Development of consumer loan at Joint Stock Commercial Bank for Investment and Development of Viet Nam – Bien Hoa branch, 2022

STATE BANK OF VIETNAM MINISTRY OF EDUCATION & TRAINING

HO CHI MINH UNIVERSITY OF BANKING

HO CHI MINH

UNIVERSITY OF BANKING

NGUYEN TRAN THAO UYEN

DEVELOPMENT OF CONSUMER LOAN AT JOINT STOCK

COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT

OF VIET NAM – BIEN HOA BRANCH

GRADUATION THESIS

THE MAJOR: FINANCE AND BANKING

CODE: 7 34 02 01

HO CHI MINH CITY, 2022

ii

STATE BANK OF VIETNAM MINISTRY OF EDUCATION &TRAINING

HO CHI MINH UNIVERSITY OF BANKING

STUDENT: NGUYEN TRAN THAO UYEN

STUDENT ID: 050607190627

CLASS: HQ7-GE18

DEVELOPMENT OF CONSUMER LOAN AT JOINT STOCK

COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT

OF VIET NAM – BIEN HOA BRANCH

GRADUATION THESIS

THE MAJOR: FINANCE AND BANKING

CODE: 7 34 02 01

SUPERVISOR

Associate Prf. Dr. HOANG THI THANH HANG

HO CHI MINH CITY, 2022

iii

ABSTRACT

Vietnam entered the middle income stage. The consumption activities of society are

increasing and the demand for consumer loans also increases. Consumer loan

activities are growing strongly in recent years. Although on the progress of

development, but on the bank's side, there are still some shortcomings affecting the

development of consumer loan. Therefore, it is necessary to have solutions to develop

consumer loans to ensure stable and sustainable growth. The research objective is to

analyze the current situation of consumer loan activities at BIDV- Bien Hoa branch.

From there, propose solutions to develop consumer loan activities at BIDV- Bien Hoa

branch. To achieve the set research objectives, the study mainly uses qualitative

research methods. Research results: the study has systematized the factors affecting

the development of consumer loan such as: environmental factors such as economic,

social, cultural, system policies and economic programs of the state. Factors from

customers include: legal capacity, credibility, collateral and financial ability of the

customer. Subjective factors affecting the development of consumer loans include:

Professional ethics of staff, techniques, procedures and process of application

appraisal. Consumer loan has seen growth in the number of customers, loan

outstanding balance and control of the bad debt ratio. Conclusion and implication:

Some shortcomings in the development of consumer loans at BIDV Bien Hoa branch

such as: unstable growth, undiversified products, low balance of outstanding loans,

bad debt ratio high in the bad debt structure of the bank. The author also proposes

some solutions to develop consumer loans at BIDV- Bien Hoa branch in the coming

time.

Keywords: consumer loan, commercial bank, BIDV.

iv

ACKNOWLEDGMENT

First of all, I would like to express my deepest gratitude to the teachers of Banking

University. Especially, I would like to thank my supervisor Associate Prf. Dr. Hoang

Thi Thanh Hang, who directly guided and imparted knowledge to me and helped me

a lot during the process of writing this thesis.

Besides, to be able to complete this thesis, it is impossible not to mention the great

support from the bank, Mr./Ms., individual customers at BIDV- Bien Hoa branch has

created favorable conditions, provided data to help me more convenient in survey and

evaluation.

I would also like to express my sincere thanks to my family and friends who have

encouraged and supported me throughout the process of studying and writing this

thesis.

Perhaps knowledge is infinite, but each person's acquisition of knowledge always has

certain limitations, so in the thesis it is inevitable that limitations and shortcomings

can be avoided. Sincerely hope to receive your sincere suggestions for the thesis to

achieve the best results.

Finally, I would like to wish the teachers of the Faculty of Finance and Banking,

Banking University of Ho Chi Minh City have health, happiness, success on her

teaching path. Wishing the leadership, brothers/sisters, customers at BIDV- Bien Hoa

Branch, more success in their work. We wish you more prosperity in the future.

Sincerely,

v

COMMITMENT

I hereby declare that this is the research work: "Development of consumer Loan at

Joint Stock Commercial Bank for Investment and Development of Viet Nam - Bien

Hoa branch". This is a post made by me under the guidance of Associate Prf. Dr.

Hoang Thi Thanh Hang. The content and research of this topic is honest and has not

been published in any way. In this report, there are references to some documents of

clear origin under the guidance of teachers of Faculty of Finance – Banking at

Banking University. The data in the tables of analysis, comments and reviews have

been collected by the author himself from various sources and are clearly shown in

the reference list.

