Home Credit Vietnam: Pursuing a sustainable financial future

Company Report

March 01, 2024

Home Credit Vietnam: Pursuing a sustainable financial future

Khang Pham Ngoc, Chief Financial Officer at Home Credit Vietnam, outlines the path his organisation is taking to achieve a sustainable financial future

“I love cooking,” says Home Credit Vietnam Chief Financial Officer (CFO) Khang Pham Ngoc. While cooking and consumer finance institutions may seem wholly disparate, for Khang, there are many similarities between his hobby and job.

“Cooking creates connections and it creates emotion through different people in different walks of life,” he says. “When you’re a CFO, you’re constantly looking for that connection between partners and colleagues and driving meaningful relationships with your customers.”

Khang has been a finance professional all of his career, taking a leading role at several organisations.

Having been at Home Credit Vietnam for over five years, Khang has experienced firsthand “how critical and effective finance business partnerships can be, both in supporting and challenging companies in the way they operate and in the execution of their strategies.”

“It’s essential to be able to connect the dots between short-term objectives and longer-term priorities and still be able to balance both of them,” he adds.

“In a way it is just like cooking too, getting all the different combinations of decisions right. Whether it's in the numbers of analytics, it's about maximising the execution of the operation and strategy, much like cooking is about maximising flavour!”

Khang Pham Ngoc: The path to Home Credit Vietnam

Khang’s lifelong career in finance and now in the financial services industry was not something that he had planned, but his skillset – particularly given his penchant for cooking – meant the job of CFO was perfect for him.

What’s more, joining Home Credit Vietnam represented “the perfect storm” for Khang. “I was lucky in that I fit the culture Home Credit Vietnam was looking for”, he says, having experience across both European and Vietnamese heritage, and being educated across the Europe/Asia continental divide.

In Europe before joining Home Credit Vietnam, the role of CFO at the consumer finance institution also allowed Khang to return home and look after his family.

“I would say it was a mix of fate and coincidence that led me to the credit industry in my home country,” muses Khang. “I think having a very diverse and interesting finance career across multiple industries worked in my favour.

“I’ve been fortunate to have a lot of financial experience in different shapes and forms, serving different industries, including the manufacturing industry. This has given me a diverse view of how to understand finance through different lenses; numbers do not speak for themselves alone.

“So when you speak about manufacturing or system integration, for example, these roles require an understanding of legal processes, contract negotiation processes and customer relationships.

“Harnessing these experiences has given me the right skill set to come into the consumer finance institution space, and I’m very happy to be part of Home Credit Vietnam today.”

Growing alongside Home Credit Vietnam

As previously mentioned, Khang has been at Home Credit Vietnam for over five years, and he takes pride in what the organisation has been able to achieve in that time.

“Home Credit Vietnam has been on quite the digital transformation journey in my time here,” says Khang. “The finance function has been turning from being more on the support side to a support and challenge side, a positive, forward-thinking shift for us.”

“We’ve become more involved in delivering effective partnerships, and being an effective partner ourselves, to the point where we are the organisation our partners turn to when there is an issue, or a problem needs resolving.

“The quality of the interface we’ve developed and our greater communication lines has made our journey all the more interesting.”

It’s not just innovation itself that has stood out for Khang in measuring Home Credit Vietnam’s success. It has also fuelled positive numbers for the consumer finance institution.

Khang adds: “We were in a high growth phase preceding the COVID-19 pandemic. What was great is that, despite the circumstances of an economic downturn, we were still able to deliver positive figures during the pandemic.

“Showing resilience throughout this cycle of lockdown, and more importantly, our ability to influence our people to keep a balance between short-term obstacles and long-term transformation was a real marker of our success.”

Home Credit Vietnam: A digital transformation journey

While Home Credit Vietnam is a widespread name in the Vietnamese market, it’s important to remember it was only founded in 2008 – in operation for the past 15 years. “We’ve onboarded 15 million customers in that time,” notes Khang.

“The population of Vietnam is around 100 million, so we’ve been able to onboard 23% of the adult population, a huge feat to achieve in just 15 years of operation.”

Home Credit Vietnam has been able to achieve this by developing a wide point-of-sale (POS) network nationwide.

This is something Khang accredits to the firm’s establishment of many partners, “with key accounts, key retailers and key dealers on one side, but also with a strong sales network of employees, over 3,000 strong, on the other side”.

Partnering with FPT.AI

One such key partnership Home Credit Vietnam leverages is its relationship with FPT.AI. The fintech helps the consumer finance institution onboard its clients, and keep them there – as evidenced by its significant customer base in Vietnam.

“It’s so important to offer easy, seamless and convenient solutions,” says Khang. “This is one of the core tenants in our relationship with FPT.AI. We also, alongside our partner, strive to make sure the solutions we leverage are professional and ethical.

“These protocols we have jointly established with FPT.AI has allowed us to create a fantastic digital, AI-based call centre assistant. When you operate a call centre, it’s hard to actually prove that your message gets delivered to a customer, is adequately professional and reaches out to people on an emotional basis.”

However, by partnering with FPT.AI and implementing an AI virtual assistant, Home Credit Vietnam has been able to achieve two core objectives. “The AI assistant has not only helped us save on costs,” notes Khang, “it also helps us connect with far more customers when they need it, than a traditional call centre.

“We’re also able to track customer satisfaction through the data from the AI assistant, and we’re able to tailor the approach to a customer.

“For example, if a customer is about to default on their credit we could change the tone of the call to be more professional and give more frequent alerts. It reminds the customer they need to pay their debt but also de-dramatises the situation, and removes tense discussions person-to-person.”

