Factors impacting loan repayments of individual customers

NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL DANG THANH VIET FACTORS IMPACTING LOAN REPAYMENTS OF INDIVIDUAL CUSTOMERS AT VPBANK LE DUC THO BRANCH MASTER OF BUSINESS ADMINISTRATION RESEARCH PROPO[.]

NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL - DANG THANH VIET FACTORS IMPACTING LOAN REPAYMENTS OF INDIVIDUAL CUSTOMERS AT VPBANK - LE DUC THO BRANCH MASTER OF BUSINESS ADMINISTRATION RESEARCH PROPOSAL Supervisor : Ph.D Vu Dinh Hien HANOI – 2018 ACKNOWLEDGEMENT TABLE OF CONTENTS ACKNOWLEDGEMENT .2 TABLE OF CONTENTS ABBREVIATION .6 LIST OF TABLE EXECUTIVE SUMMARY CHAPTER 1: INTRODUCTION 1.1 Rationale 1.2 Research Objective 1.3 Research Questions 1.4 Research Methodology 1.5 Research Scope 1.6 Thesis structure CHAPTER 2: THEORETICAL FRAMEWORK OF INDIVIDUAL CUSTOMERS LOAN AND FACTORS IMPACTING LOAN REPAYMENT OF INDIVIDUAL CUSTOMERS 2.1 Theoretical framework on Individual customers loan 2.1.1 Concept and characteristics of individual customers loan 2.1.2 Risk of credit from individual customers loan 2.2 Loan repayment of individual customers 2.3 Factors impacting Loan repayment of individual customers 11 2.3.1 Demographic characteristics 11 2.3.2 Professional characteristics 12 2.3.3 Education characteristics 12 2.3.4 Income characteristics 13 2.3.5 Loan characteristics 13 2.3.6 Moral hazard of borrowers .14 2.3.7 Operational risk from banks .14 2.3.8 Some unusual spending behavior .14 CHAPTER 3: RESEARCH METHODOLOGY 16 3.1 Phương pháp nghiên cứu 16 3.2 Mô tả liệu 17 3.2.1 Các biến số phụ thuộc 17 3.2.2 Các biến số độc lập 17 3.3 Mơ hình nghiên cứu đề xuất 18 CHAPTER 4: CURRENT SITUATION OF FACTORS IMPACTING LOAN REPAYMENT OF INDIVIDUAL CUSTOMERS AT VPBANK LE DUC THO BRANCH AND RESEARCH RESULT .19 4.1 Tổng quan Ngân hàng Việt Nam Thịnh vượng VPbank - chi nhánh Lê Đức Thọ 19 4.1.1 Lịch sử hình thành phát triển VPBank chi nhánh Lê Đức Thọ 19 4.1.2 Cơ cấu máy tổ chức .19 4.1.3 Lĩnh vực hoạt động 21 4.2 Tình hình kết kinh doanh VPBank - chi nhánh Lê Đức Thọ giai đoạn 2015 - 2017 22 4.3 Thực trạng nhân tố ảnh hưởng tới khả trả nợ khách hàng cá nhân VPBank - Chi nhánh Lê Đức Thọ 23 4.3.1 Số người phụ thuộc 24 4.3.2 Độ tuổi 25 4.3.3 Trình độ học vấn .26 4.3.4 Quy mô khoản vay 27 4.3.5 Thu nhập 28 4.3.6 Lãi suất .28 3.2 Kết nghiên cứu 30 3.2.1 Kết hồi quy Binary Logistic 30 3.2.2 Độ phù hợp tổng qt mơ hình 30 3.2.3 Mức độ giải thích mơ hình 31 3.2.4 Tính xác dự báo mơ hình 31 3.3 Kết phân tích biến mơ hình 32 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS .37 5.1 Conclusions 37 5.2 Oriented development .39 5.2.1 General orientation for individual customers loan at VPBank up to 2025 39 5.2.2 Specific orientation for individual customers loan at VPBank - Le Duc Tho branch up to 2025 40 5.3 Recommendations 40 5.4 Limitations of the study 42 5.5 Further research directions .43 CONCLUSION .44 REFERENCES .45 APPENDIX 46 ABBREVIATION LIST OF TABLE Hình 1.1 Sơ đồ cấu máy tổ chức VPBank Lê Đức Thọ năm 2018 Bảng 2.1: Mô tả biến độc lập chọn kỳ vọng tương quan với biến phụ thuộc 17 Bảng 2.2 Một số tiêu kết kinh doanh VPBank chi nhánh Lê Đức Thọ giai đoạn 2015-2017 22 Bảng 4.6: Tỷ lệ trả nợ hạn khách hàng cá nhân 24 Bảng 4.1 Phân loại khách hàng cá nhân phạm vi nghiên cứu số người phụ thuộc 24 Bảng 4.2: Phân loại khách hàng cá nhân phạm vi nghiên cứu độ tuổi.25 Bảng 3.3: Phân loại khách hàng cá nhân phạm vi nghiên cứu trình độ học vấn 26 Bảng 3.4: Phân loại khách hàng cá nhân phạm vi nghiên cứu quy mô khoản vay 27 Bảng 3.5: Phân loại khách hàng cá nhân phạm vi nghiên cứu thu nhập 28 Bảng 3.6: Phân loại khách hàng cá nhân phạm vi nghiên cứu lãi suất theo số mục đích vay 28 Bảng 3.1: Tóm tắt kết hồi quy Binary Logistic mơ hình nghiên cứu 30 Bảng 3.2: Kiểm định mức độ phù hợp tổng qt mơ hình 30 Bảng 3.3: Kiểm định mức độ giải thích mơ hình .31 Bảng 3.4: Kiểm định tính xác dự báo mơ hình .31 EXECUTIVE SUMMARY CHAPTER 1: INTRODUCTION 1.1 Rationale With the characteristics of a