Student’s Signature

Nguyen Tran Thao Uyen

vi

TABLE OF CONTENT

ABSTRACT............................................................................................................. iii

ACKNOWLEDGMENT..........................................................................................iv

COMMITMENT.......................................................................................................v

LIST OF ABBREVIATIONS...................................................................................x

LIST OF DIAGRAMS, TABLES AND FIGURES...............................................xi

INTRODUCTION.................................................................................................. vii

1. Rationale ..................................................................................................... vii

2. Research Objectives .................................................................................. viii

3. Research Questions.................................................................................... viii

4. The Scope of research...................................................................................ix

5. Literature review...........................................................................................ix

6. Research method......................................................................................... xii

CHAPTER 1: THE THEORY OF DEVELOPING CONSUMER LOAN AT

COMMERCIAL BANKS.........................................................................................1

1.1. Consumer loan activities of commercial banks.............................................1

1.1.1. The concept of consumer loan ..........................................................1

1.1.2. Characteristics of consumer loan ......................................................2

1.1.3. Classification of consumer loan ........................................................3

1.1.3.1. Based on the loan purpose ......................................................... 3

1.1.3.2. Based on the form of loan security ............................................ 4

1.1.3.3. Based on the repayment method................................................ 4

1.1.3.4. Based on the form of loan.......................................................... 4

1.2. Developing consumer loan activities of commercial banks..........................8

vii

1.2.1. The concept of development consumer loan activities of

commercial banks................................................................................................8

1.2.2. Criteria for evaluating the development of consumer loan activities

of commercial banks...........................................................................................9

1.2.2.1. Market share growth of consumer loan activities at commercial

banks …………………………………………………………………….9

1.2.2.2. Loan outstanding balance at commercial banks................................9

1.2.2.3. Non-performing consumer loan at commercial banks....................10

1.2.2.4. The profit of consumer loan at commercial banks..........................12

1.2.3. The experiences in development consumer loan activities of

commercial banks and the lessons for BIDV- Bien Hoa branch ......................12

1.2.3.1. Vietnam Bank for Agriculture and Rural Development

(Agribank)................................................................................................. 12

1.2.3.2. Vietnam Prosperity Joint Stock Commercial Bank (VPBank) 13

1.2.3.3. The lessons for BIDV- Bien Hoa branch................................. 14

SUMMARY OF THE CHAPTER 1......................................................................16

CHAPTER 2: THE SITUATION OF DEVELOPING CONSUMER LOAN

ACTIVITIES AT JOINT STOCK COMMERCIAL BANK FOR

INVESTMENT AND DEVELOPMENT OF VIETNAM - BIEN HOA

BRANCH. ................................................................................................................17

2.1. Overview of Joint Stock Commercial Bank for Investment and

Development of Vietnam......................................................................................17

2.1.1. History of the establishment and development of the Joint Stock

Commercial Bank for Investment and Development of Vietnam. ...................17

2.1.2. Functions and tasks of Joint Stock Commercial Bank for

Investment and Development of Vietnam – Bien Hoa branch. ........................19

viii

2.1.3. Functions and tasks of Joint Stock Commercial Bank for

Investment and Development of Vietnam – Bien Hoa branch. ........................20

2.1.4. Performance of Joint Stock Commercial Bank for Investment and

Development of Vietnam – Bien Hoa branch...................................................23

2.2. The situation of developing consumer loan activities at Joint Stock

Commercial Bank for Investment and Development of Vietnam – Bien Hoa

branch....................................................................................................................31

2.2.1. Market share growth of consumer loan activities at BIDV - Bien Hoa

branch................................................................................................................33

2.2.2. Loan outstanding balance growth at Joint Stock Commercial Bank for

Investment and Development of Vietnam – Bien Hoa branch. ........................36

2.2.3. Non-performing consumer loans at Joint Stock Commercial Bank

for Investment and Development of Vietnam – Bien Hoa branch....................38

2.2.4. The profit of loan at Joint Stock Commercial Bank for Investment

and Development of Vietnam – Bien Hoa branch ............................................40

2.3. Evaluating the results of the situation of consumer loan activities at Joint

Stock Commercial Bank for Investment and Development of Vietnam – Bien

Hoa branch ............................................................................................................42

2.3.1. The results...............................................................................................42

2.3.2. The limitations and the cause in consumer loan activities at Joint Stock

Commercial Bank for Investment and Development of Vietnam – Bien Hoa

branch................................................................................................................43

2.3.2.1 The limitations .............................................................................. 43

2.3.2.2. The causes.................................................................................... 43

SUMMARY OF THE CHAPTER 2......................................................................47

CHAPTER 3: SOLUTIONS TO DEVELOP CONSUMER LOAN ACTIVITIES

AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND