Vietnam’s burgeoning FinTech industry has huge opportunities for domains like digital payments, peer-to-peer lending, digital banking, and blockchain technology. Moreover, a cooperative government and progressive demography make the country’s FinTech industry an ideal destination for investment. In this article, we talk about the facets of the rising foreign investment in the FinTech industry in Vietnam.
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Market Overview Of The FinTech Sector in Vietnam 2021
Vietnam’s FinTech market is on a swift growth trajectory as it triples in size between 2017 and 2021. Currently, the country houses more than 203 startups, covering a broad range of services such as digital payments, alternative finance, wealth management, and blockchain, among others. However, digital payment remains the biggest segment, representing 31% of all fintech startups, with over 4.2 million e-wallets users.
Furthermore, the market is expected to continue to grow at a rapid pace for the foreseeable future. In the coming year, 94% of the Vietnamese banks will invest in Fintech. In the next four years, the value of digital services will increase from USD 0.5 billion to USD 3.8 billion. Until 2025, online payments are expected to grow at a rate of 24% per year, predicting a promising future for investment in the FinTech Industry in Vietnam.
Factors Contributing to Vietnam’s Expanding FinTech Industry
Vietnam has an interesting economic landscape, and contributing to that are various factors, from a cooperating government to a tech-savvy young, urban population. This section lists out some factors that have contributed to this significant growth of the FinTech industry in Vietnam:
Vietnamese government agencies like the National Technology Innovation Fund and the FinTech Steering Committee have worked to create a welcoming environment for foreign startups in the FinTech sector. Various accelerators and incubators have also stepped in to provide FinTech startups in Vietnam with capital, R&D, and professional expertise.
Corporate & Personal Finance
The growth of corporate financing solutions is being fueled by the increasing number of startups. The demand for resources and capital is increasing, with up to 54,000 market entrants, which FinTech firms are ready to provide them with.
In addition, as Vietnam’s middle-class population’s income levels rise, so does consumption, remittance inflows, and outward migration. As a result, demand for personal finance solutions or online personal loans has increased. Through various FinTech Apps that provide personal financial services such as unsecured loans, investments, and fund transfers, people can easily get personal finance options and online loans at their fingertips.
A Boom in Digital Payments
With an 85% market share, digital payments are the most popular in Vietnam. With top FinTech companies entering the market, Vietnam’s digital payment market is becoming increasingly competitive, owing to macro industry factors such as low banked ratios, fixed transaction fees, rising banking penetration, increasing smartphone and internet penetration, and the expanding e-commerce sector.
Rising Investment in Vietnam’s FinTech Industry
The Vietnamese FinTech sector has enormous growth potential, as portrayed by the interest shown by investors from all over the world. The country’s rising per capita incomes and population make it an ideal location for FinTech investment. Additionally, the Vietnamese government has made several efforts to establish a substantial foundation for the development of Vietnam’s FinTech landscape, including:
- Addition of science, engineering, technology, and mathematics (STEM) subjects in school curriculums
- Beginning in second grade, children are exposed to computer science as a subject for learning, and by fourth grade, they have mastered basic programming and software development skills.
- Relaxation of visa laws and tax incentives for Vietnamese dual nationals to attract foreign Vietnamese FinTech experts to return to Vietnam and work in the country’s FinTech sector.
Conclusively, by showing an unparalleled commitment to innovation, Vietnam has established the foundation for a strong FinTech sector, making it an opportune moment to invest in the sector. However, investing can be full of challenges and if not properly assisted, one is vulnerable to procedural pitfalls. It’s always best to have experts alongside while investing.
How Can Cekindo Help?
Setting up a FinTech business in Vietnam can be a time-consuming and overly official process. Cekindo’s comprehensive business solution services will not only assist you with registering your company but will also ensure that you stay on top of all legal compliances. Following incorporation, we also provide HR and accounting services.