Các nhân tố ảnh hưởng tới hoạt động cho vay đối với doanh nghiệp siêu nhỏ của các ngân hàng thương mại việt nam TT TIENG ANH

1 INTRODUCTION The necessity of Research Commercial banks are an important channel of funds in the financial system Lending is an important business activity of commercial banks, bringing the main profits for them There have been many research about bank lending behaviors Many of the previous studies on commercial bank lending behavior have focused on bank lending to small and medium enterprises However, there have been a few researches - Based on the impact of factors affect commercial banks’ lending to microenterprises, what recommendations can be made to improve Vietnamese commercial banks’ lending to microenterprises? Subject and scope of the research The geographical scope of the study is in Vietnam The scope of the research period is the period 2011-2020 The thesis studies the impact of factors on the microenterprises lending of that examining the bank loans to micro enterprises Moreover, studies on micro enterprises lending are often about commercial banks’ microfinance activities with the commercial banks The study mainly focuses on reviewing, analyzing, evaluating and purpose of poverty reduction Most of the previous studies on commercial bank lending to microenterprises have been based on the demand side approach – access to in the context of Vietnam in the period 2011-2020 bank credit by micro and small enterprise There has been a lack of supply side approached papers Research methods Quantitative method: study using multivariable linear regression model and In all countries around the world, micro enterprises account for the largest proportion of the enterprise structure Micro enterprises have an active role in creating jobs, increasing the supply of goods and services, promoting competitiveness in the markets, and contributing to poverty reduction However, commercial banks have just focused on developing loans to small and medium-sized enterprises and large enterprises Although there are a number of commercial banks that have products specifically for this potential market, the ability to deploy products to customers is still quantifying the impact of factors on the microenterprises lending of commercial banks panel data for commercial banks in Vietnam in the period 2011 - 2020 Research using estimation methods Pooled OLS, Fixed Effects Method, Random Effects Methods, GMM on panel data to test the factors affecting microenterprises lending activities of Vietnamese commercial banks Thesis’s contributions Theorical contributions include: First, the research thesis has considered microenterprises as an dependent limited Moreover, micro enterprises have unique characteristics compared to other types of firms, so bank loans to micro enterprises must also be researched research object The research has also considered the microenterprises lending activities of commercial banks from the perspective of an activity that helps Due to the theoretical gap and the empirical gap on the studies about factors affecting bank lending to micro enterprises, the topic "Determinants of bank lending to microenterprises in Vietnam" was selected for research commercial banks achieve their profit goals Objectives and research question microenterprises lending growth and microenterprises lending propensity The overall objective of the thesis is to study the factors affecting Vietnamese commercial banks’ lending to microenterprises Regarding to the research objective as mentioned above, the thesis must answer the following research questions: - What factors affect commercial banks’ lending to microenterprises? - What is the current situations of factors affecting Vietnamese commercial banks’ lending to microenterprises? Second, the thesis has selected and adjusted the scale for evaluating bank lending to microenterprises The thesis uses two measures simultaneously, Third, the thesis has inherited and based on appropriate theoretical frameworks to propose a research model of factors affecting microenterprises lending activities Finally, the thesis uses secondary data to examine factors that affect bank lending to microenterprises in Vietnam This is a complete and up-to-date data set on the microenterprises lending activities of Vietnamese commercial banks with high reliability and the longest time period compared to the data used in previous studies in Vietnam 3 Besides theoretical contributions, the thesis has some practical contributions as follows: First, the thesis has found statistical evidence showing that the factors affecting the loans to microenterprises growth rate include both bank-specific factors and macroeconomic factors Second, the thesis has found statistical evidence showing that the factors affecting the propensity of bank lending to microenterprises include both bankspecific factors and bank industry factors Finally, based on the results of the study of the factors affecting the microenterprises lending activities of commercial banks, some recommendations for relevant organizations are given Thesis’s structure The thesis includes chapters Chapter 1: Literature review Chapter 2: Theorical framework on bank lending to microenterprises Chapter 3: Methodology Chapter 4: Research results Chapter 5: Discussion and Recommendations Research process CHAPTER 1: LITERATURE REVIEW 1.1 Foreign studies Line of research on issues in bank lending to micro enterprises: This line of research can be divided into main branches: Research that approach from the supply side (from commercial banks) or research that approach from the demand side (accessibility to commercial banks' capital of micro enterprises) Demand-side approach studies usually focuse on studying the accessibility of commercial banks' capital of small and medium (SME) enterprises Supply-side approach studies often clarify the problems in SME lending Line of research on factors affecting microenterprise lending activities: Studies in this line focus on clarifying the factors affecting micro enterprises lending activities of commercial banks Basically, the studies point out two main groups of factors, which are macroeconomic factors and bank-specific factors In general, research results in the world show that there are two groups of factors that have an impact on the lending activities of commercial banks: macroeconomic factors and bank-specific factors Macroeconomic factors include the business cycle and monetary policy Bank-specific factors include bank size, market The main research method applied to the research related to the topic is the quantitative research method The main research direction used in research works is exploratory factor analysis (using primary data collected from questionnaires/surveys) or testing the impact of factors by using regression models (employing secondary data) In terms of data collection and processing methods, the majority of studies on power of commercial banks, nonperforming loans, liquidity, profitability of commercial banks However, the results of empirical studies show conflicting effects small and medium enterprises in Vietnam use data from large-scale enterprise surveys conducted by large and reputative organizations This difference can be explained by the difference of policy institutions, socio-cultural characteristics, and economic characteristics in different research samples Moreover, In addition, other studies on lending to small and medium-sized enterprises it must be emphasized again that these studies only consider micro enterprises as a part of the overall research sample, but there is no study that specifically examines the relationship between the above factors for micro enterprises lending activities of commercial banks have all taken primary data from surveys conducted by the author or by the research team Some studies have used secondary data from commercial banks However, the scope of these studies is relatively narrow, taking place only at a branch of a commercial bank with a relatively short research period 1.2 Research in Vietnam 1.4 Research gap Regarding domestic studies related to lending activities of commercial banks: First, studies on bank lending to microenterprises have been conducted before, Through the review of domestic studies, it can be seen that the studies related to the lending activities of commercial banks as well as the research on access to capital but most of the researches have just raised problems that need to be examined With studies that evaluate and test the impact of factors, microenterprises are often placed in of enterprises are quite rich and complete, similar to lines of research that have been carried out in the world It can be seen that compared with studies in the world, the overall research as small and medium enterprises, but has not been considered as a separate research object domestic studies (or international studies in the context of the Vietnamese economy) have similarity in some factors affecting the ability to access to capital of enterprises, or factors affecting the lending activities of banks However, domestic studies have shown a number of factors that are typical of Vietnam However, there have been very few domestic studies on banks’ lending to micro enterprises in Vietnam Most studies still consider micro enterprises as a part of SME lending Regarding domestic studies in the direction of proposing solutions to deploy/develop micro enterprises lending activities of commercial