Factors affecting individual customers choices of commercial banks to borrow an empirical study in ho chi minh city

MINISTRY OF EDUCATION & TRAINING HO CHI MINH CITY UNIVERSITY OF BANKING GRADUATION THESIS FACTORS AFFECTING INDIVIDUAL CUSTOMERS’ CHOICES OF COMMERCIAL BANKS TO BORROW: AN EMPIRICAL STUDY IN HO CHI MINH CITY MAJOR: FINANCE – BANKING CODE: 34 02 01 NGUYEN DUY NAM LONG HO CHI MINH CITY, 2023 MINISTRY OF EDUCATION & TRAINING HO CHI MINH CITY UNIVERSITY OF BANKING GRADUATION THESIS FACTORS AFFECTING INDIVIDUAL CUSTOMERS’ CHOICES OF COMMERCIAL BANKS TO BORROW: AN EMPIRICAL STUDY IN HO CHI MINH CITY MAJOR: FINANCE – BANKING CODE: 34 02 01 Student’s full name: NGUYEN DUY NAM LONG Student’s ID: 050607190242 Class: HQ7-GE04 SUPERVISOR NGUYEN THI MY HANH, PHD ii HO CHI MINH CITY, 2023 i ABSTRACT The research topic is about “Factors affecting individual customers’ choices of commercial banks to borrow: an empirical study in Ho Chi Minh City” from 2022 to 2023 The study conducted a survey involving 652 individuals residing in Ho Chi Minh City that needed to borrow money from commercial banks Based on the collected data, a range of quantitative methods were employed, including descriptive statistics, multiple regression analysis, correlation matrix, and ordinary least squares (OLS) modeling to determine the optimal model The results revealed that out of the seven factors, all seven factors significantly influenced individual customers‟ choices of commercial banks to borrow These factors included interest rate (IR), service quality (SQ), loan policy (LP), convenience (C), fees and insurance (FI), reputation and brand (RB), influence of relatives and friends (IRF) Among them, the interest rate factor had the strongest impact on the dependent variable, while the convenience factor had the least influence Additionally, except for education level, other study sample characteristics did not affect the choice of commercial banks for borrowing Based on the experimental results, the author provided recommendations related to each identified factor to improve personal credit quality, attract new customers, retain existing customers, and increase profitability for commercial banks Moreover, the author hoped that this research would serve as a high-quality reference for future studies and a valuable resource for practical application in the banking sector Key words: Individual Customers, Individual Loans, Borrowing Decisions, Factors Influencing Choices, Commercial Banks, Ho Chi Minh City ii TÓM TẮT Đề tài nghiên cứu “Các nhân tố ảnh hưởng đến việc lựa chọn ngân hàng thương mại khách hàng cá nhân để vay tiền: nghiên cứu thực nghiệm thành phố Hồ Chí Minh” giai đoạn 2022-2023 Bài nghiên cứu tiến hành khảo sát 652 đối tượng sinh sống địa bàn thành phố Hồ Chí Minh đã, có nhu cầu vay tiền ngân hàng thương mại Dựa liệu thu thập được, loạt phương pháp định lượng sử dụng bao gồm: thống kê mô tả, kiểm định đa cộng tuyến, ma trận tương quan, mơ hình bình phương tối thiểu (OLS) mơ hình tối ưu Kết cho thấy có số nhân tố có ảnh hưởng tới định lựa chọn ngân hàng thương mại để vay tiền là: lãi suất (IR), chất lượng dịch vụ (SQ), sách cho vay (LP), tiện lợi (C), loại phí bảo hiểm (FI), danh tiếng thương hiệu (RB), ảnh hưởng người thân bạn bè (IRF) Trong đó, nhân tố lãi suất có ảnh hưởng mạnh mẽ tới biến phụ thuộc nhân tố tiện lợi có tác động Bên cạnh đó, ngoại trừ trình độ học vấn, tính chất khác mẫu nghiên cứu khơng có ảnh hưởng đến lựa chọn ngân hàng thương mại để vay tiền Dựa kết thực nghiệm thu được, tác giả đề xuất khuyến nghị liên quan tới nhân tố nêu nhằm cải thiện chất lượng tín dụng cá nhân để thu hút khách hàng mới, giữ chân khách hàng cũ tăng lợi nhuận cho ngân hàng thương mại Đồng thời, tác giả mong muốn nghiên cứu trở thành nguồn tài liệu tham khảo chất lượng cho nghiên cứu liên quan sau trở thành nguồn tư liệu quý giá ngân hàng áp dụng vào thực tiễn Từ khóa: Khách