Investing in Vietnam

Direct investments in individual stocks on the VN exchanges is rather risky.  You never know when a CEO will be imprisoned or when a company will be accused of faking the books.

A few ETF funds that you can buy on NY exchanges are VNM, VCVOF, VNM.  These allow you to invest fairly broadly in Vietnam stocks.  Unfortunately none of these funds has done very well in the past year, returning mostly low single digit numbers.  A broad based US fund would have done a lot better.

The big problem is that for investments in Vietnam you have to bring money into the country, which you will not have access to after a certain time if you are suddenly turned away at the border.
And if you turn your back on Vietnam it is difficult to get the money out of the country.

If you don't have any connection to your home country anymore (and you can't invest in your home country) the money has to be deposited and invested somewhere.
So I have invested a part of my money in 3 different Vietnamese banks in term deposits.

If one has enough courage and perseverance one can invest here also in real estate. But beside the big risk is again the problem that you have to bring the money back abroad after the sale.

For me the only safe and simple investment in Vietnam is a time deposit.

For the rest of the money which is not in Vietnam, there are good possibilities today to invest relatively risk-free outside of Vietnam.

In my case this is my German international credit card bank and an international bank in Singapore.
Like in my home country the money is insured up to 100k.
In Vietnam, as I recall, it's a few thousand dollars.

Of course if you use Vietnam as a second residence to your home country, it is probably safest to invest in your home country.

A warning sign to anyone is the stock market here.    China & HK have market capital of @$12000bIllion (12 trillion) US 20,000 billion  Japan $6000 billion. .......

Vietnam.....barely pocket change

Now Vietnam, ....if you read all the state controlled media about how brilliant every thing is going , you'd think it was the only economy in the world doing well.     

If so......how come no body is believing that BS and putting their MONEY into Vietnamese company stock.??? 

It's one thing to invest with a multi national OUTSIDE. VN that make good money here paying 50 cents an hour for the labour.   But not many put their money across the border into the hands of company directors that have a history of sticky fingers .

It's often been said , don't invest IN Vietnam,,you invest with the Wall st criminals that make money “out” of Vietnam.

The stock market here is a Traders market , not an Investor market.
Get in & get out with hopefully a gain.

Same as a Casino....the longer you sit at the table ,  the better your chances of losing.

AkaMaverick wrote:

If you don't have any connection to your home country anymore (and you can't invest in your home country) the money has to be deposited and invested somewhere.

In theory, you can always invest into any country via a brokerage firm, like Interactive Brokers, regardless of your residence...

I invest in usd & Euro structured notes & they have given me 6% plus PA returns over the 4 years now I have had them with at least some protection on capital. They are managed by an international company based in Q1. They have no exposure to the Vietnamese market!
Like Maverick I also have term deposits in VND at a Vietnamese bank & over the years have had excellent returns on these accounts even with some VND devaluations along the way. However as with everything Vietnamese these days, who knows whats round the corner & if forced to move on getting the money out might prove difficult but not impossible I think!
The property market over the past say 10 years has proved lucrative if you are Vietnamese (my ex wife can testify to that) & can navigate through the minefields & crap you are fed from the agents, but a word of warning on the property side! Just down the road from me there is an apartment block that has been sitting half finished now for the past 3 years & I know an American guy that bought 2 apartments there off plan & has lost all his deposits & payments & looks like the developer has done a runner!

atomheart wrote:

AkaMaverick wrote:

If you don't have any connection to your home country anymore (and you can't invest in your home country) the money has to be deposited and invested somewhere.

In theory, you can always invest into any country via a brokerage firm, like Interactive Brokers, regardless of your residence...

I just check the Interactive Brokers webpage and read following:
"If you are a resident of Asia, except India, Hong Kong and Japan, and continue with the account opening process, your account will be opened with  Interactive Brokers LLC in the US."

Firstly, I will never open a bank account in America and secondly, what is the identification procedure for opening an account? Fly to the United States for a few days? 

DEATH of a thounsand CUT from every quater

mapkw wrote:

DEATH of a thounsand CUT from every quater

Is this lyric poetry or I am too silly to understand what you posted?

I just read that interest rates have been falling for centuries and from 2038 on negative interest rates are expected to be the standard (for those who don't know, in Germany already 90 banks charge negative interest to private investors).

I think also in Vietnam the interest rates will fall in the future and annual interest rates of up to 8% for time deposits will probably soon be history.

The best way, imho, is not to invest in Vietnam.

