UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE NETHERLANDS VIE1NAM NETHERLANDS PROJECT FOR M A ON DEVELOPMENT ECONOMICS DETERMINANTS OF ABILITY GETTING BANK''''S L[.]
UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM NETHERLANDS VIE1NAM-NETHERLANDS PROJECT FOR M.A ON DEVELOPMENT ECONOMICS DETERMINANTS OF ABILITY GETTING BANK'S LOAN CASE OF ENTERPRISES LOCATED IN IP & EPZ IN HOCHIMINH CITY A thesis submitted in partial fulfillment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS BY LAM CANH DUONG BQ GIAO Dl)C VA fJAO T/·C> • TRLIClNG E>H KINH TE TP HCM I THU VI:¢N ( bI Ab S"\) l Ho Chi Minh City, November 2007 Academic Supervisor: Dr VO THI QUY CERTIFICATION "I certificate that the thesis is my own research working The data and result which mentioned in the thesis are honest and have been not submitted for any degree" Signature Lam Canh Duong ACKNOWLEDGMENT I would like to express my appreciation to the following people who helped me to achieve this thesis and without them; I could not get successful results First of all, I would like to thank the following individuals and organization for their helpful supports Doctor Vo Thi Quy, the academic supervisor in the domain of learning, she, who has spent much time in advising to this essay Her ideas and comments that helped my thesis much more clear and coherent I would like to thank, particularly, Doctor Nguyen Trong Hoai, who has given me much valuable advices and necessary skills to orient and consolidate my point of view so far during my statement this thesis I would like to thank to all Lecturers and Staff of Vietnam-Netherlands' Project for Master on Development Economics, thank to this helpful program, I have improved my knowledge as well as understanding a basic development economics and a method of science studying which meet international standard In addition, it seems appropriate to acknowledge all of my colleagues whose have been so helpful during my studying course by their assistances, encouragements and cooperation as well as sharing their hands during my preparation ofthis composition Finally, I would like to thank all of my family members who have helped and encouraged me much more since the beginning until achievement this thesis ii ABSTRACT Credit capital is one of main resources of financing for Enterprises in developing countries; Vietnam is going on the way of modernization and industrialization the economy; the developing of Industrial Parks and Export-processing Zones role important for the growth of the economy Enterprises doing business in Industrial Parks and Export-processing Zones have demand for banks' Loan, but there are many factors that effect Enterprises' ability to borrow from banks Base on practically of Vietnam and data survey, this thesis investigates determinants of ability getting banks' Loan case of Enterprise operating in Industrial Parks and Export-processing Zones in Hochiminh City It is figured out that besides collateral as a decisive factor, two main factors distributing important role in the process of applying and getting Loan are character and capacity of Enterprises Thus, for enterprise wishing to borrow from bank, they should improve their character and capacity In other hand, Banks that want to speed up sustainable developing in this market, they should have attention on their credit policy that concentrate to explore these conditions mentioned iii TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.1 Background 1.2 Research question 1.3 Scope of study 1.4 Methodology 1.5 The structure of thesis CHAPTER II: THE SITUATION OF CREDIT ACTIVITY IN INDUSTRIAL PARKS AND EXPORT PROCESSING ZONES IN HOCHIMINH CITY 2.1 The process offorming and the role ofiPs & EPZs in Vietnam 2.1.1 Type ofiPs in the world and in the region 2.1.2 Indispensable of development scheme IPs & EPZs in Vietnam 2.2 Development situation of IPs & EPZs in HCM city 2.2.1 Historical of developing of IPs & EPZs in HCM city 2.2.2 The situation of activity of enterprise in IPs & EPZs 2.3 The role of credit to development ofiPs & EPZs 10 2.4 The situation of lending activity of bank for enterprise in IPs 11 2.5 Summary of the chapter 15 CHAPTER III: LITERATURE REVIEW 17 3.1 Theory background 17 3.1.1 Concept of Credit 17 3.1.2 Nature and functions of banking credit 17 3.1.3 Corporate Demand on Capital 19 3.1.4 Cost of using Debt 20 3.1.5 Asymmetric Information (AI) 21 3.1.5.1 Lending with Adverse Selection 22 3.1.6 Credit Rationing 23 3.1.7 Credit Rating 24 3.1.8 Credit analysis and Loan decision 25 3.2 Empirical study 32 3.3 The Model 34 CHAPTER IV: METHODOLOGY 38 iv 4.1 The econometric design 38 4.2 The Conceptual design 40 4.3 Data collection method 42 4.4 Sampling method 42 CHAPTER V: DATA PROCESSING AND EMPIRICAL RESULT 45 5.1 Factoring 45 5.1.1 Determine the number offactors 45 5.1.2 Factor Rotation 47 5.1.3 Putting name and interpreting factors 49 5.2 Regression 51 5.2.1 Evaluating level of appropriate of regression model 52 5.2.2 Testing reliability of multiple linear regression model 52 5.2.3 Hypothesis testing 53 5.3 Statistical results 54 5.3.1 Descriptive statistics 54 5.3.2 The reasons explaining enterprise's difficulty in obtaining Loans 56 5.4 Summary this chapter 57 CHAPTER VI: CONCLUSION AND POLICY IMPLICATION 59 6.1 Conclution 59 6.2 Policy implication 60 v LIST OF TABLE Table 2.1 The situation of lending and accumulated loan 11 Table 2.2 Loan accumulated and weigh ofloan in IPs, EPZs 12 Table 2.3 Market share and type ofbanks 13 Table 3.1 :Credit rating 24 Table 3.2 A Framework for finance statement analysis 27 Table 3.3 Types ofRatios 27 Table 3.4 Following explain the meaning ofvariales 36 Table 4.1 Distribution of population .43 Table 5.1 Total Variance Explained 46 Table 5.2 Component Matrix 47 Table 5.3 The map of hypothesis testing 51 Table 5.4 Model Summary 52 Table 5.5 ANOVA(c) , 53 Table 5.6 Coefficients(a) 53 Table 5.7 Coefficients(a) ofTwo models 54 Table 5.8 (a)Type of Enterprise in descriptive statistic 55 Table 5.8 (b) Scale ofbusiness 55 Table 5.8(c) Age ofbusiness 55 Table 5.8 (d) Main business line 56 Table 5.8 (e) Finacial gap (At present, gotten loan or not) 56 Table 5.9 Reasons explaining enterprise's difficulty in obtaining Loans 57 vi ABBREVIATION AI Asymmetric information AS Adverse selection BOD Board of Director CEO Chief Executive Officer CFO Chief Financial Officer CIC Credit Information Center EPZs Export - Processing Zones HCMC Ho Chi Minh City HEPZA the HCMC Export Processing & Industrial Zone management unit IPs Industrial Parks MH Moral hazard SME Small and Medium Enterprise TC Total cost VND Vietnam currency in Dong % Percentage vii CHAPTER 1: INTRODUCTION 1.1 Background In the recent years, the accumulate of Credit's accelerate in the Industrial Parks and Export-Processing Zones in HCMC growth quickly; By the end of December 2005, The Total amount was reached 15,203 billion VN dong, Increase 6.7 times compare with year 2001 Growth rate of Credit simultaneously increasing of number of banks take in part on Credit activities field are 52 units included: 21 commercial banks, 12 joint-stock banks, joint - venture banks, 14 branch of foreign banks, leasing company, joint stock leasing company.(The State Bank of Vietnam, 2005) The increasing of amount of Credit as well as the distribution of banks show that the potential and intendancy of investments gain effectiveness on growth of Enterprises in industry Park and Processing Zone in HCMC, But , In order to approach the banking finance is still problem for the case of Enterprises located in Industry Parks and Export Processing Zones which caused by the conditions to apply for Loan: The Small and Medium-sized enterprises that have just moved and established the business in the Industry Parks usually got the obstacles on ability of finance, moreover, with the typical management followed the family tradition made the business successful is not high Therefore, it is really hard for Bank to valuate finance capacity of companies that want to make long term