THÔNG TIN TÀI LIỆU
i UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS ng • ep hi VIETNAM- NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS w n lo ad ju y th yi BANK CREDIT APPRAISAL CRITERIA pl n ua al FOR BORROWING FIRMS IN VIETNAM n va ll fu A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS oi m t at nh z z LE DiNH THUY NGAN jm ht vb By k m co l Asso.Prof.TRUONG QUANG THONG gm Academic Supervisor: an Lu n va y te - -~ re HO CHI MINH CITY, DECEMBER 2010 ng CERTIFICATION i ep hi I hereby certify that the substance of this thesis has not been submitted for any • w n degrees and is not being currently submitted for any other degrees lo ad y th I also certify that, to the best of my knowledge, and any help received in ju preparing the thesis and all sources used have been acknowledged in the thesis an lu la p yi Signature n va m ll fu z at nh oi ' LeDinh Thuy Ngan Date: December, 2010 z tj h vb k m m co l gm an Lu n va te re • · ~ _- h ng ACKNOWLEDGEMENT ie p • This research 1s impossibly completed without the valuable guidance, w n encouragement and advice from numerous individuals including Vietnam- ad lo Netherlands program lecturers, friends and my family members I am really th indebted and grateful to what they have done for my thesis completion yj ip uy First of all, I would like to send my deepest gratitude to my supervisor, Professor la Truang Quang Thong who always gives advice and comments during my an lu completion of the thesis n va I am grateful for Professor Nguy~n TrQng Hoai and Professor Peter Calkins for fu their precious advice and comments from the initial ideas of the theme for my • oi m ll thesis at nh Many especially respectful thanks are sent to my family for encouraging and providing me with an opportunity to pursue my desires in higher learning and for z z their love, affection and sympathy that have helped me to gain more strength and k jm ht vb motive to complete this thesis om l.c gm an Lu n va te re LIST OFT ABLES ng ep hi w II Table 2.2: Weighted points of non-financial criteria 14 Table 2.3: Weighted points of financial ratios and non-financial criteria 15 n Table 2.1: Rating symbols long-term and short-term debt lo ad 15 Table 2.4: Weighted points of financial ratios and non-financial criteria y th Table 2.5: Rating symbols ofVCB 16 ju Table 2.6: Profit and tax with two different capital structure 18 p yi Table 3.1: Sort credit rating business 25 an lu la 26 Table 4.1: Following explain the meaning of variables (see appendix 1) 31 Table 4.2: Points of cash flow factor 37 Table 4.3: Points of management quality factor 38 n va Table 3.2: Business structure has ability to repay fu 39 Table 4.5: Points of business environment factor 40 z at nh oi m ll Table 4.4: Points of relations with banks factor (see appendix 3) Table 4.6: Points of other activities factor 41 Table 5.1: Descriptive Statistics 44 Table 5.2: Correlations (see appendix 4) z Table 5.4: Anova 48 l.c Table 5.8: Standardized residual graph 48 gm Table 5.7: Spearman rank correlation 46 k m Table 5.6: Distribution graph 46 tj Table 5.5: Coefficients of models (see appendix 6) 46 h vb Table 5.3: Model summary (see appendix 5) 45 49 om an Lu n va y te re ABBREVIATIONS ng ep hi BIDV: Bank for Investment and Development of Vietnam w n CIC: Credit information center lo ad EBIT: Earning before tax and interest rate y th p yi ju EU: Europe an lu la FDI: Foreign Direct Investment GDP: Gross Domestic Products n va GSO: General Statistics Office ofVietnam z at nh oi m ll fu MM: Modiglian Miller SBV: State Bank of Vietnam SMEs: Small Medium Enterprises z tj h vb U.S.: United States m VCB (Vietcombank): Bank for Foreign Trade of Vietnam k m co l gm WACC: Weighted average cost of capital an Lu n va te