banks: Second, studies on small and medium-sized enterprises show that there has been controversy among previous studies, especially on the factors that belong to the characteristics of commercial banks such as bank size or bank liquidity This difference may be due to the sample size, data sources, scales used and research model applied Third, previous studies on bank lending behavior often focused on credit growth, but did not consider lending propensity Analyzing both lending growth and lending propensity is necessary to be able to make an overall assessment of the lending Some studies have initially studied the theoretical framework of bank lending to micro enterprises and analyzed the current situation of bank loans to micro enterprises in Vietnam In addition, some studies have focused on proposing solutions to promote SME lending 1.3 Reviewing research methodologies activities of commercial banks Moreover, the scale used to measure the lending propensity of commercial banks is still a controversial issue among studies Fourth, studies that choose Vietnam as the research context mainly focus on small and medium enterprises The collected data used are also of small and medium enterprises This has created a research gap about factors affecting bank lending to Criteria Bank lending to microenterprises Customers CHAPTER 2: BANK LENDING TO MICROENTERPRISES – THEORICAL FRAMEWORKS 2.1 The concepts of microenterprises In Vietnam, the Government of Vietnam has issued Decree No 39/2018/NDCP that regulate the criteria for identifying small and medium enterprises Accordingly, microenterprises in agriculture, forestry, fishery, industrial and constructional sector have an average number of employees of no more than 10 people per year and total annual revenue of not more than billion VND or the total capital must not exceed billion VND Microenterprises in commercial and service sector have an average number of employees participating in social insurance of not more than 10 people per year and total annual revenue not exceeding 10 billion VND or total capital not exceeding billion VND This study examines Vietnamese microenterprises which have business registration and are classified as microenterprises according to the criteria specified in Decree No 39/2018/ND-CP of the Government 2.2 An overview of bank lending to microenterprises From the perspective of commercial banks, microenterprises are a group of corporate customers with the following characteristics: Regarding the level of risk: As analyzed above, many studies show that microenterprises are considered to be the most risky borrowers among all types of businesses This high level of risk stems from a variety of causes Regarding the number of customers: Microenterprises account for the largest proportion in the economy, accounting for 80% - 90% of the total number of enterprises in the economy Consequently, just a small part of microenterprises borrow money might created a huge number of customers for commercial banks Moreover, loans to SMEs often bear interest rates higher than the average interest rates in the market because it is difficult for SMEs to find alternative sources of capital They not have customer power as medium and large firms so they can not negotiate interest rates with commercial banks Table 2.1: Bank lending to microenterprises and microfinance: A comparison Criteria Microfinance microenterprises Bank lending to microenterprises Microfinance Firms that are classified as Household businesses, micro and microenterprises according to small enterprises, low-income the criteria specified in individuals in both urban and Decree No 39/2018/ND-CP rural areas of the Government Loan purpose Purchasing equipment, tools, Starting a firm or a household fixed assets, or financing business, or adding capital to an expenses related to the existing business for production operations of the firms to improve living standards Loan amount Small Small Goals Creating profits commercial banks for Meeting the financial needs of low-income people, helping them to conduct production, increase their income, improve their quality of life, and at the same time generate enough profit for commercial banks to cover their expenses for providing financial services (Pham Bich Lien, 2016) Source: Author’s own work - Lending technologies used by banks: Financial statement lending Asset-based lending - Credit score Relationship lending 2.3 The theory of factors affecting bank lending to micro enterprises Fundamental theories that related to bank lending include Credit Rationing Theory and Information Asymmetry Theory Determinants of bank lending to microenterprise can be divided into groups: external factors (including macroeconomic factors and bank industry