investment: As the aspect of competition, being the lack of information in Credit market, The Domestic Banks have less advantage than the Foreign Bank in approach and supply capital for Enterprises which attribute the foreign equity capital; Moreover, With tax policy, and favorable tax (reducing tax for the new established business) affected to psychology of intendancy in declare lost carried out in finance statement of Enterprises, Those were distorted the project appraisal concerned with the bank loan; For Enterprises, the property rights of using land or certificate of construction site implemented slowly which impact on collateral, mortgage asset formed from the Loan To solve the issues mentioned above, this study try to make clearly what factors effect to ability of enterprise getting loan from bank in the case of enterprises located in Industrial Parks and Export-processing Zones in HCMC Implementing the policy of Vietnam Gov, and the instructions of HCMC's People Committee in developing IPs & EPZs to mobilization Internal and External resource allocation, contributing for economic growth and social develop of HCM City partially , and general speaking for the Country; At begin of 200 1, 11 IPs & EPZs have been established including : EPZs ( Tan Thuan, Linh Trung1, Ling Trung 2) and IPs ( Binh Chieu, Le Minh Xuan, Tan Binh , Tan Tao, Tan Thoi Hiep, NorthWest Cu Chi, Vinh Loc, Hiep Phuoc) Total Enterprises that given business licenses are 492 , combine 257 Enterprises which have 1,121, millions US Foreign Capital invest and 253 domestic enterprises which have 3,528 billion VND capital invested; Almost of the infrastructure Company have large demand for capital loan, approximately equal 860 billion VND, to complete infrastructure's category of constructions , and facilitates public, and to expand the scale of IP & EPZs to service Enterprise, Simultaneously, the HCMC's policy about moving the firms located in residents areas (Those firms caused pollution in the City itself) enter IP & EPZs , making urgent required capital for Enterprise in equipment the new system machines replacing the old system, upgrading management organization and scale of their business The demands of Loan from Bank are very large , however, many of project meet difficulties in approach to Loan which caused by obligating regulations from Bank; with the history in business , the enterprise themselves can not using their trade mark or prestige for borrowing via Credit mechanisms, It is hardly to apply for procedures sufficiently to borrow or remittance as regulations; some of company are still hesitate to contact with commercial banks ; otherwise, It is hardly to approach other services of bank , because the services of bank in Vietnam have not developed efficiency and popularly; With theory related the asymmetric information, Bank itself prudentially consider about risks management, to reducing risk, bank offer many conditions on contractual loan Intuition, there are many variables affect to ability of Enterprises borrowing capital from bank, such as collateral, internal funds, firm size, contractual clauses, and credit relationship between firms and banks etc , so, this paper is intend to BIDV- HCM Branch Study (2005)," Banking Activities service Firm in IP & EPZs"; the study noticed that bank and company work together to overcome the difficulties in procedures of loan ; establishing the credit relationship often get question because of the reasons comprised : (l)the value of firm's asset is not sufficiency for loan requirement; (2)the finance statement is not relevant organized that make constraint on revaluation of firms' finance situation, (3) It is hardly in making projects which have characteristic of feasibility or successfully Paul Cook and Ferderich Nixson (2000); "Finance and Small and Medium-sized Enterprise development"; mentioned about Small Firms in the UK: (1) Small firms have a high reliance on short term financing through the bank sector; (2) small firms weakens relations with