Some solutions for the development of consumer lending at techcombank hoang quoc viet

Luu Khanh Van CQ503814 Business English 50B NATIONAL ECONOMICS UNIVERSITY FACULTY OF FOREIGN LANGUAGES ENGLISH FOR BUSINESS DEPARTMENT *** LƯU THỊ KHÁNH VÂN Topic SOME SOLUTIONS FOR THE DEVELOPMENT OF[.]

NATIONAL ECONOMICS UNIVERSITY FACULTY OF FOREIGN LANGUAGES ENGLISH FOR BUSINESS DEPARTMENT *** - LƯU THỊ KHÁNH VÂN Topic: SOME SOLUTIONS FOR THE DEVELOPMENT OF CONSUMER LENDING AT TECHCOMBANK HOANG QUOC VIET Hanoi- May, 2012 Luu Thi Khanh Van - CQ503814 - Business English 50B NATIONAL ECONOMICS UNIVERSITY FACULTY OF FOREIGN LANGUAGES ENGLISH FOR BUSINESS DEPARTMENT *** - LƯU THỊ KHÁNH VÂN SOME SOLUTIONS FOR THE DEVELOPMENT OF CONSUMER LENDING AT TECHCOMBANK HOANG QUOC VIET Supervisor: Nguyễn Thị Phong Lan Hanoi – May, 2012 Luu Thi Khanh Van - CQ503814 - Business English 50B i ACKNOWLEDGEMENT To finish this report, I am deeply grateful to all those who have shared ideas, valuable comments and encouragement during my writing of this paper First of all, I would like to express the deep sense of gratitude to my supervisor, Ms Nguyen Thi Phong Lan for her useful guidance, critical comments and valuable suggestions on this report Without her help, this report could not have been completed Besides, my sincere thanks also give to the Faculty of Business English, National Economics University for the devoted teaching of all the lecturers and for giving me the knowledge and studying methods.Their teaching not only helps me gain valuable knowledge and skills during four years but also lays the foundation for my future work Next, I would like to express my special thanks to the staff at the Techcombank Hoang Quoc Viet Branch for their big support so that I could finish my internship there and finish the paper successfully Last but not least, I wishes to extend my thanks to my family and friends for their support, contribution and encouragement in the making of this report However, owing to my lack of experience and knowledge as well as the limited scope of the research, some shortcomings and mistakes are unavoidable Please kindly take into account Luu Thi Khanh Van - CQ503814 - Business English 50B ii TABLE OF CONTENTS ACKNOWLEDGEMENT i LIST OF CHARTS iv LISTS OF ABBREVIATIONS v EXECUTIVE SUMMARY .vi INTRODUCTION Introduction of the research topic and rationale Research questions Scope of the research Methodology CHAPTER – INTRODUCTION 1.1 Introduction of Techcombank Hoang Quoc Viet Branch: .1 1.1.1 Establishment 1.1.2 Organizational Structure .2 1.1.3 Functions and missions .2 1.2.Consumer loans activity in Hoang Quoc Viet Branch 1.2.1 Orientations for consumer loans period 2009- 2012 1.2.2 Overview of the current consumer loans activity and its shortcomings .4 CHAPTER 2: THEORETICAL FRAMEWORK 2.1 Definition of lending 2.2 Features of lending 2.3 The history emergence of consumer loans .7 2.4 Overview of consumer loans in Vietnam Luu Thi Khanh Van - CQ503814 - Business English 50B iii 2.5 Definitions of consumer loans 2.5.1 The concept of consumer loans 2.5.2 Characteristics of consumer loans 10 2.5.3 Classification of consumer loans 12 2.6 The role of consumer loans 14 2.7 Benefit of consumer loans 16 2.8 Factors affecting the activity of consumer loans 17 2.8.1 Customers 17 2.8.2 The branch 18 2.8.3 Socio- economics factors 19 CHAPTER – ANALYSIS AND FINDINGS 20 3.1 Overview of business operations at Techcombank Hoang Quoc Viet (THQV) in the period 2009-2011 20 3.2 Current situation of consumer loans operation at THQV 20 3.2.1 Regulations of making consumer loans 21 3.2.2.Procedures of making consumer loans .22 3.3 Overall assessment on the rating structure for consumer loans 23 3.3.1 The deliquency rate of consumer loans 23 3.3.2 Profits on credit loans .24 3.4 Achievements 26 3.5 Weaknesses and reasons 28 3.5.1 Weaknesses 29 3.5.2 Reasons 29 CHAPTER - RECOMMENDATIONS 30 4.1 Some recommendations for the development of consumer lending at THQV 30 Luu Thi Khanh Van - CQ503814 - Business English 50B iv 4.1.1Perfecting the policy of information, research and investigation on factors related to consumer loans 31 4.1.2 Developing a proper and attractive strategies for consumer loans to customers 32 4.1.3 Developing marketing strategies .33 4.1.4 Keeping developing continuouly banking technology 34 4.1.5 Improving the quantity as well as the quality of the human resources 34 4.2 Submitting proposals to the upper management system 34 CONCLUSION 34 APPENDIX .35 REFERENCE 36 LIST OF CHARTS Chart Title Chart Organizational Structure Page LIST OF TABLES Table Title Table The procedures of making credit loans in Techcombank Page 16 Luu Thi Khanh Van - CQ503814 - Business English 50B v Hoang Quoc Viet The rating structure for consumer loans at the Techcombank Table Hoang Quoc Viet 17 Table Indices of consumer loans 19 Table Profits on credit loans 21       