developing country which has population of more than 96 million (2018), the medium income is increasing rapidly and the demand for finance and payment services is increasing exponentially, financial experts predict that the retail banking market in Vietnam will focus on developing with the group of customers as individuals, households and small and medium enterprises next year It opens a great opportunity for commercial banks to help consumers increase their asset value and manage their business well, as well as carry out daily payment operations In addition, this is a group of customers that provides stable revenue, low risk and ability to bring longterm development to banks in the context of the economy that still faces many difficulties, credit fell sharply, causing much damage recently Therefore, the development of retail banking will be the trend of development in Vietnam It is the fact that, not only have commercial banks stepped up their retail banking operations, but also state-owned banks have been shifting their focus on this potential market Talking about exploiting the retail market, can’t help but mention personal credits Personal credit is one of the essential products that set up the credit system of commercial bank In Vietnam, in the past few years, in the context of very difficult economic situation, the absorption capacity of enterprises has become very low, which has led to the lending activities of corporate customers of banks slow down That makes banks begin promote their personal lending activities in order to save excess capital and improve operational efficiency The personal credit sector has a lot of potential and helps banks have stable long-term revenue but this activity contains many risks that banks are more concerned about it, Especially among them is the risk of default, in two respects is the amount of principal and repayment period It would be very dangerous if the bank continued to add to its bad debt portfolio from its personal credit risk when the bad debt from its corporate clients was still unable to handle it Therefore, the understanding of the factors affecting the repayment capacity (in terms of both the repayment size and the repayment period) will help commercial banks identify factors that make risk credit These are the main factors that help the author choose to study the topic “Factors impacting ability to pay the loans of individual customers at Commercial Banks” This topic will reseach the factors that affect the repayment ability of individual customers at VPBank through the OLS regression model in terms of loan size and Probit model in terms of repayment term, thereby recommending solutions to help the bank manage risks in the personal credit field better 1.2 Research Objective General objective - Analyzing the factors affecting the repayment capability of individual customers at VPBank to provide management suggestions and recommendations for managing personal credit risk Specific objectives - Identify the factors that affect the repayment ability of individual customers at VPBank; - Quantify the impact of these factors on the ability of the individual customers to repay loans at the branch; - Giving advice and recommendations to better manage the risk of personal credit at VPBank 1.3 Research Questions - Rate of repayment for loans granted to individual customers at VP Bank in recent years movements like? ... individual customers loan 2.1.2 Risk of credit from individual customers loan 2.2 Loan repayment of individual customers 2.3 Factors impacting Loan repayment of individual customers. .. of individual customers loan and factors impacting loan repayment of individual customers Chapter 3: Research methodology Chapter 4: Current situation of factors impacting loan repayment of individual. .. OF INDIVIDUAL CUSTOMERS LOAN AND FACTORS IMPACTING LOAN REPAYMENT OF INDIVIDUAL CUSTOMERS 2.1 Theoretical framework on Individual customers loan 2.1.1 Concept and characteristics of individual