financial institutions, (3)fix assets are relatively unimportant in the balance sheets of smaller firms, (4) Small firms have higher transactions costs than the large, (5) The smaller have greater information imperfections than the \ \ larger ; The empirical based study on financial structure between small and ge firms, small firms more self-financing nrm-bank relationships not only entail specific benefits and costs for both the engaged firms and banks s, but also directly affect the structure of banking markets In particular, the sunk costs of screening and monitoring activities and the 'information capital' collected by the incumbent banks may act as a barrier to entry The intensity of the existing firm-bank relationships will determine the height of this barrier and shape the structure of international banking market", Hans Degryse and Steven Ongena (200 1) said; 3.3 The Model: Model is built with foundation of situation and condition of Vietnam Specficly, base on reality of banking acivity and enterprises operating in Industrial Parks and Export-processing Zones in Hochiminh City in which there are existed the phenomenon : Many enterprises tend to be financed by banks' loan, and the rest dislike using banks' loan, they can seek for finance with other canals; 34 For enterprises wishing borrow money from bank, Some of them can get loan since they meet sufficiency condition offered while some can not since having no sufficient collateral, or the projects apply for loan are not practically or their business remain so many potential risks as considering of bank; For Enterprises have no wish to borrow, event though they have ability to get banks' loan, they not like using banks' loan because of the red- tape and complicated loan procedures, or time of disbursement money , moreover, enterprises can able to be financed by other resources such as issuing bond, mobilization from relative, and foreign capital In the other hand, bank is ensuring their money will be used efficiency and preventing risks, every bank has its own customer policy bas on credit operating standard process for creening credit, apraisal project, loan dicision Thus, bank take attention on enterprises' finance capacity, rating credit, to offer the approriate policy for reducing risk and guarantee the efficiency of credit Base on theory and empirical study concerned, the model is suggested by using 5C characters analysis and finacial analysis: Let put P stand for ability getting banks' loan, Pis expressed by the function of P = F(Character,Capacity, Capital, Collateral, Condition); By using factor analysis, the equation is setting up as follow: (3.25) Where: P measure ability getting banks' loan; C is Character-The customer's willingness to meet credit obligations; C Capacity- The customer's ability to meet credit obligations out of operating cash flows; C3 is Capital- The customer's finance reserves; C is Collateral: A pledged asset in case of default; C5 present Conditions: General economic conditions In which each C is measured with Specific model: Ct = f3o + f3tC11+ f32C12+ f33C13+ f34C14+ f3sCts+ f36Ct6+ f37C11+ f3sCts+ f39C19 + f3toCllo+ f3uC111 + Et (3.26) 35 C2 = Bo + BtC2t+ B2C22+ B3C23+ B4C24+ BsC2s + e2 (3.27) c3 =Yo+ YtC3t+ Y2C32+ y3C33+ Y4C34 + EJ (3.28) C4 = the increasing or higher probability getting Loan? 8P/8C4 > 0; Hypothesis 5: The good general economic conditions, the conditions of loan contract will loosen, the higher probability to get loan commitment; 8P/8Cs> 39 Model (3) Put more independent variables to the Model (2) such as: Type of Enterprises, Age of business, Scale of business, and Main business in line into Model (2); the Model now become: P = ao + atCharater + a2Capacity + a3Capital + a4Collateral4 + asCondition + a6Type + a,Age + asScale + a9Main + 1) (4.4) Besides the main hypothesis testing mentioned in the Model (2); we can test if other variables able to make effecting on the ability of Enterprises for receiving Loan Example: If enterprises that have long time doing their business, they will have experience of making or bargaining advantage in signing the Loan contract (It is also saving cost for Firm)?, or The larger size of Firm-> firm has more asset for collateral -> more loan will get -> Higher probability? 