Factors affecting the decision to use finance leasing for small and medium enterprises (SMEs) in Ho Chi Minh city, 2021

THE STATE BANK OF VIETNAM - MINISTRY OF EDUCATION & TRAINING

BANKING UNIVERSITY OF HO CHI MINH CITY

BUI THI THANH THUY

FACTORS AFFECTING THE DECISION TO USE

FINANCE LEASING FOR SMALL AND MEDIUM

ENTERPRISES ( SMEs) IN HO CHI MINH CITY

Candidate: Bùi Thị Thanh Thúy

Class: HQ5-GE03

Student ID: 030805170037

Supervisor: Ph.D. Trần Trọng Huy

Ho Chi Minh City – 2021

THE STATE BANK OF VIETNAM - MINISTRY OF EDUCATION & TRAINING

BANKING UNIVERSITY OF HO CHI MINH CITY

BUI THI THANH THUY

FACTORS AFFECTING THE DECISION TO USE

FINANCE LEASING FOR SMALL AND MEDIUM

ENTERPRISES ( SMEs) IN HO CHI MINH CITY

Candidate: Bùi Thị Thanh Thúy

CLASS: HQ5-GE03

Student ID: 030805170037

Supervisor: Ph.D. Trần Trọng Huy

Ho Chi Minh City – 2021

i

ABSTRACT

The formation and development of Vietnam's financial leasing market is an objective

necessity, creating a new capital channel for the economy, especially medium and long￾term capital, creating favorable conditions for businesses The card has easy access to

capital in order to modernize production technology and improve product quality.

However, this market is still new and Vietnamese businesses have not really taken

advantage of the utility of this financial leasing product. Therefore, determining which

factors affect the decision to use financial services is always an objective and should be

considered in the research. Up to now, in Vietnam, there have not been many published

studies on the financial leasing field or assessing the competitiveness of financial leasing

companies.

Recognizing the contributions of the financial leasing market to the economy as well as

to businesses, the thesis focuses on the issue of “Factors affecting the decision to use

finance leasing for small and medium enterprises ( SMEs ) in Ho Chi Minh city” aims

to provide financial leasing companies with a systematic basis of theory and empirical

evidence related to factors affecting the decision to use financial services for customers.

small and medium enterprises in Ho Chi Minh City in the near future

Based on the importance and necessity, the objective of this study is to determine the

factors and the degree of influence of each factor on supporting competitiveness as well

as increasing the market share of this type of financial leasing companies in Ho Chi Minh

City, and make recommendations to strengthen support for this activity. The results

obtained from this study are intended to provide more quantitative scientific evidence to

answer which factors and how much influence each factor has on the decision to use

financial services for small businesses and individuals in Ho Chi Minh City

A large-scale survey was conducted with customers of financial leasing companies with

226 questionnaire samples providing information for the study. Using EFA analysis and

regression model, I found that: Reputation of the financial leasing company; Competitive

price; Service /Staff's attitude; Application processes; Social influence, Appropriate

policies and products and Awareness of financial leasing opportunities are positively

related to the development promotion for the financial leasing market.

From the research results, I propose some recommendations to improve the ability to

attract potential customers to help the financial leasing market develop in accordance

with its importance in Vietnam's economic development in general and Ho Chi Minh

City in particular in the coming time.

iii

DECLARATION

Candidate’s Declaration

I hereby declare that this dissertation is the result of my own original research and that

to the best of my knowledge no part of it has been published by another person or

presented for another degree in this university or elsewhere except where due

acknowledgement has been made in the text.

Candidate’s Signature: ........................................... Date: …………………….

Name: Bui Thi Thanh Thuy

DEDICATION

First and foremost, I would like to express my heartfelt gratitude to the lecturers at Ho

Chi Minh City's Banking University, who actively taught and imparted excellent core

knowledge to assist me in successfully completing my university program.

I want to express my gratitude to Mr. Tran Trong Huy in particular for his thorough

advice and passionate assistance in completing my graduation thesis. I would not have

been able to finish this thesis without your passionate support.

Because of my lack of practical experience, the substance of my graduation thesis is

bound to have some flaws. I look forward to obtaining additional advice from lecturers

in order to gain more experiences. These experiences, I believe, are highly valuable in

terms of helping me grow as a person in the future.