re (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam ABSTRACT h ng ie p Capital credit is very important in business activities of enterprises The w n ability to repay loans model in this thesis shows an important role when the ad lo bank make a lending decision This study examines and analyses credit th yj rating criteria affecting borrowing firms on bank credit appraisal in ip uy Vietnam through applying cross-section data from Credit Information la Center which concentrate on forty firms including the medium-sized an lu enterprises that has equity capital more than five billions Vietnam dong or va number labor more than two hundred people in leather-footwear industry n The regression model is estimated based on the multiple linear regression fu oi m ll function The ability to repay loans is dependent variable in the thesis model, and independent variables are current ratio, quick ratio, inventory nh at turnover, receivable turnover, total asset turnover, debt to equity ratio, z debt to total asset ratio, return on asset, return on common equity ratio, net z ht vb profit margin ratio, delinquency ratio, cash flow, management quality, the jm relations with banks, business environment, other activities and corporate k income tax (new added) As results, corporate income tax factor affecting gm l.c Vietnam Moreover, the results seem to be appropriate to answer questions of the research, borrowing firms are perceived to be information on the om lending decision at banks in an Lu n va te re (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam TABLE OF CONTENTS LIST OF TABLES ng hi ABBREVIATIONS ep ABSTRACT INTRODUCTION w n 1.2 Research objective lo 1.1 Problem statement ad CHAPTER 1: 1.3 Research questions y th 1.4 Methodology ju 1.5 The structure ofthesis p yi CHAPTER 2: LITERATURE REVIEW 2.1 Theory background an lu la ; 7 2.1.1 Credit appraisal n va 2.1.2 The definition of credit rating fu 2.1.3 Objective of credit rating m ll 2.1.4 Role of credit rating 2.1.6 Credit rating model z at nh oi 2.1.5 Principle credit rating 9 z 2.1 The basic elements of credit rating l.c 2.2.2 Z-score model of Altman 10 gm 2.2.1 Moody's rating analysis 10 k m 2.2 Some model of credit rating tj 2.1 7.2 Scale of criteria h vb 2.1 7.1 The number ranks of credit rating 13 17 2.3.3 Optimal capital structure theory 20 (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam te 2.3.2 MM proposition I (corporate taxes)- The value of levered firm re 17 n 2.3.1 Assumptions and proposition ofM&M theory va 17 an 2.3 Corporate income tax 13 Lu 2.2.4 Credit rating VCB 12 om 2.2.3 Credit rating of credit information center 10 (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam 2.4 Summary 21 CHAPTER 3: OVERVIEW OF LEATHER - FOOTWEAR INDUSTRY IN VIETNAM 23 ng ep hi Reasons of using data in Vietnam's leather - footwear industry 23 3.2 Overview ofleather- footwear industry in Vietnam 23 3.3 Credit ratings data ofthe leather-footwear industry in year 2008 24 3.4 Summary 27 4.1 The econometric design 28 4.2 Suggested research model 29 4.3 The conceptual design 32 p yi 32 n 28 lo w CHAPTER 4: METHODOLOGY ad y th ju 4.3.1 Criteria that banks use to appraise an lu la 32 4.3.1.2 Quick ratio- QR 33 4.3.1.3 Inventory turnover- IA 34 34 fu 4.3.1.4 Receivable turnover- RT m ll n va ' 4.3.1.1 Current ratio- CR 4.3.1.5 Total asset turnover- TAT 35 4.3.1.7 Debt to equity ratio- DE 35 4.3.1.8 Net Profit margin- NPM 36 z at nh oi 4.3.1.6 Debt to total asset ratio - DA z 39 39 om 4.3.1.14 Business environment- BE , g1-'l J ) l.c 4.3.1.13 Relations with banks- RB 37 gm 4.3.1.12 Management quality- MQ k m 4.3.1.11 Cash flow- CF 36 tj 4.3.1.10 Return on Equity- ROE 36 h vb 4.3.1.9 Return on assets - ROA 4.3.1.16 Delinquency ratio- DR 42 42 