CreditWatch with Negative Implications on VietCredit Finance Joint Stock Company (“VietCredit”) reflects FiinRatings’ opinion that the risks associated with challenging operating conditions stemming from the Covid-19 pandemic have increased. Economic conditions have turned adverse for non-bank financial companies during the fourth outbreak of Covid-19 in Vietnam which resulted in a sharp economic contraction. In particular, credit risks remain significant for less diversified medium and small-sized finance companies like VietCredit. Massive lockdowns in major cities have prevented collection activities and customers with weaker credit profiles, like the ones VietCredit focuses on, would have endured job losses and disruptions in income generation. As a result of these heightened operating challenges, VietCredit’s asset quality has deteriorated beyond the industry average. The company’s non-performing loan ratio (“NPL”) stood at 9.6% for the nine months ended September 30, 2021 compared to the industry average of 7.9% during the same period. 

The rating scale used by FiinRatings is the national scale; therefore, it must not be equated with or represented as a rating on the scale used by any other rating agency. It should be highlighted that the ratings follow our well-built methodologies that apply specifically to Vietnam financial market and business conditions, thus not equivalent to the international scales. Our rating methodology and criteria have been established with considerable support from global experts, approved by the Ministry of Finance, and published on the FiinRatings website. 

Details of the rating announcement are HERE 

About FiinRatings 

Since being officially licensed on March 20th, 2020, FiinRatings continuously improves its expertise and credit rating methodologies with Technical Assistance from S&P Global and Asian Development Bank. FiinRatings is a division of FiinGroup Joint Stock Company specializing in credit rating services. FiinRatings keeps certain activities of its business units separate from each other to preserve the independence and objectivity of their respective activities. We believe that the rating results will gradually support each market participant in obtaining standardized information and contribute to the transparency and development of the capital market in Vietnam.  

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