Thank you sincerely!

v

LIST OF ACRONYMS.................................................................................................ix

LIST OF TABLES .........................................................................................................x

LIST OF PICTURES.....................................................................................................x

CHAPTER 1. INTRODUCE.........................................................................................1

1.1 BACKGROUND OF THE STUDY ................................................................1

1.2 OBJECTIVE .........................................................................................................2

1.3 RESEARCH QUESTIONS..................................................................................3

1.4 SUBJECT AND SCOPE ......................................................................................3

1.5 METHODOLOGY ...............................................................................................3

1.6 SIGNIFICANCE OF THE RESEARCH .......................................................4

1.7 STRUCTURE OF THE RESEARCH ................................................................4

CHAPTER 2. THEORETICAL LITERATURE........................................................6

2.1 OVERVIEW OF FINANCIAL LEASING ....................................................6

2.1.1 The concept of financial leasing...................................................................6

2.1.2 Features of financial leasing.........................................................................8

2.1.3 The popular types of financial leasing in Vietnam.....................................9

2.1.3.1 Domestic finance leasing........................................................................9

2.1.3.2 Imported finance leasing......................................................................11

2.1.3.3 Sales and lease back .............................................................................12

2.1.3.4 Finance lease for operating lease ........................................................13

2.1.4 The role of financial leasing .......................................................................13

2.1.4.1 Contributing to attracting investment capital for the economy ......13

2.1.4.2 Contributing to promoting technology and equipment innovation.14

2.1.4.3 Supporting businesses in structuring reasonable business capital..14

2.2 CONCEPTS OF SMALL AND MEDIUM ENTERPRISES .....................15

2.2.1 Definitons of small and medium enterprises ............................................15

2.2.2 Features of small and medium enterprises...............................................19

2.3 THEORETICAL BACKGROUND..............................................................21

2.3.1 Theory of reasoned action (TRA)..............................................................21

2.3.2 Theory of consumer behavior ....................................................................22

2.3.3 Process of purchase decision ......................................................................23

2.4 LITERATURE REVIEW..............................................................................25

2.4.1 Studies in some other countries .................................................................25

2.4.2 Studies in Vietnam ......................................................................................27

CHAPTER 3. DATA AND RESEARCH METHODS .............................................35

3.1 PROPOSED RESEARCH PROCESS..........................................................35

3.2 RESEARCH MODEL AND RESEARCH HYPOTHESIS........................36

3.2.1 Reseach model .............................................................................................36

3.2.2 Research hypothesis....................................................................................37

3.2.2.1 Competitive price .................................................................................37

3.2.2.2 Application process ..............................................................................37

3.2.2.3 Service/Staff’s attitude .........................................................................37

3.2.2.4 Awareness of financial leasing opportunities.....................................38

3.2.2.5 Reputation of financial leasing company ...........................................38

vii

3.2.2.6 Appropriate policy and products........................................................39

3.2.2.7 Social influence .....................................................................................39

3.3 RESEARCH SCALE......................................................................................40

3.4 SAMPLING METHOD .................................................................................43

3.5 DATA ANALYSIS METHODS ....................................................................44

3.5.1 Evaluate the reliability of the scales by Cronbach’s Alpha test .............44

3.5.2 Exploratory factor analysis (EFA) ............................................................45

3.5.3 Linear regression analysis..........................................................................46

CHAPTER 4. RESULTS OF EXPERIMENTAL RESEARCH .............................48

4.1 INTRODUCE OF FINANCIAL LEASING COMPANIES IN VIETNAM .48

4.2 RESEARCH RESULTS.....................................................................................53

4.2.1 Survey sample characteristics ........................................................................53

4.2.2 Evaluate the reliability of the scales by Cronbach’s Alpha test..................54

4.2.2.1 Testing the reliability of the scale by Cronbach's Alpha coefficient

for the independent variable .............................................................................54

4.2.2.2 Testing the reliability of the scale using Cronbach's Alpha coefficient

for the dependent variable ................................................................................58

4.2.3 Exploratory factor analysis (EFA).................................................................58

4.2.3.1. EFA factor analysis for the independent variable....................................58

4.2.3.2. EFA factor analysis for the dependent variable .......................................60

4.2.4 Regression analysis..........................................................................................61

4.2.5 Detecting necessary assumption violations....................................................63

4.3 DISCUSSION RESEARCH RESULTS ...........................................................64

CHAPTER 5. CONCLUSIONS AND RECOMMENDATIONS ............................69

5.1 SUMMARY CONCLUSION OF THE STUDY ..............................................69

5.2 RECOMMENDATIONS ...................................................................................70

5.3 LIMITATIONS OF RESEARCH AND FUTURE RESEARCH ..................72

5.3.1 Limitations of research....................................................................................72

5.3.2 Future research directions..............................................................................73

REFERENCES.............................................................................................................74

APPENDIX 1 ....................................................................................................................

APPENDIX 2 ....................................................................................................................