hàng cá nhân, Tín dụng cá nhân, Quyết định vay tiền, Những yếu tố ảnh hưởng đến lựa chọn, Ngân hàng thương mại, Thành phố Hồ Chí Minh iii AUTHOR’S DECLARATION My name is Nguyen Duy Nam Long, a student studying the high-quality program at HQ7-GE04 class at Ho Chi Minh City University of Banking I hereby declare that the thesis titled "Factors affecting individual customers' choices of commercial banks to borrow: An empirical study in Ho Chi Minh City" is an independent research work conducted solely by myself The data and research findings were collected, analyzed, and presented honestly and objectively The entire content and research results have not been previously published in any other studies Ho Chi Minh City, August 2023 Nguyen Duy Nam Long iv ACKNOWLEDGEMENT Firstly, I would like to extend my heartfelt gratitude to my supervisor, Ph.D Nguyen Thi My Hanh, for her unwavering support and guidance throughout my graduate thesis preparation Her knowledge and wisdom have been invaluable in shaping my work I would also like to express my appreciation to all the faculty members at Ho Chi Minh City University of Banking Your valuable experience and knowledge have played a significant role in my learning journey and the completion of this thesis Given the constraints of time and my personal limitations in expertise and knowledge, I acknowledge that this work may contain imperfections Therefore, I welcome any constructive feedback from my teachers, as it will be highly appreciated Lastly, I send my best wishes to all the lecturers at Ho Chi Minh City University of Banking May you continue to enjoy good health and perseverance in your noble mission of educating and nurturing future generations v TABLE OF CONTENT LIST OF ABBREVIATIONS ix LIST OF FIGURES .x LIST OF TABLES xi CHAPTER INTRODUCTION 1.1 Rationale of the study 1.2 Research objective 1.3 Research questions 1.4 Research subject and research scope 1.4.1 Research subject .2 1.4.2 Research scope .2 1.5 Research method 1.5.1 Qualitative method 1.5.2 Quantitative method .3 1.6 Contribution of the study 1.7 Structure of the study CONCLUSIONS OF CHAPTER CHAPTER LITERATURE REVIEW .6 2.1 Overview of commercial banks and individual loans 2.1.1 Commercial banks 2.1.2 Individual loans 2.2 Consumer behavior and the decision-making process 2.2.1 The Theory of Reasoned Action (TRA) vi 2.2.2 Theory of Planned Behavior (TPB) .10 2.3 Empirical studies 12 2.3.1 Foreign studies .12 2.3.2 Domestic studies 14 CONCLUSIONS OF CHAPTER 17 CHAPTER RESEARCH METHOD 18 3.1 Research model 18 3.2 Research hypothesis 19 3.2.1 Interest rate 19 3.2.2 Service quality 19 3.2.3 Loan policy 20 3.2.4 Bank Reputation and Brand 20 3.2.5 The Influence of Relatives and Friends .21 3.2.6 Convenience 21 3.2.7 Fees and Insurance .22 3.3 Research process 23 3.4 Research data 25 3.4.1 Secondary data .25 3.4.2 Primary data 25 3.5 Research method 26 3.5.1 Qualitative research 26 3.5.2 Quantitative research 27 3.6 Detail about data analysis process 29 vii 3.6.1 Descriptive statistics analysis 29 3.6.2 Cronbach's Alpha coefficient .29 3.6.3 Exploratory factor analysis (EFA) .30 3.6.4 Pearson correlation analysis 33 3.6.5 Linear regression analysis 34 3.6.6 OLS model 39 3.7 Independent Sample T-Test and One-Way ANOVA 40 3.7.1 Independent Sample T-Test 40 3.7.2 One-Way ANOVA 41 CONCLUSIONS OF CHAPTER 42 CHAPTER RESEARCH RESULTS AND DISCUSSION 43 4.1 Descriptive statistics of the sample and variables .43 4.1.1 Descriptive statistics of the sample 43 4.1.2 Descriptive statistics of variables .47 4.2 Check the reliability of the scale and factor analysis 50 4.2.1 Check the reliability of the scale 50 4.2.2 Exploratory Factor Analysis (EFA) 52 4.3 Regression analysis and model testing .62 4.3.1 Correlation matrix 62 4.3.2 Regression analysis and model evaluation 63 4.4 The impact of sample characteristics on the dependent variable 72 4.4.1 Gender 72 4.4.2 Age .73