But if you must, then choose a business that doesn't require expensive equipment. Just don't bring expensive, heavy equipment there. I had a friend who brought an expensive mixing board, microphones, etc, to open a recording studio in HCM city. I was the music director of his company. He had paper signed by a deputy of secretary of some big shot that allowed us to bring in recording equipment with us as long as they are related to our work. Well, they (the custom guys) held it for "inspection" for 2 months and, blatantly telling us, would continue to do so with no end in sight if we didn't offer some "coffee" money. We resisted in the beginning, big mistake, by arguing that those were equipment and that we had a signed paper. It didn't turn out well. He, my poor friend, finally coughed up 20K, ah yes, that is twenty thousand American dollars, under the table. Some coffee, huh? My friend almost got a divorce from his wife because she thought he spent it on some whores. I had to vouch for him. When they released the container I lost my beloved Fender Strat, a pair of awesome cans, and a bunch of guitar strings sets. The price I paid for piggy back with him to save my own shipping costs. So no, dont bring anything of value. My friend paid a very high price for that, and I a little. We should learn from it.

The people.
Here is my first hand experience doing business with Vietnamese people. To start with, I have very low opinion with them people. And I dealt with a rather "sophisticated" group, or so I thought. I am a musician/songwriter. The people I deal with are studio owners, singers, instrumentalists, designers, etc. These are artists, people with hearts, with souls, honorable people. I no longer think that way. Once the money parted with you, you are on your own. That is what I learned. I never got to finish my songs. In short, I got robbed . Funny how I spend the bulk of my life in a strange country with strangers that don't look anywhere near me living a peaceful life and only got robbed by my own people when I come back to them.

And yeah, everything takes longer in Vietnam. If they tell you in a day, try a week. If in a week, they say, try a month. And if they tell you a year, you might as well just not wait. If you don't bring enough cash for bribes, that is. This is huge hidden costs. Bring ALL the money for that purpose, if you still want to do business in Vietnam.

Most important of all, if they tell you they know ANYTHING, check them. And yeah, hold on to your hard earn money. They don't see us as humans. They only see the dollar sign. Sad but true.

I wish my post is not so negative but it is what I experienced personally. I have a gloomy view of these people and probably will remain that way until I meet someone that can change that. I still have hope for brighter future, but, man....smh

I have been in Vietnam since 2006 and have been involved in many successful investments.  The first thing you must understand is that Vietnam does not have the reporting requirements for investments that many developed nations have.  Therefore, investments in Vietnam will inherently carry a higher risk.  There is an investment for basically any appetite, but you need to question yourself on what your investment goals are.  If you ae a small investor, under USD 50,000 I would either 1) Not invest in Vietnam; or, 2) put your money in the bank and get a reasonable return.  The only issue is that you will need to convert the USD (or other foreign currency)  to VND before you can do this.  You may face possible problems in expatriating your funds later though.  Discuss this issue thoroughly with the bank you chose.

I would stay away from the any individual stocks on the Vietnam exchanges. I have seen many “sure” investments with companies that should have done well fail because of the greed of the company leaders, many of whom are in the cross-bar hotel now.  Insider news is almost always wrong.  There are some good managed investments in Vietnam, but should only be done by experienced investors that understand how to do their own due dalliance.  They also tend to have a high initial investment point – usually around USD 100,000.

Real estate can be a good investment in Vietnam, but you need to investigate all of the players before you put any of you own money in.  Investments include purchasing residential housing, apartments, commercial and industrial properties.  Expatriating your funds may be difficult.  There are a few projects that accept Foreign Direct Investment (FDI) whereby you can expatriate your original investment and any profits, minus taxes.

Develop a project of you own.  It can be just about anything; you just have to register your business with the local authorities.  This is a simple undertaking that usually can be completed in under one to two months for simple business such as food service, retail sales, consulting, services, etc.  If you get into complex businesses that require special licenses the timeframe goes out to six months to a year and if it requires certain approvals such as that of the Prime Minister, you can count on it taking a year at least.

There are many “projects” in Vietnam that are looking for funding.  The problem is how do you find out about them.  We have been involved in projects that cover a wide range of venues, some with only local investment and some with FDI.  The simplest investments we have done has been purchasing apartments in the range of USD 45,00 to 245,000.  Residential real estate is somewhat more complicated because of making sure that the documents you are getting are real.  Get a good lawyer to represent you.  For commercial and industrial properties, the risk varies greatly based upon your entry point.  The earlier you enter into the development, the higher the risk of dealing with unscrupulous people.