specific factors) and internal factors (bank-specific factors) Based on the literature review, the author predicts possible determinants and the impact of these determinants on bank loans to microenterprises Macroeconomic determinants are: 10 - Concentration in the Banking Industry: High concentration levels might increase financial obstacles for firms In contrast, a highly competitive banking market can increase the funds provided to small businesses, especially in developing countries (Beck et al, 2004) - Inflation: High inflation might increase the nominal loan outstanding CHAPTER 3: METHODOLOGY However, high inflation might detrimental to real credit growth - Economic growth: Microenterprises are the most vulnerable group of firms to the changes in the economy Consequently, the thesis expects that bank lending to 3.1 Methodology microenterprises will increase when the economy expands and vice versa includes steps as follows: - Interest rate: Based on Credit Rationing Theory and Information Asymmetry Theory, the author believes that high interest rate can attract commercial bank to make loans to microenterprises Bank-specific determinants: - Bank size: Bank size might affect bank lending to microenterprises However the direction of the impact of this factor is still controversial in studies around world This study employs quantitative research methods The research process Step 1: Data collection and processing This study employs panel data analysis to examine the impact of macroeconomic and bank-specific determinants on bank lending to microenterprises in Vietnam Data used in the research are collected from data of commercial banks in 10 years (from 2010 to 2020) Step 2: Descriptive statistics and correlation coefficients between variables - Credit risk: The high non-performing loans ratio might impose negative impact on lending to microenterprises since many commercial banks consider small In this section, the basic characteristics of the data set will be described, in which mean value, maximum value, minimum value and standard deviation will be business lending as risky activities Therefore, banks will be less willing to lend to small business because they are afraid that small firms lending can become non- reported Bước 3: Testing and overcoming defects of the model performing loans Three tests are conducted to testing the defects of the model: heteroskedasticity - Bank’s profitability: According to Peek and Rosengren (1998), bank’s test, autocorrelation test and multicollinearity test profitability might increase the proportion of bank loans to microenterprises in the total bank loans In contrast, Carter and McNulty (2005) show that high profitability Step 4: Choosing appropriate estimation methods reduces the banks’ risk-taking incentives After performing diagnostic tests for possible defects of the model, in the next - Bank’s liquidity: Bank loans and bank liquidity have negative relationship When the amount of loans outstanding increases, the proportion of low liquid assets in step, the research will perform tests to select an appropriate panel data model Some econometric panel data models include: the total bank’s assets increases, too - The pooled regression model (Pooled OLS) - Bank’s deposits: Greater reliance on deposits could expose banks to greater monitor by depositors, and so banks that rely more heavily on deposits may have less - Random effects model - REM risk-taking behaviors than other banks and that might lead to a decrease in bank loans to microenterprises - Bank’s risk aversion: Bank’s risk aversion might affect bank’s willingness to lend as well as the lending capacity of commercial banks - Fixed effects model - FEM - Generalized Method of Moment - GMM Step 5: Determining the factors affecting the microenterprises lending of commercial banks using panel data regressions 3.2 Research model and Variables measurement 11 = + + 12 + Research framework: + In which Yi,t: dependent variable, measure lending to microenterprises of bank i in time t Xi,t bank-specific variables of bank i in time t Yt: macroeconomic variables in time t Zt: control variables β0: intercept : error term Table 3.1: Variables and Measure Variable Dependent variable Description Measure MLG Microenterprises growth lending Bank loans to microenterprises growth rate MLP Microenterprises propensity lending Microenterprises loans/ Business loans Independent variables SIZE Bank size Natural logarithm of total assets NPL Credit risk Non-perming loans/ total loans LIQ Bank liquidity Loans outstanding/ Total deposit ROA Profitability Net income/ Total assets EQTA Bank aversion Equity/ Total assets DEP Deposit Bank deposit/ Total assets GDP Economic growth rate Annual real GDP growth rate INF