4.2 The Conceptual design: Dependent variable: * Ability getting hanks' Loan: this variable is measured base on criterions of credit analysis (Bank's point of view), and, statement and awareness of Enterprises themselves assessment on their capacity or ability when wishing borrow (Enterprises point of view) Independent variables: * Character: This is noticed that the qualification, understanding, prestige and moral of borrower, for any bank that want to stabilize and develop need to select target borrower who have high prestigious which presented though their characteristics on many aspects * Capacity: the variable measure the capacity or power (borrow and repayment Loan) of borrower The capacity of borrow and repayment Loan is one of important criterion for releasing credit to clients Enterprises wishing borrow which have demand for money to operate business (producing, trading, building, or buying etc ) have to demonstrate their capacity on two sides: Applying for Loan and repayment, simultaneously, creating more resource in advance to satisfy the banks' terms 40 * Capital: Capital is an important element of Enterprises If enterprises have large capital serving for business operation and then capital will become one factor to occupy banks' confident on purpose of using Loan There is not any Company that doing business relies completely on Loan and there is not any bank that release credit at 100% percentage of company's money demand Capital of Enterprises combine and coordinate closely with Loan by appropriately rate, these will make more efficient result * Collateral: Asset pledge in case of default If Loan was guaranteed by mortgage or pledge asset, it will cement responsibility and obligation of borrower In case of insolvent , collateral tum to be second receivable of banks, however, mortgage or security asset has accommodate to realistic conditions * Condition: when banks offer Loan for Enterprises, they always include conditional terms; they are conditions of legal procedures, economic, finance which mentioned on regulations of government ensuring the credit activity accordance with Law They are also specific conditions using to solve problems concerned to credit such as terms, deadline, or interest rate act they are called general economic conditions * Type of business: This is an ambiguous variable that use to test which type of business have more advantage or capacity to another in getting bank's Loan * Age of business: Measuring by number of years doing business, it is considered that if enterprises have long time doing business, calculated by year establishing, they will have more experiences and advantage in bargaining for signing Loan contract * Scale of business: or Size of enterprise accordance with Enterprise Law of Vietnam Government that base on the criterion about equity capital and labor forces: - Large-sized Enterprise is Enterprise that has equity capital 2: 10 billions Vietnam dong or number of labor 2: 300 people; - Medium-sized Enterprises that has equity capital 2: billions Vietnam dong or number of labor 2: 200 people; - Small-sized Enterprises that has equity capital < billions Vietnam dong or number of labor < 200 people; 41 * Main business in line: This variable try to indicate what profession business are main point and potential which the economy concentrate to develop or give more investment incentive Because of Collateral is prerequisite condition when apply for loan, moreover, so many empirical studies determined that collateral is important factor, which is mainly factor effect to ability getting banks' loan Thus, this study itself does not emphasis on collateral, but emphasis on Character and Capacity of borrower and consider that they are main factors need to test main hypothesis