LISTS OF ABBREVIATIONS THQV: Techcombank Hoang Quoc Viet Vietinbank:Vietnam Joint Stock Commercial Bank for Industry and Trade Vietcombank: Vietnam Joint Stock Commercial Bank for foreign trade of Vietnam Agribank: VietnamBank for Agriculture and Rural Development BIDV: Bank for Investment and Development ACB: Asia Commercial Bank MB: The Military Commercial Joint- Stock Bank Luu Thi Khanh Van - CQ503814 - Business English 50B vi  TienPhong Bank: Tien Phong Commercial Joint- Stock Bank  SHB: Saigon – Hanoi Commercial Joint Stock Bank EXECUTIVE SUMMARY Consumer lending plays an important role in the development of commercial banks In Vietnam, personal credit activities are increasingly expanding, attracting many banks, individuals and households In the near future, these activities will certainly grow more, not only banks but also other financial institutions During my internship in Techcombank Hoang Quoc Viet at the department of Credit, I have gained some understanding of consumer loan operations and marketing activities Thus, based on primary theories and practical experiences on the branch on this field, I have decided to choose the following topic for my internship report: “Some solutions for the development of consumer lending at Techcombank Hoang Quoc Viet ” Luu Thi Khanh Van - CQ503814 - Business English 50B vii The purpose of this report is to analyze the current situation of consumer lending activity at THQV in connection with the impact of economic environment The result gained from the analysis is used to assess the efficiency of THQV’s consumer loans and find out the strength, the weakness as well as the reason for its shortcomings Then, based on the limitations, this report puts forward some suggestions for the development of consumer lending Apart from the introduction and conclusion, my final report is divided into four chapters Chapter 1: Introduction In this first chapter, I gave a brief overview of the THQV’s establishment, organizational structure as well as its functions and missions Besides, I introduce some general information about the consumer lending with regards to orientations of THQV and its current status Chapter 2: Theoretical framework This chapter will provide readers with the knowledge of credit, consumer lending and an essential background related to consumer loans at THQV Chapter 3: Analysis and Findings This main chapter will analyze the figure and the assessment of the current situation Some limitations and shortcomings of the entity will also be drawn out Chapter 4: Recommendations This final chapter is supposed to give some solutions to improve and promote the consumer lending business at THQV Luu Thi Khanh Van - CQ503814 - Business English 50B INTRODUCTION Introduction of the research topic and rationale Nowadays, banking is one of the most important financial channel for the economy Improving and expanding banking activities are the orientation and guideline for banks to survive and grow in the increasingly fierce competition Among that, credit activity is a vital field in the bank and decides most of other activities in the national economy It is also a main source of creating profitability and decides the existence and development of the bank For a long time, most banks only focused on lending the production business but not much paid attention to the final stage of producing – consuming Actually, when society increasingly grows, not only the enterprises need capital to make business and expand the current market but the individual need more capital than ever before as well People’s living standards are more and more improving, not only in need of basic necessities like food, clothes but also tons of needs both in mental and physical life People’s psychology has changed now, which considered borrowing as the need to use the goods before liquidity To meet that need, banks have developed a new credit mode: consumer loans It contributes to raise bank’s revenue It means consumer loans help individual obtain capital to improve their lives After studying the activities of Techcombank Hoang Quoc Viet for a period of time, I found out that the bank was concerned about the consumer loans However, it has not been actually the major activity of the bank Therefore, continuing research and offering solutions would bring enormous significance for both theoretical and practical aspects for the diversification of the bank’s activities For this reason, the issue “Some solutions for the development of consumer lending at Techcombank Hoang Quoc Viet ” has been chosen for my internship report Research questions The report is mainly a descriptive analysis of available data to find out the answers to the following questions: What is consumer loans and its related features? What is the current situation of consumer loans at Techcombank Hoang Quoc Viet? And what are the reasons for existing limitations?