Inflation Annual inflation rate INR Interest rate Annual real interest rate Control variable HHI Market concentration HHI ratio Source: Author’s own work 3.3 Research hypothesis Model 1: , = + + , + + , , + + ! , + + ! , , + + " , + # + $ + + + " , + # + $ + , + , %% + , Model 2: , = , , , + , %% + , 13 14 Table 3.2: Summary of hypothesis Variables Model Model SIZE + NPL LIQ ROA + + EQTA + DEP GDP + INF INR + HHI - Pretax income/ total asset Micro enterprises Small enterprises -0,9 -0,2 -1,2 -0,1 -1,1 -0,3 -1,4 1,2 1,5 1,1 1,3 Large enterprises 3,7 3,9 3,6 3,8 Total 2,6 2,9 2,7 2,7 Medium enterprises Pretax income/ Total Equity Source: Author’s own work 3.4 Data Data about were collected from the Enterprise Survey of the General Statistics Office Data about bank lending to microenterprises were secondary data provided by Vietnam Credit Information Center (CIC) In order to create a symmetric data table, some commercial banks that not have enough observations are also removed Macroeconomic data were obtained from publicly and officially published data sources such as the World Bank, the General Statistics Office of Vietnam, the State Bank of Vietnam, and the Asia Development Bank Micro enterprises Small enterprises -1,9 -0,4 -2,5 -0,2 -2 -0,8 -2,7 Medium enterprises Large enterprises 3,4 13,6 4,9 15,6 3,4 13,1 4,2 14,3 8,2 10 7,6 8,7 Debt index 1,1 0,9 0,9 Total Micro enterprises Small enterprises Medium 1,5 1,7 1,6 1,6 enterprises Large enterprises 1,8 2,7 2,3 2,2 2,8 2,2 2,8 2,2 2,5 2,3 2,3 Total CHAPTER 4: RESEARCH RESULTS 4.1 Bank lending to microenterprises in Vietnam: Current situation analysis 4.1.1 Vietnamese microenterprises characteristics Table 4.1 Number of active microenterprises in Vietnam as of 31/12 Unit: enterprise Average of period 2017 2018 2019 Time 2011-2015 227.837 356.047 382.444 419.884 Microenterprises 377.898 560.413 610.637 689.136 Total enterprises 60,29% 63,53% 62,63% 60,93% Proportion Source: Ministry of Planning and Investment (2020) Source: Ministry of Planning and Investment (2020) Other financial indicators (ROS, ROA, ROE and Capital turnover ratio in 2018 (Figure 4.1) also indicate the poor performance of microenterprises in Vietnam ROS (%) ROE (%) ROA (%) Capital turnover ratio Table 4.2 Some financial indicators of Vietnam microenterprises Time Average of period 2011-2015 2017 2018 Debt ratio Average of period 2016 - 2018 -10 -5 Total Large enterprises Medium enterprises Small enterprises 10 15 Micro enterprises 15 16 Figure 4.1 Financial indicators of Vietnamese enterprises in 2018 Source: Ministry of Planning and Investment (2020) 4.1.2 Characteristics of banking system in Vietnam According to data published on the website of the State Bank of Vietnam (2021), as of December 31, 2020, the number of domestic commercial banks is 35 banks, There are state-owned commercial banks They are Vietnam bank for Agriculture and Rural Development (Agribank), Global Petro Sole Member Limited Commercial Bank (GP Bank), Ocean Commercial One Member Limited Liability Bank (Oceanbank), Vietnam Construction Bank (CB), Vietnam Joint Stock Commercial Bank (Vietinbank), Bank for Investment and Development of Vietnam (BIDV) and Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) In addition, there are 28 private joint stock commercial banks Table 4.3 Several financial indicators of Vietnamese commercial banks (As of 30/10/2020) Type of Total assets Charter Ratio of short-term funding capital to be used for medium- and Loan to Deposit commercial banks (billion VND) (billion VND) Ratio (%) long- term loans (%) State-owned Private- 5.442.886 155.248 29,75 81,97 owned 5.612.829 300.046 27,69 71,98 Total 11.055.715 455.294 Source: State Bank of Vietnam, 2021 Although the Covid 19 pandemic has imposed impact on the word economy as well as Vietnam’s economy in 2020, Vietnam’s commercial banking system had a strong year of development The net profit growth rate in 2020 is 15.1% 4.1.3 Bank lending to microenterprises in Vietnam in period 2011 - 2020 Table 4.4: Legal framework for bank lending to microenterprises in Vietnam Documents Enactors Issue time Law on the State Bank of Vietnam No The National Assembly 46/2010/QH12 16/06/2010 Law on Credit 47/2010/QH12 16/06/2010 No The National Assembly 20/11/2017 Regulations relating to bank lending Circular No 22/2019/TT-NHNN on The State prescribing limits and prudential ratios in Vietnam operations of banks and foreign bank branches Bank of 15/11/2019 Circular No 39/2016/TT-NHNN on The State prescribing lending transactions of credit Vietnam institutions and/or foreign bank branches with customers Bank of 31/12/2016 Decree 21/2021/ND-CP on guiding the The Government implementation of the Civil Code on Vietnam securing the performance