n va 4.3.2 Corporate income tax (new factor)- CIT an Lu 41 4.3.1.15 Other activities- OA 43 (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam y 4.5 Summary te 43 re 4.4 Data collection method (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam CHAPTER 5: DATA PROCESSING AND EMPIRICAL RESULTS 5.1 Descriptive statistics 44 44 h ng 5.2 Regression and hypothesis testing 45 ie p w n 5.2.1 Correlation analysis 45 5.2.2 Evaluating the reliability of multiple linear regression model 45 5.2.3 Test the relevance of the overall regression model 46 5.2.4 Test the significance of partial regression coefficients 46 ad lo 5.2.5 Assumption of multiple linear regression model 47 5.2.5.2 Homoscedasticity 48 49 yj 47 ip th 5.2.5.1 Linearity Assumption uy 5.2.5.3 Distribution standard of residual la 49 an lu 5.2.5.4 No-serial correlation 50 5.2.5.5 Collinearity diagnostic va 50 n 5.3 Summary fu v vb V111 ht ix k jm X gm APPENDIX4 APPENDIX APPENDIX6 z APPENDIX3 iv z APPENDIX2 at APPENDIX 51 nh REFERENCE oi m ll CHAPTER 6: CONCLUSION Xl l.c om an Lu n va te re (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam CHAPTER 1: INTRODUCTION ng This chapter starts with introduction to problem statement It then presents hi ep research objectives, questions and methodology in sections: 1.2, 1.3 and 1.4, respectively Finally, this chapter show thesis structure in section 1.5 w n 1.1 Problem statement lo ad The world economy is currently undergoing a severe crisis The cause of the y th crisis is following: p yi ju - Objectively, on the theory, growth and development economic generally an lu la follows cycle After a period of extreme development, it will reach the top, followed by a recession cycle With this perspective, the world economy n va developed rapidly in last years of previous century and peaked during the period m ll fu 2001-2007 z at nh oi - Subjectively, these are the errors in the management economy of economic times "digital" - "virtual economy", particularly in management of financial system, money and banks, namely approximately six percents of all z mortgage loans in United States were in default in 2008 Historically, defaults h vb were less than one-third of that, i.e., from 0.25% to 2% tj m k The crisis began with the collapse of Bank Lehman Brother Investment, one gm ofthe largest banks in the United States, on June 2008 (BBC News, 2008) As l year progressed, the United States banking and financial system, followed by the m co EU and Japan, were all shaken by the crash of multiple banking, corporate an Lu finance-insurance institutions te (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam re percent Trade turnover reduced strong (export of Eastern Asia reduced 30%, n GDP growth in most of developed countries dropped to around negative 2.2 va In the first three months of 2009, the situation continued to deteriorate, with (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam CHAPTER6: CONCLUSION h ng According to government's orientations, banks must achieve credit growth ie but ensure credit quality Hence, this thesis studies the affect of corporate income p tax factor to ability to repay loans of enterprises If new factors that affect ability w n to repay loans, banks can be credit appraisal to increase lending in but still safe ad lo credit th yj Present, factors are used to evaluate credit rating in credit appraisal of ip uy banks in Vietnam not include corporate income tax factor in credit rating lu la results Data is chosen in this thesis is credit rating criteria data of enterprises in an Vietnam leather - footwear industry is being used at banks, including new added n va corporate income tax factor fu Multiple linear regression model is used in the thesis is to determine: Does