Development of Loan for Individual Customers at Eximbank in Lam Dong Province, Vietnam: Masters thesis of Business Administration

MEIHO UNIVERSITY

Graduate Institute of Business and Management

MASTERS THESIS

Development of Loan for

Individual Customers at EximBank

in Lam Dong Province, Vietnam

In partial fulfillment of the requirements for the degree of

Masters of Business Administration

Advisor: Dr. Chih-Shing Tau

Graduate Student: Le Quang Men

December, 2010

I

ACKNOWLEDGMENTS

First of all, I would highly like to thank the managing board of Industry University

of Ho Chi Minh City and MeiHo University, Taiwan, enabling me to participate in

training course of EMBA2, Taiwan in last two years.

I would highly thank Associate Professor, Ph.D. Le Van Tan, Deputy Rector,

University of Industry in Ho Chi Minh City; Associate Professor, Ph.D. Nguyen Minh

Tuan, Dean of Business Administration Department; Associate Professor, Ph.D. Vo

Phuoc Tan, Head of Post-Graduate Department, Industry University of Ho Chi Minh City,

has given me invaluable encouragement for motivating me to attend the course and

contributed comments to help me to complete this thesis.

I would also highly thank Mr.Chih-Shing Tau, Ph.D., Director, Associate professor,

Deparment of Information Management, MeiHo University, Taiwan; Ph.D. Bao Trung,

Deputy Head of Business Management, College of Management for Agriculture and

Rural Development, Ministry of Agriculture and Rural Development, Vietnam and

colleagues. Whether they have many responsibilities but they spent more time as well as

knowledge, often help motivate me a lot of issues during the research process, from

choosing topics, making research and writing final thesis.

Please thank the lecturers of Post-Graduate Department; the lecturers of Business

Administration Department; my classmates EMBA2-MU to help, support and encourage

me during last two years. The course has given me a good memory, facilitating access to

knowledge and new skills from lectures and classmates. And also the knowledge and

skills have helped me during the research, collecting data to complete the project.

I would also like to thank sincerely to the Rector, the members of the Board of the

MeiHo University; PhD. Ron-Chuen Yeh, Director of Institute of Business Management,

MeiHo University; professors, staff and administrative staff, MeiHo University, Taiwan

has committed to guide research, welcoming, warm caring, enthusiastic and impressed me

a beautiful, unforgettable while studying in school.

Please thank my classmate of Taiwan EMBA class, MeiHo University, Taiwan has a

lot of support to us during the course.

II

Finally, I would deeply like to grate to the members of my family, brothers, sisters,

friends and colleagues took the time to provide information, materials, suggestions for

additional editing conditions I have completed research projects. Especially love, care and

assistance, the sincere encouragement and valuable of lectures, classmates, colleagues

gave to me during the course.

Sincerely Yours,

Le Quang Men

III

Development of Loan for Individual Customers

at Eximbank in Lam Dong Province, Vietnam

ABSTRACT

Development of loan for individual customers in Lam Dong province plays an

important role for EXIMBANK Lam Dong. This research is carried out by qualitative and

quantitative method for purpose of finding factors affecting loan for individual customers.

The research discovered 3 group of factors such as: the first, lending services; the second,

lending procedures and the third, lending products. The research is conducted by deep

interviewing 200 individual customers in Lam Dong province.

The author studied the research topic “Development of loan for individual customers

on the Lam Dong province, Vietnam” to assess the actual situation of individual

customers who are borrowing, borrowing requirements, quality and customer service

procedures, which conditions, the lending process of this individual customer groups in

Lam Dong Province. Since then suggest solution for developing loans for individual

customers.

The research pointed out the factors affecting the development of personal loan

customers. Since then the authors propose solutions to develop this group.

The research showed the importance of individual customer groups in the province

of Lam Dong. Oriented development loans for individual customers on the Lam Dong

province, Vietnam brought a very important meaning for the individual customers have a

great influence to the capital structure, debt structure, customer structure and especially

the income from personal loans to customers decide to dominate big business efficiency.