of obligations of 19/03/2021 Regulations relating to microenterprises Decree No 56/2009/ND-CP on assistance The Government to the development of small- and medium- Vietnam sized enterprises of 30/06/2009 Decision No 1231/QD-TTg of September Prime Minister 07, 2012, approving the plan for Vietnam developing medium and small enterprises 2011 – 2015 of 07/09/2012 Law on support for Small- and Medium- The National Assembly sized Enterprises Decree No 39/2018/ND-CP dated March The Government 11, 2018 of the Government on detailing a Vietnam number of Articles of the laws on small and medium-sized enterprises 12/06/2017 of 11/03/2018 Source: author’s own work Legal framework for commercial banks’ activities institutions Law amending and supplementing the The National Assembly Law on Credit Institutions Bank lending to microenterprises in Vietnam have had many positive changes over time Vietnamese commercial banks have launched loan product packages aimed at microenterprises Although banks in Vietnam have paid more attention to micro enterprises customers and launched specific lending products for this audience, bank loans to microenterprises are relatively limited, as shown by the low balance of 17 18 microenterprises loans of Vietnamese commercial banks In addition, the growth rate of outstanding loans to microenterprises is relatively slow as well as the proportion of microenterprises loans in total outstanding loans to businesses of commercial banks is still a rather modest figure * SIZE variable in this table is displayed in millions VND, while converted to logarithm when included in the regressions Source: Author’s own calculations Cross-correlation testing between the independent variables shows that the correlation coefficients are all less than 0.8, which indicates that multicollinearity may not occur in the model, that is, there is no significant cross-correlation between the two variables variables that can affect the model estimation results Correlation of 2020 Year 2019 2018 variables in models and shows that the cross-correlation coefficients receive low values Therefore, the model is unlikely to have multicollinearity 2017 2016 Table 4.6: VIF - 20.000 40.000 60.000 80.000 Variable Figure 4.2 Bank loans to microenterprises Source: Author’s own calculations 4.2 Research results Table 4.5 Descriptive statistics Variable Number of observations Mean Standard Deviation Min Max 6.56 5.50 INR GDP DEP 4.63 4.59 1.73 SIZE EQTA 1.53 1.50 1.33 1.32 1.15 2.98 MLP 260 0.0276061 0.0309327 0.0037670 MLG 260 0.262412 0.3675736 -0.0510647 1.649651 LIQ ROA NPL SIZE* 260 2.76e+08 3.36e+08 1.47e+07 1.57e+09 Mean VIF EQTA 260 0.0880186 0.0386486 0.0262971 0.2383814 ROA 260 0.0074493 0.0070697 -0.0551175 0.0263647 NPL 260 0.0226941 0.0153121 0.0002 0.114 LIQ 260 0.8575835 0.1774331 0.3718736 1.805003 DEP 260 0.6721042 0.1254867 0.2508404 0.930178 HHI 260 0.082575 0.0024459 0.0772579 0.0854923 GDP 260 0.0615 0.121167 0.029 0.071 INF 260 0.054806 0.0492749 0.00631 0.18678 INR 260 0.039257 0.0286482 -0.03552 0.07322 0.1932012 VIF HHI INF Source: Author’s own calculations in STATA Based on the results, it can be seen that the VIF coefficient of the independent variables in the model is less than 10, so the model does not have multicollinearity There are most common estimation method for panel data regression: Pooled OLS, REM, FEM To select the most appropriate model, there are several tests that can be done: Table 4.7: Hausman test Hausman test Model Model prob > chi-square 0.000 0.000 Source: Author’s own calculations in STATA 19 20 The Hausman test results show that FEM is more appropriately used in estimating panel data in both models Table 4.8: F-Test F-Test prob > F Model Model 0.0000 0.0000 Hausman Test F-test Hansen Test AR(2) 0.0000 0.0000 0.139 0.185 (*) p < 10%, (**) p < 5% and (***) p < 1% Source: Author’s own calculations in STATA Source: Author’s own calculations in STATA Table 4.10: Estimated results of model P-value < 0.01 in both models Therefore, we should reject hypothesis H0 and accept hypothesis H1 Thus, the FEM is more suitable than Pooled OLS in both models In order to ensure the accuracy of the estimate using the FEM model, some diagnostic tests should be conducted The thesis tests autocorrelation by Wooldridge test for autocorrelation in panel data The test results show that the model appears autocorrelation The thesis also tests heteroskedasticity by employing Modified Wald test for groupwise heteroskedasticity in fixed effect regression model The test results show that the model has heteroskedasticity To overcome these defects, the thesis selects the generalized moment estimation method (GMM) GMM is also a suitable estimation method for large N and small T research sample