There are many good Large scale investments in Vietnam where you invest into the company, becoming a shareholder, that is actually doing the project.  Our normal method of projects is to develop the basic business model, contractually secure as much of the various issues we can, then look for investors. We tend to look for large monetary number investors for most of our projects.  They include mobile and broadband communications, resort and hotel developments, manufacturing, ship and boatbuilding, large scale (50mw) solar power generation plants and renewable or sustainable energy projects.  Currently we are working on a 600mw bio fuel diesel power plant.  We opened this up to basically any qualified investor.  We do however usually have one or two small scale projects that we open up invitations for investment.  These would include restaurants, retail clothing shops, companies looking to export a product from Vietnam, handicrafts, small scale custom manufacturing, small scale recirculating shrimp grow out facilities, alcoholic begrudges, software development and more.

If you invest in Vietnam, you will need to bring your foreign currency into your local bank through an investment account in your name.  Any funds that go into this account must be invested as per your declarations of investment, no exceptions.  Once your investment has concluded, any funds including principle and profit must exit Vietnam through the same account. It works with very little hassle.  Just use a good bank that has experience in doing this.

The bottom line here is that small scale investments into just about anything in Vietnam carries too high a risk unless you are familiar with and have the infrastructure to execute the necessary investigations that you need to do in Vietnam before investing. If approached by a local looking for an investment and they want you to put all the money in, run.  Generally, they are scamming you.  Investing successfully in Vietnam takes lots of checking all statements and documents for their accuracy, you will need expert assistance, especially in your first few.  Generally, I believe that unless you have a real compelling and great investment with great partners, don't invest yet.  It is getting better every year, but the progress is slow.

Most of the people we have been involved with on investments and projects have been good people, but lack much in-depth knowledge on dealing with partners.  Most local developers are looking for a quick return with minimal work – that just is a dream.  Get a good group of support people around you.  If importing equipment, don't try to do it yourself, you will be approached for additional cash and experience delays.  Get a good import agent.  The same goes for any aspect of aspect of investing – develop your support group. And very important – don't invest through emotions or on a casual basis.  Treat all investments with caution and do your due diligence.  If anything feels wrong to you, it probably is wrong.  Vietnam is a great country with generally good people, but they have a very different outlook that most foreigners are used to.

Great response drailton.

Doesn't sound like the advantages outweigh the disadvantages.

Thanks buddy, it's really very useful information. Bcoz music industry equipments are very expensive and tons of thanks for your kind experiences you shared with us here.

Liked your opinions and really you explained every point undersold, no doubts how everyone Handel's the situations it depends upon every people mindset. Anyway very helpful details. Thanks

Let me tell you a bit about "food service" in Vietnam. This is a couple years ago. I had an appointment with a restaurant owner in HCMC. She had a couple of them near D1. While I was there, tho invited, I was alone most of the time because the owner was busy entertaining another table with 5 guys, bringing them food and drinks. I thought it was odd. You just don't invite people to come and then leave them there by themselves. And it wasn't like she didn't have a couple of waiter and waitress to help out. They must be important. I had time so I checked out the other table to see the big shots. They looked well-dressed and well-to-do, and they ordered a lot of stuffs. I used to own a restaurant too, so I understood the role of an owner. Sometimes we have to abandon our friends for customers, especially the ones with the big bills. Most of my friends don't give a shit when I leave them for my customers. They know what's up. After 3-4 hours of back and forth to the toilet trying to fill the septic tank to the rim with my urine, finally the other table left. The owner came, glad to be able to attend to me, but not really. I could see the resignation in her eyes. I could feel something was amiss. I asked, and here is the gist of it.

The table with 5 guys was a party of the local cop. He came once a month, usually with a bunch of guys. They would order the most expensive stuffs on the menu and drink a lot of beers. I looked and saw some food left and some beer bottles half spent. They probably filled their stomach to the rim as well. I took a guess that the bill was probably close to 3M. That seemed reasonable, naively I thought not a bad night for her since it was a week day. Well, according to her, they did not pay for the meal, and when they left the owner had to give them an envelope with additional 8M. That's 11M total. I asked how often she had to do that. She told me every month. It had been going on for quite some time. They only left her alone for the first couple months. She had been there around 1 1/2 years. I asked: what happens if you don't pay? She smiled at me, not with me, as if I was a child. I asked: can you report this guy? She looked at me, not to me, as if I was crazy.

Though not very high on my dream list, owning a restaurant in Vietnam was there. After hearing her story, the idea disappeared, borrowing Stephen King's words, "like a fart in the wind."