oi m ll enterprise income tax factor affect ability to repay loans of borrowers? And the nh results study has proved that new factor is corporate income tax factor affect at ability to repay loans of borrowers after running SPSS software Corporate z z income tax will affect the evaluation of increasing ability to repay loans This vb jm ht thing will lead to bank's credibility with the borrowers will increase Thus, banks may increase limit loans for enterprises to increase outstanding loans but k gm ensuring credit quality ensuring credit quality an Lu With banks: om l.c Therefore, banks will improve business performance, credit growth, but n va According to the thesis, corporate income tax of enterprises affects the te ensuring credit quality 51 (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam re decision lending by banks in credit appraisal It increases limit loans at banks, but (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam However, limited data of thesis only study the impact of corporate income tax factor in credit rating for medium size enterprises in leather and footwear industry of Vietnam In order to apply new corporate income tax factor h ng conjunction with factors are used at banks to evaluate repayment ability of ie borrowers in credit appraisal, author recommends banks as follow: p • Make research in the broad about influence of corporate income tax w n factor to access credit for enterprises in many sectors with different scale ad lo enterprises th • Must build experimental model have corporate income tax factor for yj ip uy enterprises to consider ability to repay loans of borrowers before and after la application corporate income tax factor Thus, banks in credit rating will test the an lu model by adding points for enterprise and its number depends on total corporate va income tax of each enterprises Banks can increase the limit loan for enterprises n following the number of adding points After some time monitoring the fu oi m ll repayment of the enterprises, if enterprises have ability to repay loan well by increasing limit loan following level of corporate income tax, prove that the real nh at impact of corporate income tax factor in credit rating relevant with the content of z ht vb • z the thesis Study to build credit point table which has new factor is corporate jm income tax for using in banks Thus, the bank established credit rating system for k gm borrowers, in which corporate income tax factor will be established by a weight l.c that follow the affecting level of corporate income tax is calculated by further om research y te re investment will bring profit for enterprises When enterprises use contributed n they will use a part of contributed capital to other investment and the other va In case, if enterprises have capital structure to save corporate income tax, an Lu With enterprises 52 (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam capital for other investment, they need to add bank loans to produce business Consequently, need for bank loans of enterprises increase and it made an increase interest loans expenses, they will be reduced corporate income tax, leading saving corporate income tax ng ep hi Thus, when enterprises represent the optimal capital structure to saving the corporate income tax, means that enterprises have to pay much corporate income tax Therefore, enterprises increase using debt to saving the corporate w n income tax And banks base on the corporate income tax before businesses have lo ad optimal capital structure, to increase reliability in the credit appraisal by banks y th with enterprises have to pay much corporate income tax Since then, banks can p yi ju increase limit loan for enterprises an lu la The limitations ofthe