The questionnaire was designed concentrate on the two group variables and tries exploring what unique factors forming the common factors mentioned 4.3 Data collection method: This section explains the resource of data and the gathering method used in this thesis, the primary data is only used in this thesis to test main objectives The primary data is collected by interviews using questionnaire that includes two main parts (See more in appendix I) as following: The first part is general information about type of enterprise, years of establishing, scale of enterprise, main professional of business, credit situation, the biggest of loan amount that enterprise have gotten in past three years, and the reasons that make difficult to approaching banks' loan The second part is level agreement of enterprise on statements , the ladder scale of degree of agreement is from to 5, the point is incompletely agree and point is completely agree; and this part includes 35 statements that will be used as explanations variables, and one conclusion question that will be used as independent variable These questions concentrate on financial performances, business environments, characteristic of enterprise, and the point of view about loan 4.4 Sampling method: Hochiminh city has 11 Industrial parks( BinhChieu, CatLai2, HiepPhuoc, LeMinh Xuan, PhongPhu, TanBinh, TanPhuTrung, TanTao, TanThoiHiep, Tay Bac CuChi, VinhLoc) and export-processing zones (LinhTrung 1, LinhTrung2, TanThuan) 42 Table 4.1 Distribution ofpopulation Name ofiPs And Total area in square Total Investors EPZs hecta 27.34 21 Binh ChH!u 111.7 cat Lai 33 332 63 Hi~p Phu&c Le Mimh Xuan 100 164 163.3 NA Phong Phu Tan Binh 125.7 132 Tan Phu Trung 552 NA 442 27 Tan Th&i Hi~p 215.4 194 Tan T~o Tay Bac cu Chi 220 42 10 108 11 Vinh L{)c 200 12 KCX Linh Trung 62 30 KCX Linh Trung2 61.7 38 13 106 14 300 KCX Tan Thu~n 958 Total of Investors (Source: HEPZA-HCMC Export Processing & Industrial Zones Adminisrative Unit) Odd The sample is collected randomly from finite population of enterprises(958 investors), with helping of HCMC Export Processing & Industrial Zones Administrative Unit and Planning & Investment Dept , the author has the list of name and address of 958 enterprises operating in IPs and EPZs by Excel spreadsheet; The samples are chosen by the Rand function in Excel software Calculating for Sample size: With the finite population by 958 enterprises, the trial survey was carried out with 20 questionnaire copies which was release by the team of main pilot survey; By recommendation of HEPZA; the result received very well signal; 19 enterprises said that they have gotten loan , and, just only one enterprise have, Percentage of obtaining Loan is 95%; Then, we calculate how small sample size is need by formula: SS = Z * (P) * (1- P) c2 (4.5) Z= Value of 1.96 with the confident level 95%; P= 0.97; and C=0.04(confident interval) 43 The confidence interval is the plus-or-minus figure usually reported in newspaper or television opinion poll results For example, if you use a confidence interval of and 47% percent ofyour sample picks an answer you can be "sure" that if you had asked the question of the entire relevant population between 43% (47-4) and 51% (47+4) would have picked that answer The confidence level tells you how sure you can be It is expressed as a percentage and represents how often the true percentage of the population who would pick an answer lies within the confidence interval The 95% confidence level means you can be 95% certain; the 99% confidence level means you can be 99% certain Most researchers use the 95% confidence level SS = 114; Now correction for the finite population: NSS = ss SS _ ; where pop= 958; NSS = 102; 1+-Pop Sample size need at least equal 102 observations; The larger sample, the more sure you can be that their answers truly reflect the population This indicates that for a given confidence level, the larger your sample size, the smaller your confidence interval However, the relationship is not linear (i.e., doubling the sample size does not halve the confidence interval) 44 CHAPTER V: DATA PROCESSING AND EMPIRICAL RESULT This Chapter will present step by step the way of implementation analyzing and processing the data collected, the study will employ descriptive statistics and econometric model to examine the relationship between the dependent variable and independent variables It is emphasized that trying figure out factors effecting to ability receiving Loan of Enterprises operating in Industrial Parks and Exportprocessing Zones 5.1 Factoring: Data of the thesis include 104 observations collected and used for factor analysis that using the SPSS software; 5.1.1 Determine the number of factors: Determination base on eigen-value method: It is only known that factors have eigenvalue larger than will be keep in the model, but factors with eigen-value lower which are not useful for summary information better than an original variable, because after standardize , each original variable has the variance equal 45 Table 5.1 Total Variance Explained Component 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Initial Eiaenvalues %of Cumulati ve% Variance Total 33.437 33.437 12.037 8.376 41.813 3.015 48.170 2.289 6.357 6.074 54.244 2.187 59.202 4.958 1.785 4.808 64.010 1.731 67.505 1.258 3.495 3.192 70.696 1.149 73.372 963 2.676 2.310 75.682 832 77.926 2.244 808 80.067 2.141 771 81.915 1.849 666 83.715 1.799 648 85.321 1.607 578 1.522 86.844 548 1.342 88.186 483 1.232 89.418 443 90.614 1.196 431 1.012 91.627 364 977 92.604 352 93.483 316 879 841 94.324 303 95.081 758 273 707 95.788 255 96.443 655 236 564 97.007 203 97.5.34 527 190 97.988 455 164 98.419 431 155 407 98.826 146 311 99.136 112 298 99.434 107 8.712E 242 99.676 -02 7.184E 200 99.876 -02 4.465E 100.000 124 -02 Extraction Sums of Squared Loadings %of Cumulati Variance ve% Total 33.437 33.437 12.037 41.813 8.376 3.015 48.170 6.357 2.289 54.244 6.074 2.187 59.202 4.958 1.785 64.010 4.808 1.731 67.505 3.495 1.258 70.696 3.192 1.149 Rotation Sums of Squared Loadings %of Cumulati ve% Total Variance 20.867 7.512 20.867 31.558 10.691 3.849 39.569 2.884 8.011 46.973 7.404 2.665 2.309 6.413 53.386 59.733 6.347 2.285 65.397 2.039 5.664 70.696 5.299 1.908 Extraction Method: Principal Component Analysis Tải FULL (97 trang): https://bit.ly/3jZEhe4 Dự phòng: fb.com/TaiHo123doc.net In the table , according to Eigen-value criterion larger than 1, then, there are eight components extracted Come from the understanding, we are also noticed that the ability getting banks' Loan for groups of reasons Thus amount of common factors are suitable At the colum of Cumulative %, It is showed the first factors explaining 71% of varian of total variable; 46 5.1.2 Factor Rotation One of important element of the factor analysis table is component matrix The component matrix comprise of coefficient performing standardize variable, These factor loading expressed the correlation among factors and variables, the higher factor loading showed factors and variables having closely coefficient is used to explain factors correlation, this Tải FULL (97 trang): https://bit.ly/3jZEhe4 Dự phòng: fb.com/TaiHo123doc.net Table 5.2 Component Matrix Rotated Component Matrix Component the bank transacion offices are convenient 0.4670 0.2065 0.1408 Ability to meet debt obligation of enterprise is high 0.6847 0.1789 0.1465 - - 0.0137 0.0611 0.3286 0.2388 0.0772 0.2712 0.1595 0.3061 0.1656 0.0544 - - The effectiveness of using fix asset is high 0.6577 0.2369 0.0712 0.0207 0.3599 0.2261 0.0598 0.2573 Demand for bamks loan at Qresent is high 0.2670 0.2463 0.6576 0.0505 0.2089 0.1584 0.0801 0.2053 0.7309 0.3235 0.0114 0.0405 0.1205 0.1456 0.1013 0.2609 0.0249 The owner of company have experieces and high professional knowledge The CEO have good qualification The board of director have good relationship with stakeholder institutions and officers Director board are very keen to business environment changing Enterprise has good operation process and good entenal edition