Moreover, the generalized moment estimation method (GMM) can deal with endogeneity bias Table 4.9: Estimated results of model Variables L.MLG SIZE NPL LIQ ROA EQTA DEP GDP INF INR HHI _cons Pooled OLS -0.007725 2.808622* -0.296641*** 6.961665 -0.253268 -0.409919** 0.754778 0.809173 1.532281 31.73632* -1.926316 REM -0.003047 3.479549 -0.322707** 4.526818 0.38976 -0.367214* 0.504657 0.238613 0.967525 32.62514* -2.083653 FEM -0.319837*** 4.000768** -0.09872 3.194418 0.72143 -0.10319 -3.579312 -4.796798** -3.180139 42.50815** 3.311784 GMM 0.1475** 0.074715* -7.703129* -0.107953 -18.96071 2.119042 -0.65829*** 3.539552* 3.789411*** 1.088935 -13.5112 0.405872 Variable L.MLP SIZE NPL LIQ ROA EQTA DEP GDP INF INR HHI _cons Hausman Test F-test Hansen Test AR(2) Pooled OLS REM -0.0301844*** -0.1351021 0.1261151*** 0.8684064 -0.3526017* 0.2607389*** -0.127402 -0.4294127 -0.1862269 1.325391 0.338418 -0.0130458 0.223163 0.0176895 1.271084** -0.211956 0.0517303 -0.4142862* -0.3945645 -0.3955954 1.537381 0.2327098 FEM -0.0049538* -0.2758757 0.0009339 1.250078** -0.1693594 0.025953 -0.3840376* -0.3406377 -0.3545915** 1.509571 0.1035437 GMM 0.8328577*** -0.0212502** -0.7618412* -0.0124906 6.509952*** -0.5060348* 0.0294563 -0.2127078 -0.0729382 0.1687821 3.156445* 0.1321698 0.0000 0.0000 0.153 0.329 (*) p < 10%, (**) p < 5% and (***) p < 1% Source: Author’s own calculations in STATA CHAPTER 5: DISCUSSION AND RECOMMENDATIONS 5.1 Discussion Table 5.1: Summary of research results Variables Model Statistical Model significance Statistical significance SIZE + Yes - Yes NPL - Yes - Yes 21 22 (1) Develop strategies and goals for the loans to microenterprises; (2) The Board of LIQ - - ROA - + Yes EQTA + - Yes DEP - Yes + GDP + Yes - INF + Yes - INR + + HHI - + Management develops specific strategies and to follow the above orientation goals; (3) Increase the awareness of staff in commercial banks about the banks’ strategies for bank lending to microenterprises 5.2.1.4 Strengthening the risk management of commercial banks Reason for recommendation: Research results show that banks with high NPL ratio will reduce both the growth of outstanding loans to microenterprises and the proportion of loans to microenterprises in their total outstanding business loans Yes Source: Author’s own calculations in STATA 5.2 Recommendations 5.2.1 Recommendations for commercial banks 5.2.1.1 Developing loan products for microenterprises Recommendation: Commercial banks need to develop a risk management strategy suitable for their bank Commercial banks also need to operate according to a reasonable credit granting process Commercial banks should consider changes in economic conditions when assessing credit risks, thereby building an early warning system and preparing scenarios to deal with potential credit risks when there are changes anomalies of the future economy Reason for recommendation: Microenterprises have difficulty in accessing bank loans since they lack knowledge and experience in operational management and financial management Recommendations: Commercial banks need to develop lending processes and factor for the success of commercial banks' microenterprises lending Recommendation: Commercial banks can improve the quality of human lending products in accordance with the characteristics of microenterprises, in which to strengthen the application of microenterprises lending techniques based on "hard" resources for microenterprises lending through the following measures: - Strengthen human resource training for microenterprises lending activities information This will help commercial banks save a lot of costs and human resources for microenterprises lending activities - Build a motivational mechanism 5.2.1.6 Diversifying banks’ sources of funds Reason for recommendation: The research results show that banks that rely much on deposits will reduce loans to microenterprises growth 5.2.1.2 Strengthening banks’ competitive capabilities Reason for recommendation: Research results show that commercial banks with higher market power are more likely to lend to microenterprises Moreover, the research results also show a positive effect of bank size on the growth of 5.2.1.5 Improving the quality of human resources Reason for recommendation: The quality of human resources is an important Recommendation: Commercial banks can reduce their dependence on capital mobilized from customers' deposits through the issuance of financial instruments such microenterprises lending activities Recommendations: Increasing the competitiveness of commercial banks can be as promissory notes and bonds accomplished through increasing the size and increasing market power of commercial banks 5.2.2.1 Completing accounting system at microenterprises 5.2.1.3 