research: Although there have been attempts, but the author acknowledges that the thesis remains limitation in the processing thesis, such as: n va • Sampling method has only been a sector and a group enterprise fu • z at nh oi m ll Therefore, it can affect the research results The specific direction: because of limit time, enterprises not be directly interviewed by author Consequently, data is used to processing and calculating in this thesis is data which is collected by Credit Information Center z tj h vb about credit rating of enterprises k m m co l gm an Lu n va te re 53 (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam REFERENCE h ng 1) Altman, E.l., (1993), "Corporate Financial Distress and Bankruptcy", New ie York: John Wiley & Sons, Chapter p 2) Andre, P.H., (2009), "Advanced risk management for financials", JFPS w Group, Singapore n ad lo 3) Bhattacharya, H., (1998), "Banking strategy, Credit appraisal and lending th decisions", Oxford University Press yj ip uy 4) Cortes, C., and Berggren, A., (2001), "Financing growth of 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(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam 11)Jonathan Golin, (2001), "The bank credit analysis handbook: A guide for analysts, bankers and investors", Singapore: John Wiley & Sons, 2001, Chapter h ng 12)J.P Morgan, (2004), "Determining optimal capital structure", Research ie paper p 13)Karel Jansen, (2008), "Money & Banking" Course w n 14)Le Thi Thanh Ha and Le Hoang Vinh, (2008), "Building optimal capital ad lo structure model for enterprises in Vietnam", Master thesis, University of th Economics Ho Chi Minh City yj uy 15)Lee, Y.C., (2007), "Application of support vector machines to corporate ip la credit rating prediction", Pergamon Press, Inc, Tarrytown, NY, USA, an lu Volume 33, Issue va 16)Limsombunchai, V., C Gan and M Lee, (2005), "Lending decision model n for agricultural sector in Thailand", Research paper, Lincoln University, (2004), oi m ll 17)Moody's, fu New Zealand "Moody's rating symbols & Definitions", nh at http://www.moodys.com, accessed on September, 2009 z z 18)Michel Crouhy, Robert Mark, Dan Galai, (2000), "Risk Management", 1st jm ht vb Edition, McGraw-Hill, Chapter 19)Nguyen Dang Hung, (2009), "The process of international economic k l.c Ministry of Foreign Affairs Vietnam gm integration of Vietnam in the backround of a new world economy", NJ: om 20)Nguyen Minh Kieu, (2008), "Credit apprisal", The statistic publisher n University of Economics Ho Chi Minh City va 22)Nguyen Thanh Huyen (2008), "Credit rating system", Master thesis, an Lu 21)Nguyen Trong Hoai, (2008), "Econometrics", Course te re y 11 (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam 23)Nguyen Van Cong (2006), "Determinants of capital structure of manufacturing small and medium enterprises in Dong Nai", MA thesis in Economics, Vietnam-Netherlands program h ng 24)No 60/2005/QHll dated on 12 Sep 2000, "Enterprise Law", Vietnam ie p 25)Ross, S.A., Westerfield, R.W., Jaffe, J.F., (2005), "Corporate Finance", ih Edition, McGraw-Hill and Irwin, Chapter and Chapter 15 w n 26)Standard Poor's, ad lo & (2006), "Corporate rating criteria 2006", www.corporatecriteria.standardandpoors.com , accessed on September, th yj 2009 uy 27)Steven M Sheffrin (2003), "Economics: Principles in action", Prentice ip lu la hall, Chapter n va Chapter 15 an 28)Tran Ngoc Tho (2007), "Corporate finance", The statistic publisher, fu 29)United Nations, (2008), "Credit rating agencies and their potential impact oi m ll on development countries", Discussion papers nh 30)Vietcombank, Ernst & Young (2008), "Credit handbook", Joint stock at commercial for foreign trade inVietnam z z 31)Zan Huang, Hsinchun Chen, Chia-Jung Hsu, Wun-Hwa