Sympathize, relation between BOD and staff are good Business strategy of enterprise is suitable for the next period Enterprise has good background credit relationship with bank considering by time and awarenness Capacity of providing information for applying loan on time Total Debt I Total asset ratio is low Total long term debt I Total capitalization ratio is low - - - 0.8549 0.2143 0.1630 0.0202 0.0384 0.0066 0.0952 0.6678 0.0491 0.3140 0.1574 0.0933 0.0850 0.1401 0.8078 0.1249 0.3210 0.0976 0.0279 0.0021 0.0311 0.7045 0.1473 0.2648 0.1131 0.0652 0.1246 0.2110 0.0280 0.8251 0.2036 0.0121 0.1570 0.0683 0.0032 0.0498 0.0339 0.7259 0.1375 0.3326 0.1750 0.0488 0.1927 0.0329 0.2766 0.6739 0.0710 0.0362 0.2760 0.0138 0.0632 0.2286 0.3610 0.5943 0.0317 0.2529 0.2314 0.0807 0.0577 0.3902 0.2868 0.0271 0.0904 0.0574 0.0133 0.0319 0.1422 0.8313 0.0980 0.0180 0.0434 0.0521 0.0614 0.0895 0.8745 0.1331 - - - - - 0.2345 0.1173 - - - - - - - 0.0421 47 Gross Profit I Net sales ratio is high Earning from operating I Net sales ratio is high Earning after tax I average share holder equity ratio is high Earning after tax I average toatl asset ratio is high EBITiinterest cost ratio is high 0.1751 0.8387 0.0683 0.1546 0.0392 - 0.1327 0.0822 0.0105 0.1418 0.8496 0.1604 0.1563 0.0033 0.0548 0.0796 0.0606 0.1982 0.7878 0.1048 0.0281 0.1075 0.0703 0.0212 0.0933 0.1789 0.6866 0.0936 0.0918 0.1279 0.0125 0.1267 0.3191 0.2718 0.6699 0.0964 0.1177 0.1354 0.0686 0.1186 0.2884 the situation of bad loan performmance comparing with loan accumulate is low Enterprise usually uses banking services 0.2433 0.1006 0.0882 0.1760 0.0045 0.0596 0.0470 0.7880 0.1770 0.1666 0.7025 0.1117 0.1717 0.2198 0.1778 0.0278 Enterprise is planning extending credit relationship with bank in next time The prospection of business industrial is good 0.3798 0.0755 0.5262 0.2549 0.1714 0.3318 0.1913 0.3334 0.5397 0.0792 0.3968 0.3746 0.0494 0.0375 0.0486 0.3470 0.2800 0.0539 0.0918 0.6907 0.0964 0.1052 0.0349 - - - - 0.1590 0.0060 0.0343 Capacity taking part in new market is very good Capacity for threatening by " subtitute products" is very low Business operating less dei>_end on natural conditions Stability of material input is high Government offer industrial protection, subsidy, favourable to export for yours com~any_ Trade mark and products of Enterprise are prestigous for comsumers Level of asset insurance of enterprise is high Changing in workforce gets less effecting to operation process Capacity of getting other capital finance resource is high - - - - - - - - - - 0.0802 0.2210 0.1808 0.4619 0.4554 0.1590 0.0049 0.1987 0.0834 0.7744 0.0350 0.1450 0.0119 0.1016 0.2483 0.1534 0.1675 0.6788 0.2357 0.0390 0.0419 0.0608 0.1331 0.1485 0.2727 0.0864 0.7086 0.0573 0.0936 0.2936 - - 0.4741 0.0929 0.6077 0.2463 0.2686 0.0511 0.1395 0.0471 0.1111 0.2497 0.3614 0.2329 0.4833 0.1473 0.1908 0.1990 0.0571 0.0062 0.0456 0.7930 0.0236 0.0173 - - 0.3539 0.2013 0.0695 0.0822 0.5114 0.4914 0.0903 0.0265 - - 0.2547 0.1074 0.1418 0.5516 0.0090 0.0374 0.1573 0.1191 0.1349 0.7856 0.0296 0.0084 0.3586 0.3507 0.6682 0.0520 0.1320 - - - When enterprise want to borrow from banks, the ability getting loan is high Time waiting for loan accepted is quickly 0.2760 0.3724 0.1909 0.0197 The procedure apply for loan are complicated and wordy 0.0469 0.0057 - - - - - - - - - 0.2656 0.2895 - - 0.0642 - - Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization 48 6671583 ... 2.2: Loan accumulated and weigh of loan in IPs, EPZs over total mount of loan in HCMC (by billion VN dong) Year Total loan in IPs, EPZs Weigh of loan in IPs, Total loan in HCMC EPZs over total loan. .. region 2.1.2 Indispensable of development scheme IPs & EPZs in Vietnam 2.2 Development situation of IPs & EPZs in HCM city 2.2.1 Historical of developing of IPs & EPZs in HCM city ... capitals investment for the development of enterprises in IPs & EPZs area in HCMC 1.4 Methodology The main purpose of this study is to identify what are determinants of ability of Enterprises in IP &