City police said the group has operated for six months, offering loans worth over VND100 billion (around $4.26 million) at 90 percent interest per month to 60,000 borrowers via three apps - vaytocdo, Moreloan and VDonline.

Two Chinese nationals Tu Long, 28, and Yuan Deng Hui, 29, are believed to have headed the operation. The three suspected Vietnamese accomplices are Chu Ngoc Trinh, 25, Lam Cam Quyen, 30, and Lai The Hung, 26.

The municipal investigating agency acted after receiving reports from people who’d borrowed money and were being threatened by gang members over delayed payments.

"The real leaders of the ring are two people living in China, Li and Miao. We haven't caught them yet since they managed the ring via phone and internet," police said.

According to the police, Li and Miao hired Tu Long and Yuan Dang Hui in April last year to set up financial companies in Saigon's Binh Tan District. The team then launched and advertised the three listed loan apps on social media like Facebook and via leaflets distributed on the street, offering people fast and easy loans without much paperwork.

Tu Long and Yuan Dang Hui employed nearly 40 customer service staff who instructed borrowers on downloading the company's apps on their phones. Customers had to provide personal information including ID card information and bank account numbers; and agree to seven mandatory terms which allows the app to access phone directories.

Their goal was to get the phone numbers of the borrower's relatives, colleagues and friends to use later for debt collection.

Depending on the app, a customer could borrow between VND1.5-3 million ($64-127), with service fees detected at source.

On the Vaytocdo app, for instance, for a loan of VND 1.7 million, the actual amount the customer receives is VND1.4 million after VND300,000 is charged as service fee. Within eight days, the borrower has to repay VND 2.04 million inclusive of principal and interest. The company would charge a late fee of VND100,000 ($4.26) per day.

MoreLoan and VD online give out loans worth VND1.5 million (customers get VND900,000 and pay VND600,000 in service fees and interest.) After a week, borrowers need to pay back the full VND 1.5 million and will have to pay 2-5 percent interest per day for late payment.

Customers are told that if they make their first payment on time, they can take out more loans in the future. The highest loan amount is VND3 million ($127).

Debt collectors would call to remind borrowers as the repayment date neared. They would also threaten to call the parents, spouses, other relatives and colleagues and ask them to repay the borrower’s debt.

The investigation agency determined that the interest rate charged on the loans amounted to 3 percent per day or 90 percent per month, 1,080 percent per year.

The debt collectors are paid a monthly salary of VND6 million (around $255).

The case is being investigated further, police said.