The partnership has also helped Home Credit Vietnam solve the different challenges faced by its customers and has only been attainable thanks to the credit union’s growth over the years. “The key to our journey throughout the past 15 years has been supporting the growth of the market, but also supporting the financial inclusion of all our customers,” says Khang.

Indeed, the primary customer base of Home Credit is the financially underserved population in Vietnam. Those who have just got their first job, those on low income and those vulnerable to credit are the core of Home Credit Vietnam’s customer base.

Khang adds: “Our whole objective is to build a relationship with the underserved over time, improving their financial literacy and giving them access to a more diverse range of products.”

Home Credit: Championing financial inclusion

This is one of the key missions that Home Credit Vietnam has been striving to achieve since its founding, improving financial inclusion for the whole of Vietnam.

Through digital transformation, and offering new products, Home Credit has been able to reach customers who would otherwise still be unbanked. “It doesn’t matter where you are in Vietnam, you will get a ‘yes’ or ‘no’ from us at the point of onboarding in less than 30 seconds,” says Khang.

Improving the convenience of the customer experience, particularly in today’s digital age – has helped the consumer finance institution significantly ramp up its client base. “Throughout our journey, we’ve been adding more innovation to help improve financial inclusion for all,” says Khang.

“We ask the key questions,” Khang adds. “How do you move offline people to online? How do you get online people to be interested in very offline-ish financing solutions? So it's about innovation, but it's also about bringing basics and foundation to these customers.

“Today we are onboarding customers through our Home app, and we’re able to build a relationship with them through a smartphone or personal device. This allows us to acquire more customers and also improve retention. We see 67% of customers returning to us which for me, really highlights the strength of our product.”

Of course, given the client base Home Credit Vietnam tailors to, responsible lending is a significant point of operation the credit union has to get right. “Responsible lending is key for us,” Khang adds.

“By improving our level of financial inclusion, and reaching more of the underserved, we can enhance our knowledge of responsible levels of lending for customers, and get it tailored to their specific needs with a wider pool of data.”

There are other initiatives Home Credit Vietnam runs too, including Home for Life, which helps clients plot a path to lend properly and meeting payments. This is all part of the consumer finance institution’s holistic approach to financial inclusion for all in Vietnam.

Sustainable finance front of mind

By meeting its financial inclusion goals, Home Credit Vietnam can meet another, significant aim: sustainable financial services. “There has been quite a sustainable stream of profitability generated from delivering financial inclusion and from our relationship with clients,” says Khang.

“The steady stream of profits we generate has allowed us to be on the market 15 years later at the scale we have achieved, and we have been able to grow sustainably, which in turn allows us to offer clients the most sustainable solutions for them.”

A self-perpetuating relationship for good, Home Credit Vietnam has taken advantage of its strong track record for sustainable finance by being one of the first financial institutions in Vietnam to deliver ESG reporting, so it can track how to best reach its ever-loftier sustainable aims.

“There are many diverse ways to address sustainability,” adds Khang. “You could focus on green financing, project financing and initiatives to reduce your environmental impact globally, but the best way is to start at the bottom of the ladder.

“In Vietnam, delivering inclusion is the first step to delivering higher aims in sustainable finance. This helps to build a strong economic cycle to deliver on higher sustainable aims, like green financing.

“Economic growth comes from consumption, so for us, it is about onboarding as much as the population so we can achieve our sustainable goals. It’s not just important for us, but from a governmental perspective and the Central Bank of Vietnam too.

“It’s our role to deliver this to customers and our responsibility to make sure clients know their role in achieving economic growth. One way in which we do this is that our diverse workforce heads out into underserved communities and volunteers, handing out toys to young children and really connecting with the wider population.”

Creating and maintaining sustainable communities is something Home Credit Vietnam, and Khang personally, takes very seriously. “Our Home for Life initiative gives 0% interest loans to disadvantaged women to empower them to take ownership of opportunities in life,” notes Khang.

“This can massively help improve the standard of living for single mothers, and by offering 0% interest, this could make a huge difference and enable them to, for example, buy another cow to help nourish their young families. So we must support them in this way and build sustainable communities.

“Not everyone may be aware of it, it may not be called sustainability, but all of this is part of the journey towards sustainability, from the customer standpoint right through to our bottom line and our profits.

“If you want to make sure the customers are returning, then you need to treat them sustainably. You need to be there for them for the 15 years we have been and the next 15 years too, because you are relied upon. That is more important than focusing your organisation purely on its profitability, for example.”

Home Credit Vietnam: Sustaining growth for the future

Of course, the key to continued success for Home Credit Vietnam is continuing to reach more underserved customers sustainably. While the consumer finance institution has mastered sustainable offerings offline, in the future, the firm wants to up its “sustainable digital finance” capabilities.

For Khang, this is about “onboarding a new generation of customers in the lending journey digitally”.

He adds: “We believe it’s so important to engage with Gen Z consumers, to really give them financial products that are easy for them to understand and improve their financial literacy.

“To reach them, we need to push forward with our sustainable digital finance initiative, keeping our focus on customer-centricity as we engage with the next generation of lenders.”

What’s more, while outlooks for the future may sound technical and futuristic, it’s actually “very simple,” as far as Khang is concerned. “It’s about doing things right by being customer-centric,” he notes.

“We want to make sure our financial services are prioritising customer needs and continue to serve the overall well-being of our community. So in the future, it’s all about continuing what we’re doing offline and extending those capabilities online.

“It’s about adding more digital capabilities to what we offer and providing a seamless transition from our offline to online services over time. We want to have the best of both worlds, in-person and digital, as we gradually move into the online age. We’re working for today while addressing the needs of tomorrow.”