Five fintech companies holding 90% of Vietnam’s payment market share have foreign ownership ranging from 30% - 90%, according to Nghiem Thanh Son, deputy director of Payment Department under the State Bank of Vietnam (SBV).
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Moreover, foreign companies holding large share amount at Vietnam’s leading fintech companies could lead to the risk of market manipulation, Son stressed.
According to Son, the SBV is drafting up regulation to limit foreign ownership at fintech payment companies at the maximum of 30% of 49%, including both direct and indirect ownership.
The SBV has taken into account the possibility of foreign investors holding stake through a subsidiary or affiliate in Vietnam, therefore, the maximum stake amount would include both direct and indirect stake ownership, Son continued.
However, from the market’s perspective, experts at the conference said restriction in foreign ownership at fintech payment companies could hinder their development.
Phung Anh Tuan, secretary general of the Vietnam Association of Financial Investors (VAFI), said fintech companies are in need of capital for operation expansion. In this regard, the limitation of foreign investment could affect their ability in fundraising, and ultimately future development.
The government has permitted wholly foreign-owned banks to operate in Vietnam, as well as considering to relax foreign ownership limit at commercial banks, Tuan said, adding the government should not apply the existing limitation of foreign participation in the banking sector for fintech.
Vice President of Singapore Fintech Association Varun Mittal said for Vietnamese fintech to reach regional level, government agencies should create conditions for them to expand and access new sources of capital.
According to Mittal, these fintech companies are very ambitious but the most important issue would be to secure sufficient funds for operation and rapid development, while ensuring full compliance to the current legislation.
At the Vietnam Business Forum 2019 in June, representative of the American Chamber of Commerce (AmCham) proposed not to apply foreign ownership limit in fintech payment companies.
AmCham’s representative added the growth of financial services and fintech in Vietnam would depend on the implementation of appropriate legal framework and investment policies. However, a limitation in foreign ownership is seen as considerable obstruction to fundraising capability of Vietnamese fintech companies.