Not easily with money you have in Vietnam.

For investors below 50-100 VND, I would agree that the disadvantages outweigh the advantages.  Unless you put you money in a bank that is paying around 7%.  Quite risky with private banks, but with a bank like Vietcombank the risks are greatly reduced.  The risk here is that there is little visibility on potential banking changes to issues that might effect your relationship with the bank.  The government does however publish on the Vietnam Government Portal oin many languages: (http://www.chinhphu.vn/portal/page/portal/English)
information on the laws of Vietnam and sometimes upcoming changes tha they are looking for feedback on.  Good site, but you will spend hours trying to find information.  All ministries are represented.

There are plenty of good opportunities in Vietnam for investments, but you need deep pockets or a way to leverage debt.  For example the 50mw utility grade solar systems we have been involved in require about USD 48 million to execute.  Several of the projects used about USD 15 million in equity and financed the balance 70% through local Vietnamk banks at about 7% for 12 years with the financials remaining positive for the full term of the loan.  After 12 years you have 100% ownership of a USD 48 million project that will spin off profits of just over USD 6 million per year.  Assume you let profits ride, after 12 years you would have a networth of the project (equity + cash) of about USD 67 million and after 20 years a value of just over USD 100 million.  Not bad for a USD 15 million investment in a market that is hungry for electricity.

I'm going to save you some time. If this is where you are getting your information, don't even think about it!! You should seek a civilized country. The last reason to be in Vietnam is investment. One word: CORRUPTION.

When I first came to Vietnam in 2006, the chairman of our company bought a minority share in a nightclub in HCMC.  The purchase was strictly emotional to show everyone he was a big shot, the owner of the nightclub was the wife of the CEO of a large government owned company.  The nightclub opened and starting in the second month the nightclub was expected to pay an amount well into six figures each month.  We were able to get out with most of our investment returned - very lucky and the place folded within six months.  It turns out that they did not have a Business Registration certificate for a nightclub, they had one for a coffee shop expecting that their connections would carry them through any rough spots.

Yep. That is how they get us, I guess. Once you're committed financially, pardon my language, but, you are quite ***, and without Vaseline. Very sad but very true. And I say it not without anger. Can you blame me? I lost a whole lot more than just money. I can make money. I have been. But respect and a sense of pride are worth a lot more to me. And I am mad b/c they know they are wrong, yet still they do. But we live and we learn, right? Thanks for telling.

Interesting reading your posts. I break it down into 2 categories for our company: small - medium = bribing the police. Large = bribing high ranking government officials.
As you can tell I have a very cynical view of both Vietnam & Vietnamese.
Cheers!

It's all very well having the desire to do something, but the underlying issues is trust !. I've been invited to invest but being a cautious guy I always look at the willingness and ease of the other person to communicate openly and respond quickly to my questions. These tell me if the investment will be good for me, not just the other ( bipedal ATM syndrome) , getting things done here will require immense patience and understanding of the culture. 1 situation is the hydro dam in Chau Doc. 15 years of indecision can make you crazy. Good luck

Very well said.

Thang Le CFA wrote:

Every country has their own culture, especially Vietnam. don't trust numbers, trust the crowd and your intuition.

This sounds like the exact opposite of the advice on would get from any financial professional in any Western country.  It could be rephrased as: Don't use your head; follow the crowd and use your gut.     Ridiculous.

Even the locals get scammed by other vietnamese, i gave seen a few friends invest only for the other parties to vanish

THIGV wrote:

Thang Le CFA wrote:

Every country has their own culture, especially Vietnam. don't trust numbers, trust the crowd and your intuition.

This sounds like the exact opposite of the advice on would get from any financial professional in any Western country.  It could be rephrased as: Don't use your head; follow the crowd and use your gut.     Ridiculous.

Follow the crowd eh…..blindly over a cliff in a lot of cases.
It seems to be the way in VN.

Gambling is rampant . 

Where I am located , there's roughly 20,000 vacant apartments that simply won't sell & nobody to lease them to.  A lot of foreigners leaving will only worsen the situation.   2 bedroom, 2 bathroom furnished apartments..beachside , ocean views going for 3 million Dong Month.   Very poor yield.

Some desparate  owner/ investors are actually selling the furniture & appliances purely to eat. 
I know one personally that had a great investment plan…….followed the crowd again right😜

The silly bitch thought she'd become a money lender ( loan shark) .   So….she borrows money off the street thugs & other forms of pond scum around here & put a mark-up on it & lent it out to other desperates in the hope of making a profit.