Strengthening the administration and management of DNS lending activities Reason for recommendation: How the microenterprises lending activities develop depends greatly on the strategic direction of each commercial bank Recommendations: In order to strengthen the governance and management of DNS lending activities, commercial banks can take a number of measures as follows: 5.2.2 Recommendations for microenterprises Reason for recommendation: Reducing the problem of information asymmetry, increase banks’ accessibility to bank loans Recommendation: Microenterprises can increase the level of information transparency by (1) Implementing appropriate accounting standards and (2) Applying technologies to accounting systems 23 5.2.2.2 Improving the quality of human capital in microenterprises Reason for recommendation: Banks will evaluate the owners/ managers of microenterprises for credit decisions Recommendation: In order to improve the quality of human capital, 24 Expanding the research sample by branch of each commercial bank to have a more detailed view of the microenterprises lending activities of commercial banks; (4) Carrying out demand-side approach studies to assess the ability of Vietnamese microenterprises to access loans from commercial banks microenterprises can make the following recommendations: (1) microenterprises’ owners/managers should participate in training programs to improve management CONCLUSION qualifications and skills; (2) Training for microenterprises’ personnel is also an issue that microenterprises need to focus on Third, the owner/manager of microenterprises The thesis has studied determinants of bank lending to microenterprises in Vietnam and pointed out the impact of these factors on the microenterprises lending in should join industry associations and business associations the period 2011-2020 5.2.3 Recommendations for regulatory authorities The research results have shown that bank lending to microenterprises in Vietnam are affected by macroeconomic factors, market characteristics of the 5.2.3.1 Developing supporting policies for microenterprises Reason for recommendation: Increase microenterprises’ finance accessibility Implementing agency: Government Recommendation: The government should have policies to guide and encourage microenterprises to report their activities in accordance with accounting standards In addition, the Government continues to support credit policies for microenterprises 5.2.3.2 Recommendations on promoting economic growth and maintaining low and stable inflation Reason for recommendation: Bank lending to microenterprises is affected by macroeconomic variables such as GDP and inflation Implementing agency: Government, State Bank of Vietnam Recommendations: Regarding fiscal policy, fiscal policy can play an important role in economic growth In the short term, countercyclical fiscal expansion could help support aggregate demand and growth during cyclical downturns Regarding monetary policy, the SBV needs to operate monetary policy in an expansionary direction to promote economic growth 5.3 Limitations and further research Some research results have a change in the impact direction compared to the author's expectation and compared with previous studies This may stem from the data and actual conditions of Vietnamese commercial banks In further research, the author would like to suggest some research directions: (1) Using some other variables as representative of the microenterprises lending activities of commercial banks, (2) Expanding further research on the effect the impact of specific factors of commercial banks on the microenterprises lending activities; (3) commercial banking industry and bank-specific factors The above research results are compared with the results of previous studies At the same time, based on the research results, policy recommendations have been made in order to contribute to increasing the microenterprises loans of commercial banks The theoretical and practical contributions of the topic have also been raised In addition, the limitations of the topic as well as further research directions have also been proposed by the thesis  ... Vietnam Construction Bank (CB), Vietnam Joint Stock Commercial Bank (Vietinbank), Bank for Investment and Development of Vietnam (BIDV) and Joint Stock Commercial Bank for Foreign Trade of Vietnam... in Vietnam have had many positive changes over time Vietnamese commercial banks have launched loan product packages aimed at microenterprises Although banks in Vietnam have paid more attention... 455.294 Source: State Bank of Vietnam, 2021 Although the Covid 19 pandemic has imposed impact on the word economy as well as Vietnam’s economy in 2020, Vietnam’s commercial banking system had