Chen, Soushan vb jm ht Wu, (2004), "Credit rating analysis with support vector machines and neural networks: a market comparative study", Decision Support Systems k om l.c gm 37 an Lu n va te re iii (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam APPENDIX Table 4.1: Explain the meaning of variables ng Definition ofvariables Variables Odd Current ratio = Current assets/ Current liabilities QR Quick ratio= (Current assets- Inventories)/Current liabilities ep CR hi I w n Inventory turnover = Cost of goods sold/Average inventories IT lo ad Receivable turnover = Accounts Receivable/Annual credit sales/365 RT TAT DE Debt to equity ratio= Total debt/Total assets DA Debt to total asset= Total debt/Total equity ROA Return on asset= Net income/Total asset ROE Return on common equity= Net income/Shareholder's equity 10 NPM Net profit margin= Net profit after tax/Sales 11 DR Delinquency ratio= Delinquency/ Outstanding debts 12 CF Cash flow measures the ability of the borrower to repay loan form the cash flow 13 MQ 14 RB 15 BE y th ju Total asset turnover= Net sales/Total asset an lu la p yi n va z at nh oi m ll fu z h vb Management quality measure the top management team's capability in controlling and tj k m managing the business l gm The relations with banks measure credit relationship with banks Business environment measure the percentage of sales made to the single largest m co customer, purchase sourced form the single largest supplier and environment risk OA income from export activities; dependence on partners; profit of companies in recent an 16 Lu Other activities measure diversification of activities by industry, market, position; va years; status of enterprises Corporate income tax ratio = corporate income tax cost I earnings before interest and n CIT re 17 y te taxes IV (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam n lo (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam ad y th ju • yi pl ua al n APPENDIX2 va The n Ability to Current Quick Inventory Receivable Total asset repay ratio ratio turnover turnover turnover loans Debito total asset Debito Delinquency Net profit Return on equity ratio ratio margin asset Cash Management relations Business Other flow quality with environment activities Corporate income taxes banks 0.072 0.169 0.316 100 80 100 80 100 0.125 0.055 0.124 0.173 0.183 100 100 80 80 80 0.216 0.913 0.119 0.217 0.416 100 80 80 80 80 0.173 0.130 0.143 0.167 100 100 100 80 80 0.181 0.021 0.062 0.199 100 100 100 100 80 0.134 0.070 0.040 0.051 100 100 100 100 100 0.211 0.083 0.193 100 80 80 80 80 0.16 0.044 0.110 100 80 100 100 100 0.101 0.718 100 100 80 80 100 0.316 0.222 100 60 80 60 60 0.124 (0.040) t re 20 60 60 60 80 0.013 0.021 0.043 100 80 100 60 60 0.1 0.009 0.041 0.192 80 80 80 60 0.032 1.4 0.9 10.3 55.4 2.400 93.2 10.6 10.6 135.8 1.400 92.6 1.7 1.5 10.3 78.8 1.800 0.477 93.8 2.4 1.4 5.4 24.8 1.100 0.147 0.173 85.4 1.1 0.8 18.4 39.8 2.900 0.688 2.200 91.8 1.4 I 60.4 0.600 0.213 0.271 90.2 1.1 0.6 6.5 52.2 2.100 0.568 0.031 88 1.5 1.4 24.5 61 1.200 0.605 1.529 om 0.873 92.4 91.2 1.5 1.2 11.4 145.5 1.900 0.647 1.833 0.130 0.253 10 80.2 1.1 0.2 6.7 16.4 2.800 0.838 5.185 O.oJ3 0.036 II 80 1.6 1.5 19.5 79.9 0.500 0.127 0.145 (0.086) 12 82.4 1.3 0.7 5.4 52 1.600 0.509 1.038 13 84.3 1.2 0.9 14.3 34.1 4.800 0.787 3.699 at 0.052 common equity I nh 0.466 Return on an Lu oi m ll fu No z z ht vb k jm gm l.c 0.039 0.036 n va (0.051) ey I ac th 100 si cd eg v jg hg (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam n a lo (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam d u yj th II! p yi - 31.6 2.400 0.602 1.511 0.001 0.003 0.007 100 80 80 80 60 0.007 0.9 8.1 n va 1.700 0.563 1.290 0.013 0.023 0.052 100 80 80 60 60 0.069 1.3 1.1 15 94.3 2.000 0.624 1.662 