Keywords: Individual Customer, Loan for Individual Customers, Procedure of Lending

for Individual Customers, Eximbank, Lam Dong, Vietnam.

V

Development of Loan for Individual Customers

at Eximbank in Lam Dong Province, Vietnam

Contents

ACKNOWLEDGMENTS .........................................................................................................I

ABSTRACT............................................................................................................................ III

Contents .................................................................................................................................. V

Tables ................................................................................................................................VII

Figures .............................................................................................................................. VIII

Chapter1 Introduction ............................................................................................................... 1

1.1 Background and Motivation ........................................................................................... 1

1.1.1 Research background............................................................................................... 1

1.1.2 Research motivation. ............................................................................................... 3

1.2 Research Goal and Objective.......................................................................................... 3

1.2.1 Research goal........................................................................................................... 3

1.2.2 Research objective. .................................................................................................. 4

1.3 Subject and Scope of Research....................................................................................... 4

1.3.1 Subject of research................................................................................................... 4

1.3.2 Scope of research..................................................................................................... 4

1.4 Definition of Terms ........................................................................................................ 4

Chapter2 Literature Review...................................................................................................... 6

2.1 The Concept of Lending ................................................................................................. 6

2.2 The Concept of Lending Process.................................................................................... 7

2.2.1 The importance of the lending process.................................................................... 7

2.2.2 Overall lending process. .......................................................................................... 8

2.3 Loan for Individual Customers ..................................................................................... 21

2.3.1 The concept of loan for individual customers. ...................................................... 21

2.3.2 Lending process for individual customers. ............................................................ 27

Chapter 3 Research Methodology........................................................................................... 29

3.1 Research Process........................................................................................................... 29

3.1.1 Qualitative method................................................................................................. 29

VI

3.1.2 Quantitative method............................................................................................... 30

3.2 Research Hypotheses .................................................................................................... 32

3.2.1 Model of banking service quality. ......................................................................... 32

3.2.2 Model of lending procedures. ................................................................................ 32

3.2.3 Model of diversified lending products................................................................... 32

3.3 Measurement Level....................................................................................................... 32

3.3.1 Measurement level for loan service quality for individual customers................... 33

3.3.2 Measurement level for lending procedures for individual customers.................... 33

3.3.3 Measurement level for lending products for individual customers. ...................... 34

Chapter 4 Research Results and Analysis............................................................................... 36

4.1 Current State of Loan Service for Individual Customers in Lam Dong Province........ 36

4.1.1 Current state of banking activities in lamdong provinces...................................... 36

4.1.2 Current status of banking activities of eximbank dalat.......................................... 39

4.2 Research Results........................................................................................................... 46

4.2.1 Description of samples and data cleansing. ........................................................... 47

4.2.2 Scale testing. .......................................................................................................... 49

4.2.3 Results of measurement level for loan service quality for individual customers. . 52

4.2.4 Results measurement level for lending procedures for individual customers. ...... 53

4.2.5 Result measurement level for lending products for individual customers............. 53

Chapter 5 Implications, Conclusions and Recommendations................................................. 56

5.1 Implication.................................................................................................................... 56

5.1.1 Improve service quality on lending for individual customers. .............................. 56

5.1.2 Improve procedures, conditions, documents aiming to simple administrative

procedures....................................................................................................................... 59

5.1.3 Lending products for individual customers meet demand on individual

customers; to meet on time, simple procedures based on local characteristics. ............. 61

5.1.4 Training often staff on knowledge and skills......................................................... 63

5.2 Conclusions................................................................................................................... 64

5.3 Recommendations......................................................................................................... 65

5.3.1 To governments and agencies................................................................................ 65

5.3.2 To state bank.......................................................................................................... 67

References............................................................................................................................... 69

Attachment 1........................................................................................................................... 70