Demand for consumer credit is growing strongly and it is time to eradicate private money lending, a round table on financial issues heard in Ho Chi Minh City on October 20. Speaking at the forum, which was titled "more transparent, less troublesome" and organised by Thoi Bao Ngan Hang (Banking Times) newspaper, experts said eliminating loan sharks would protect both consumers and investors, but would become a reality only when credit companies and institutions become transparent. Nguyen Hoang Minh, Deputy Director of the State Bank of Vietnam's HCM City office, said consumer credit had grown strongly in the last three years, three-fold in the city in that period. The outstanding consumer loans are now worth 80 trillion VND (3.8 billion USD), or 6.8 percent of total loans, much higher than in any other city. "With the rise in population and living standards, consumer credit will continue to further grow." Minh and other attendees agreed that many people cannot get loans from banks and finance companies for various reasons, which sends them to loan sharks who give them money easily and quickly. Economist Le Xuan Nghia said, "It is time to eliminate the credit black market, and Vietnam has the capability to do that." The Government should allow credit institutions to expand their activities, he said. To ensure transparency, these companies and institutions should be controlled by the central bank and monitored by legal and consumer protection organisations, he said. Friedrich Weiss, CEO of Home Credit Vietnam, said: "The black market will never 100 percent disappear. "You can only limit it by opening up the financial market, promoting banks, promoting regulated finance companies and making them really transparent. "On one hand you have to protect customers and on the other you must protect the investors." Besides opening up the financial market, authorities should also educate customers, which has been successfully done in many foreign countries to achieve financial market transparency, he said. Nghia raised another concern when he said credit contracts were difficult to understand and financial companies should simplify them. In terms of interest rates, the current 39-49 percent rate per year was very high considering bad debts amount to only 5 percent, he said. He suggested setting up more financial institutions so that there would be competition, which would lead to a reduction in interest rates.-VNA