. F88 offers loan services against assets such as cars/vehicle registration, motorcycles/motorbike registration, phones, laptops, etc. Additionally, the company provides various financial utility services such as insurance, money transfer, bill payment, electricity, water, internet collection, etc.
With significant capital from investments by financial investment funds such as Mekong Capital and Granite Oak, along with a network of over 800 branches nationwide, F88 can quickly reach almost all customer groups in need of loans through its nationwide branch network.
Regarding F88's business picture in the four years from 2020 to 2023, the company's net revenue steadily increased each year, reaching over VND 2300 billion in 2023. However, the company's profit after tax tended to show negative development. After witnessing significant profit growth in 2022, the company recorded a post-tax loss of over VND 500 billion in 2023. The reason for the profit decline is attributed to the company's cautious approach to risk provision.
Net revenue of some pawnshop companies in Vietnam
Người Bạn Vàng
Người Bạn Vàng is also a reputable company in the pawnshop market in Vietnam and is a strategic partner brand of PNJ. Established in 2017, the firm offers various pawnshop services ranging from phones, and laptops to gold, jewelry, diamonds, and famous watch brands such as Rolex, Hublot, Patek Philippe, etc. Customers can exchange information through 117 stores, mainly in the southern region, mostly in Ho Chi Minh City.
Người Bạn Vàng's revenue and profit after tax showed contrasting growth trends. Unlike the stable revenue growth, increasing 2 times and 3 times after each year, profit after tax reached positive levels in 2021 before slightly declining in 2022, only reaching over VND 1 billion.
Tiện Ngay
Established in late 2019, the brand aims to position itself as a pioneering multi-utility financial chain in Vietnam. The company's model focuses on developing a chain of branches while providing a variety of financial solutions such as payment, collection, disbursement, investment products, advisory services, capital support, etc.
As it developed over the years, Tiện Ngay continuously expanded its branch network and quickly reached a scale of over 30 branches in Hanoi, Ho Chi Minh City, Can Tho, and other provinces.
Tiện Ngay's financial services witnessed steady growth in net revenue over three years, but profit after tax saw a negative trend. Specifically, the brand's revenue increased by about VND 18 billion each year from 2020 to 2022, reaching nearly VND 55 billion. Meanwhile, the company's profit after tax continued to decrease steadily, recording a loss of VND 14 billion in 2022.
Profits after tax of some pawnshop companies in Vietnam
Srisawad
Srisawad Vietnam is a subsidiary of the International Holding financial group with 100% Thai capital operating in the field of consumer loan solutions. Established in 2016, Srisawad is headquartered in Nghe An province, Vietnam. After nearly 10 years of development, Srisawad Vietnam now has 120 branches nationwide with over 2,000 employees.
Regarding the business situation of Srisawad Vietnam, the company recorded a decreasing trend in net revenue accompanied by an increasing loss of profit after tax. In 2022, the chain's net revenue reached over VND 43 billion, while the profit dropped to a loss of VND 75 billion.
Vietmoney
Established in 2016, to become a reputable and leading pawnshop chain system, VietMoney operates under the O2O (Online to Offline) model and currently has 35 branches operating in many southern provinces.
Aiming to become a reputable and leading pawnshop system in Vietnam, VietMoney continuously expands and develops to provide customers with convenient financial solutions.
Similar to Tiện Ngay's financial picture, Vietmoney also recorded stable growth in net revenue, reaching over VND 13 billion in 2022. However, profit after tax decreased steadily, recording a loss of VND 22 billion in 2022.
The difference between companies operating in the new asset-backed lending model and traditional pawnshop companies lies not only in finance but also in image and brand building, as legal violations or self-destructive actions can threaten significant funding from foreign financial investment funds.
To assist the population, particularly the disadvantaged people, in accessing formal sources of funding and staying away from loan sharks. Along with the ability of asset-backed lending companies to provide small loans with simple procedures, this market still has the potential for expansion and development. However, for this sector to thrive in the future, companies need to be more cautious in the credit assessment process, asset valuation, and provisioning according to regulations to accurately reflect the quality of debt and business operations of the enterprise. Meanwhile, the government needs to implement appropriate measures to timely prevent refusing to pay one's debt and violence for debt recovery.
Source: Vietdata's 2023 Vietnam Pawnshop Market Report