That didn't end well……she's now on crutches.

Lots of domestic violence occurring now in tough times ….especially in tourist towns due to gambling & failed start-ups.    There's more beggars on the street now , than when I got here over 10 years ago.

Lots of University graduates are working for Grab …..that's not a good sign for the future.

Look at the reasons why Vinsmart phones, TVs & computers tanked.   Also Vinfast cars are only at 5% of sales targets .   SBV has directed the banks to restrict lending on property here as well. 

Toyota & Ford are reviewing their arrangements here & Industry 4 implementation will devastate the factory assembly work resulting in increased unemployment.   

You've got the problem of the majority of the population only earning less than $200 a month.   The main FDI partners here , Singapore, Japan , Korea, Taiwan etc have minimum wages  comparable to most western countries.   China being the biggest trading partner & the other ASEAN investors are clearly keeping their Boot on the back of the heads of the vIetnamese & keeping them in the game as the cheap sweat shop labourers . 

Joint business deals & arrangements are similar to a high stakes game of Poker.  There's a sucker in every deal.   So….when you sit down to that table & look around….if you can't see the mug or sucker,,,then your It. 😆

Don't bet on the mug.    If you want to put your money into SE Asia , go to the top of the food chain & this mob ain't there.

Unless of course you can own a Vietnamese Labour hire company .   Then you can employ local peasants & border hoppers from Laos & Cambodia to sew buttons on shirts & charge their labour out to those FDI multi nationals for triple what they pay them.

That's the big dollar game to be in here…..but it's a closed shop to blue eyed folk.

There's a guy here that's done very well in business consultation with the Multi Nationals. He's been here a long time & made very good money in Vietnam .  I know this guy & when asked what he's invested his own money in…..

His answer . Not one penny.
Why ,,,,
For the same reason you don't see the likes of Federer & Nadal buying & driving  Daewoo's.

My wife's village 'wives club' got taken for almost a Billion Dong from a childhood friend that had a T-Shirt factory, needed the money to pay salaries (or so she said). Police chased her all the way to Cambodia - came out she owes a lot of people -she will go to jail, but what about the people she scammed??  They will never get their money back.  I blame part of that on the banks, it is so hard for small business people to get a loan that they borrow from family and friends.  I hold no ill feelings toward her, Covid-19  has devistated small business owners all over the world.

Jlgarbutt wrote:

Even the locals get scammed by other vietnamese, i gave seen a few friends invest only for the other parties to vanish

That happens here a lot from what I have heard anyways. Borrowing from friends is common as is sob stories so as not to give back!!

goodolboy wrote:

Jlgarbutt wrote:

Even the locals get scammed by other vietnamese, i gave seen a few friends invest only for the other parties to vanish

That happens here a lot from what I have heard anyways. Borrowing from friends is common as is sob stories so as not to give back!!

Wasnt even a loan, friends with governemtn job invested in a restarant and even worked their of sn evening got scammed ... other share holder who had 70% stake (if they are to be believed) waited a yesr then opened another one in Phu Quoc... little surprise that the existing one in D2 got no futher investment and had to close ... no refumds, sorry..

goodolboy wrote:

Jlgarbutt wrote:

Even the locals get scammed by other vietnamese, i gave seen a few friends invest only for the other parties to vanish

That happens here a lot from what I have heard anyways. Borrowing from friends is common as is sob stories so as not to give back!!

Many dont borrow from banks due to wanting to go the easy road....loan sharks or friends. Loan sharks work hand in hand with police, remove this problem and people may start to use banks more.

colinoscapee wrote:

goodolboy wrote:

Jlgarbutt wrote:

Even the locals get scammed by other vietnamese, i gave seen a few friends invest only for the other parties to vanish

That happens here a lot from what I have heard anyways. Borrowing from friends is common as is sob stories so as not to give back!!

Many dont borrow from banks due to wanting to go the easy road....loan sharks or friends. Loan sharks work hand in hand with police, remove this problem and people may start to use banks more.

Thing is I dont think the banks will take a motorbike or I phone as collateral for a loan for cash to bet on the EURO 2020 games
Best investment for a goodolboy here is a goodol Vietnamese girl to take care of him.

goodolboy wrote:

colinoscapee wrote:

goodolboy wrote:

That happens here a lot from what I have heard anyways. Borrowing from friends is common as is sob stories so as not to give back!!