0.001 0.001 0.004 100 80 80 60 80 0.011 83.5 0.8 0.5 5.6 101.7 oi 0.800 0.523 1.098 0.079 0.062 0.130 40 60 80 80 100 0.296 18 79.8 0.5 0.4 29.7 16.6 1.700 0.519 1.078 0.002 0.004 0.008 40 80 80 60 80 0.021 19 72.5 I 0.2 5.4 16.7 2.400 0.905 9.502 0.002 0.004 0.004 100 100 80 80 80 0.014 20 76.7 0.8 0.8 143.1 15.6 1.000 0.687 0.007 0.007 0.023 40 100 100 80 80 0.058 21 70.9 1.5 1.4 40.7 114.1 0.900 0.462 0.859 (0.036) (0.032) (0.060) 20 80 80 80 40 22 75.4 1.1 0.3 1.1 109.9 0.500 0.589 0.431 0.075 0.036 0.087 100 80 100 60 60 0.251 23 73.2 1.2 0.7 4.7 63.1 1.600 0.595 1.468 I 0.024 0.038 0.094 100 60 60 80 80 0.072 24 69.9 I 0.4 3.2 56 0.900 0.447 0.808 om (0.019) (0.035) 20 60 100 60 20 25 71.9 0.6 0.4 Ill 39.3 1.400 0.549 1.216 (0.156) (0.486) 20 60 100 80 40 26 74.8 0.8 0.3 4.5 39.8 2.300 0.991 110.334 0.014 0.033 3.659 40 80 80 60 80 0.055 27 77.0 3.6 3.2 293.7 0.600 0.710 2.446 0.014 0.009 t re an lu la 5.9 0.030 100 80 80 80 80 0.046 28 69.1 I I 3.6 708.3 0.300 0.631 1.707 0.007 0.002 0.005 80 80 80 60 80 0.016 29 65.8 II 0.6 5.9 93.4 1.400 0.695 2.277 0.004 0.006 0.019 60 80 60 60 0.015 81.1 1.2 0.5 15 83 1.4 16 84.6 17 39.7 m ll fu 14 z at nh z vb j ht 2.197 k m gm l.c (0.022) Lu an (0.219) n va ey ac th 80 si cd eg VI jg hg (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam n a lo (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam d u yj th • p yi 0.669 2.017 (0.747) (0.378) (l.J41) 20 60 60 80 60 0.300 0.469 0.884 0.024 0.008 0.016 80 80 80 80 80 0.047 0.100 0.676 2.086 (0.442) (0.025) (0.078) 20 80 40 60 60 oi an lu la 0.500 0.622 1.649 (0.013) (0.017) (0.046) 20 80 40 60 60 0.593 1.455 (0.004) (0.004) (0.009) 20 60 60 60 40 1.800 1.227 (5.402) (0 005) (0.009) (0.038) 20 80 80 60 60 64 0.700 0.888 0.010 0.007 0.061 20 80 80 60 60 0.028 1.7 106.2 0.700 0.656 1.910 0.004 0.003 0.009 80 80 60 60 80 0.011 0.2 1.3 65.1 0.600 0.675 2.079 0.007 0.004 0.013 20 60 60 60 60 0.007 0.6 0.5 1.5 1302.8 0.100 0.700 2.331 0.150 0.013 0.043 20 60 40 60 60 0.2 0.1 1.9 26 1.000 2.344 (1.744) (0.277) (0.278) (0.207) 20 60 20 60 60 1.2 0.5 5.8 31 64.3 1.3 0.5 0.9 32 62.5 2.1 2.1 6.6 I 132.6 33 68.7 1.2 0.7 8.8 121.1 34 62 0.9 0.3 2.4 62.8 0.900 35 67.8 2.8 0.1 2.2 1.3 36 66.9 0.9 0.2 1.4 37 56.9 l.J 0.5 38 59.8 0.8 39 52.8 40 46.5 35.9 n va 189.8 m ll fu 1.300 z at nh z vb 7.926 k m 67.2 j ht 30 gm I om l.c I Lu I an va n y te re ac th si cd eg Vll jg hg (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam n lo (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam ad u yj th • p yi an lu la n va Points fu Criteria APPENDIX3 100 The times of the extension None 12-36 months months 40 20 1- 12 months No information (new Non-pay debt on time times in past 12 months times in past 12 months ~ borrowers) z at nh >36 60 oi m ll Repayment schedule 80 times in past times in past 12 months 36 months debt z for the past 12 months; or the past 36 or times overdue under 30 or times overdue under 90 times overdue under 90 days for months days for the past 36 months days for the past 36 months the past 36 months Solvency in past Solvency in past 12 month Insolvency in the past 24 Insolvency in the past 12 months l.c months om credit, guarantee or other gm 24 month incapacity payment (letter of k Never times overdue under 30 days days for the past 12 months; jm Total commitments None times overdue under 30 days for the past 12 months; vb Overdue debt in the past times overdue under 30 ht times overdue under 30 days for past 36 month requirement of banks month borrowers) ac th Source: VCB, Ernst & Young (2008) None y te sufficient according to No information (new re Yes, in past 12-36 Yes, in past :S 12 month n Yes, in va Information is provided an Lu commitments) si cd eg viii jg hg (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam APPENDIX4 • Table 5.2: Correlations ng hi ep Ability to repay loans 0.331' Pearson Correlation Current ratio 0.037 Sig (2-tailed) w Pearson Correlation n Quick ratio lo ad Inventory turnover Sig (2-tailed) 0.030 Pearson Correlation 0.142 y th Sig (2-tailed) 0.382 -0.366 Pearson Correlation Sig (2-tailed) 0.020 0.462 Pearson Correlation an lu la p yi ju Receivable turnover Total asset turnover 0.343' Sig (2-tailed) Debt to equity ratio 0.003 -0.561' Pearson Correlation Sig (2-tailed) n va Debt to total asset ratio 0.000 Pearson Correlation -0.019 Sig (2-tailed) 0.907 fu Sig (2-tailed) Pearson Correlation Sig (2-tailed) Return on common equity Pearson Correlation Pearson Correlation Sig (2-tailed) Pearson Correlation Pearson Correlation Sig (2-tailed) Pearson Correlation 0.000 0.674 0.000 n Sig (2-tailed) 0.000 0.530 va Corporate income tax 0.000 0.556 an Sig (2-tailed) 0.669 Lu Other activities Pearson Correlation 0.000 om Business environment 0.000 0.536 l.c Sig (2-tailed) 0.624 gm Relations with bank 0.248 k m Sig (2-tailed) 0.187 tj Management quality Pearson Correlation 0.000 h vb Cash flow 0.628 z Sig (2-tailed) 0.009 z at nh oi Return on asset 0.409 Pearson Correlation m ll Net profit margin ** Correlation is significant at the 0.01 level (2-tailed) y te • re *.Correlation is significant at the 0.05 level (2-tailed) lX (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam I! APPENDIXS ng hi ep Table 5.3: Model summary Std Error Durbin- of the Estimate Watson R Square Adjusted R Square R w Model n lo 0.796b 0.454 0.440 8.9029 0.633 0.613 7.3960 0.859c 0.738 0.716 6.3381 0.884d 0.782 0.757 5.8592 0.919e 0.845 0.822 5.0214 0.932( 0.869 0.846 4.6752 p yi an lu la ju 1.990 n va fu 0.674 y th ad m ll a Predictors: (Constant), Corporate income tax z at nh oi b Predictors: (Constant), Corporate income tax, Relations with bank c Predictors: (Constant), Corporate income tax, Relations with bank, Cash flow d Predictors: (Constant), Corporate income tax, Relations with bank, Cash flow, z tj h vb Total asset turnover Total asset turnover, Debt to equity ratio k m e Predictors: (Constant), Corporate income tax, Relations with bank, Cash flow, gm an Lu g Dependent Variable: Ability to repay loans om Total asset turnover, Debt to equity ratio, Other activities l.c f Predictors: (Constant), Corporate income tax, Relations with bank, Cash flow, n va y te re X (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam APPENDIX6 ng hi Table 5.5: Coefficients of models ep Coefficients n w U nstandardized Standardized Coefficients Coefficients lo Model ad (Constant) 69.272 Corporate income tax 89.473 (Constant) 48.875 5.032 Corporate 63.135 income tax 14.596 Sig t Beta Tolerance 1.819 p yi 15.908 0.674 38.08 0.000 5.624 0.000 9.713 0.000 4.325 4.250 VIF 1.000 1.00 0.000 0.820 1.22 0.000 0.820 1.22 0.777 1.28 0.770 1.299 la an lu 0.476 n va B u yj th Std Error Collinearity Statistics fu Relations with bank 0.288 0.068 (Constant) 43.251 4.560 Corporate income tax 52.078 12.844 0.392 4.055 Relations with bank 0.232 0.060 0.376 3.869 0.000 Cash flow 0.140 0.037 0.355 3.792 0.001 (Constant) 43.355 4.216 10.284 0.000 Corporate income tax 54.555 11.910 0.411 4.581 0.000 0.773 Relations with bank 0.203 0.056 0.330 3.600 0.001 0.742 1.348 Cash flow 0.113 0.036 0.287 3.181 0.003 0.762 1.312 2.912 1.091 0.228 2.669 0.011 0.850 1.176 oi m ll 9.485 0.000 nh at 0.000 z z 0.467 ht vb k jm 0.828 1.207 om l.c gm 1.294 an Lu n te re turnover va Total asset xi (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam (Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam(Luáºn.văn).bank.credit.appraisal.criteria.for.borrowing.firms.in.vietnam
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