Many dont borrow from banks due to wanting to go the easy road....loan sharks or friends. Loan sharks work hand in hand with police, remove this problem and people may start to use banks more.

Thing is I dont think the banks will take a motorbike or I phone as collateral for a loan for cash to bet on the EURO 2020 games
Best investment for a goodolboy here is a goodol Vietnamese girl to take care of him.

I was wondering where you was going with that.. 😉

colinoscapee wrote:

Many dont borrow from banks due to wanting to go the easy road....loan sharks or friends.

Many can't qualify for bank loans so they resort to other means. Borrowing money from a bank here is the same in any other country, what's your income/assets you put down for collateral. Red or pink books are widely accepted.

CoderX10 wrote:

colinoscapee wrote:

Many dont borrow from banks due to wanting to go the easy road....loan sharks or friends.

Many can't qualify for bank loans so they resort to other means. Borrowing money from a bank here is the same in any other country, what's your income/assets you put down for collateral. Red or pink books are widely accepted.

Exactly.

Many dont trust banks. They could not borrow from banks so the path of least resistence is where they head, just like their friends and family before them.

CoderX10 wrote:

Borrowing money from a bank here is the same in any other country, what's your income/assets you put down for collateral. Red or pink books are widely accepted.

"What's your income?" is likely the problem for many.  What percentage of regular earners in Vietnam are reporting no income for taxes?  Do you think that lady in the wet market does?  Yet they seem able to purchase homes with cash.  For everyday Americans (not talking Jeff Bezos here) the most common reason the government prosecutes tax evasion is because of home buying by people with no or little declared income.  There is no reason that Vietnam can't do the same except that too many government officials would be caught in that net.

THIGV wrote:

What percentage of regular earners in Vietnam are reporting no income for taxes?  Do you think that lady in the wet market does?  Yet they seem able to purchase homes with cash.

Vendors at wet markets do pay tax. 

They don't need to report their income because they're in the category of household business, meaning the calculation of flat tax is based on the size of the stall and the kind of merchandises they sell.  Tax collectors come to the market to collect tax at the beginning of the year or beginning of the quarter depending on the license agreement.   Tax receipts are given to vendors and record is kept at the tax office.  There's no way a vendor can continue to do business without paying tax.  They may be able to fudge the true income to lower their tax obligation, but they cannot avoid tax altogether. 

Besides, household business tax is not something that would cripple the business owners.  Here's the break down:

- If the income is less than 100M/year or if the vendor doesn't have a permanent location, the business is exempted from tax.
- If the income is more than 100M but less than 300M, tax is calculated at 300k/yr.
- If the income is more than 300M but less than 500M, tax is calculated at 500k/yr.
- If the income is more than 500M, tax is calculated at 1M/yr.

It's the same with street food with permanent location.  It's the same with small restaurants, cafes, and general stores.  The Cuban/Mexican restaurant which I helped to open last year here in VT is in the same category, meaning no income reporting is needed because flat tax was already determined when business license was issued, then confirmed at the first visit from the tax evaluator.

CoderX10 wrote:

colinoscapee wrote:

Many dont borrow from banks due to wanting to go the easy road....loan sharks or friends.

Many can't qualify for bank loans so they resort to other means. Borrowing money from a bank here is the same in any other country, what's your income/assets you put down for collateral. Red or pink books are widely accepted.

Loan “serviceability “ is the main factor in loan approvals in Australian & other western financial institutions.  Taking collateral security is just a precaution really, since banks want simple income streams from P&I repayments. 

Once you get into loan arrears, non performing loans etc….they're high maintenance , the mortgagee in possession process & then the social impacts of selling up peoples homes is a scenario they'd rather avoid.   But here & a few other countries with shit credit ratings have a little trick of renegotiating loans to keep them off the NPL list.    They just draw a New loan to payout the old debt and start again….usually 3 to 6 months later …..ditto.

All they're doing is kicking the can down the road.

A local guy in my building “owns” 8 apartments …..only 3 tenanted at yields of 2%. 
Several others all jumped on the property bandwagon and are in the same boat……

The bank managers also take “coffee money” to approve loans that should have been declined & then the renegotiating process starts to keep things supposedly in order.   

That's why the SBV wants banks to restrict lending on property.   I read an article where there's 2 QUADRILLION VND of outstanding loans in that sector ,,,but that's what they'll admit too,,it's probably the tip of the iceberg.   But nobody has ever believed the figures coming out of these countries anyway so what do you believe here.

By the way…try fitting a Quadrillion on a calculator…..good luck😝