An analysis of consumer loans activity at sai gon thuong tin commercial joint stock bank – dong hoi branch in quang binh province

DUY TAN UNIVERSITY INTERNATIONAL SCHOOL UNDERGRADUATE THESIS AN ANALYSIS OF CONSUMER LOANS ACTIVITY AT Sai Gon Thuong Tin Commercial Joint Stock Bank – DONG HOI BRANCH IN QUANG BINH PROVINCE MENTOR : MBA LUU THI THU HUONG STUDENT : NGUYEN THI THANH THUY CLASS : K22 PSU QNH ID NUMBER : 2220247946 Da Nang, 2020 Table 1: Table of classification of bad debt groups 16 Diagram 1: organizational structure Sacombank Pgd Dong Hoi Quang Binh .19 Table 2.1: The situation of mobilizing capital at SACOMBANK – DONG HOI BRANCH from 2017-2019 .21 Table 2.2: Lending situation at Sacombank - Dong Hoi Transaction Office Quang Binh over years 2017-2019 24 Figure 2.2: Loan situation at Sacombank - Dong Hoi Transaction Office Quang Binh over years 2017-2019 25 Table 2.3: Income statement at Sacombank - Dong Hoi Transaction Office Quang Binh over years 2017-2019 27 Diagram 2.2: Consumer lending process at Sacombank Quang Binh 36 Table 2.4 General situation of lending activities at SACOMBANK – DONG HOI BRANCH from 2017- 2019 40 Table 2.5: Consumer lending by term at SACOMBANK – DONG HOI BRANCH from 2017-2019 43 Table 2.6: Consumer lending by customers at SACOMBANK – DONG HOI BRANCH from 2017-2019 47 Table 2.7: Consumer lending in the form of guaranteed at Sacombank - Dong Hoi from 2017-2019 50 Table 2.8: Consumer lending by consumer loan product at SACOMBANK – DONG HOI BRANCH from 2017- 2019 54 DISCLAIMER I certify that the attached thesis is my original work No other person’s work has been used without due acknowledgement Except where I have l clearly stated that I have used some of the this material , it has not been presented by me for examination in any other course or subject at this or any other institution I understand that the work submitted may be reproduced and/or communicated for the purpose of detecting plagiarism I understand that should this declarationbe false, I am libel to be penalized under the Duy Tan University regulations Signature _ Date: _ LIST OF TABLE INTRODUCTION CHAPTER A THEORETICAL BASIS FOR CONSUMER LOANS ACTIVITIES OF COMMERCIAL BANKS 1.1.THEORETICAL BASIS FOR LOANS ACTIVITIES AT THE COMMERCIAL BANK 1.1.1 Concept loans 1.1.2 Loans principle 1.1.3 Loans classification 1.1.4 The role of commercial bank 1.2 THEORETICAL BASIS OF THE CONSUMER LOANS ACTIVITIES OF COMMERCIAL BANK 1.2.1  Consumer Loans Concept .6 1.2.2  Consumer loans characteristics .6 1.2.3 Consumer loans classification 1.2.4 Factors affecting Consumer loans activities of commercial banks 10 1.3 CONSUMER LOANS INDICATORS 15 1.3.1 Loans sales .15 1.3.2 Debt collection sales 15 1.3.3 Average loans debt 15 1.3.4 Overdue debt 15 1.3.5 Bad debt 16 CHAPTER CURRENT SITUATION OF CONSUMER LOANS AT COMMERCIAL JOINT STOCK BANK - DONG HOI QUANG BINH FROM 2017-2019 .17 2.1 OVERVIEW SACOMBANK DONG HOI QUANG BINH 17 2.1.1 Introduction to the Sacombank 17 2.1.2 The process of formation and development 18 2.1.3 Organizational structure of the commercial bank and resources 19 2.1.4 The business performance of Sacombank Dong Hoi Quang Binh from 20172019 21 2.2.CONSUMER LOANS ACTIVITIES SACOMBANK – DONG HOI TRADING DEPARTMENT OVER YEARS 7-2019 29 2.2.1 Regulations on consumer loans in SACOMBANK – DONG HOI BRANCH29 2.2.2 The consumer lending process at Sacombank Dong Hoi Quang Binh 36 2.2.3 Consumer lending situation at Sacombank 38 2.3.EVALUATION OF CONSUMER LOANS ACTIVITIES AT SACOMBANK - DONG HOI TRADING DEPARTMENT .57 2.3.1 Achieved results .57 2.3.2 Limitations .60 2.3.3 Reason 61 CHAPTER SOLUTION EXPAND CONSUMER LOANS ACTIVITIES SACOMBANK DONG HOI QUANG BINH .65 3.1 GENERAL ORIENTATION ON BUSINESS OPERATIONS AT SACOMBANK JOINT-STOCK COMMERCIAL BANK IN DONG HOI TRADING IN THE COMING TIME 65 3.2 SOLUTIONS TO CONSUMER LOANS IN SACOMBANK QUANG BINH 66 3.2.1 Main solution 66 3.2.2 Additional solutions .70 3.3 REQUEST 73 3.3.1 Petition for the local government 73 3.3.2.Petition for head office 73 3.3.3 Proposals for the government 74 CONCLUSION .76 INTRODUCTION Reasons for choosing a research topic The bank is a financial intermediary, and is an important capital channel for the entire economy In a competitive environment, the economy has been integrated, especially Vietnam's commitment to open the domestic financial market according to its commitments to foreign partners, which is the participation of financial corporations Multinationals have strong financial, technical and technological strengths In the increasingly fierce competition environment, the completion and expansion of operations is the direction and motto for banks to survive and develop In banking activities with loans activities, however, from the past up to now, banks have only paid attention to loans to business manufacturers, but did not pay attention to the final stage of the production process use If only loans a lot of production but customers cannot consume because people not have demand for such goods or have a need but cannot afford to pay, it will inevitably lead to supply exceeding demand and goods have inventory and capital stagnation Currently, the country's economy is on the way of developing, human life has been improved day by day, life quality has been improved day by day Increasing human demand tends to use goods of great value while the ability to pay at present is not enough This is an opportunity for the development of Consumer loans services at banks After a period of internship and study at Sacombank, Dong Hoi Transaction Office, Quang Binh I decided to choose the topic " AN ANALYSIS OF CONSUMER LOANS ACTIVITY AT Sai Gon Thuong Tin Commercial Joint Stock Bank – DONG HOI BRANCH IN QUANG BINH PROVINCE " to research during my internship at the Bank Research Objectives The objective of the thesis clarifies the following issues: - Analyzing and assessing the current situation of Consumer loans at SACOMBANK – DONG HOI BRANCH Transaction Office in the period 20172019 - Based on theory and analysis of the current situation and causes, the thesis proposes a number of solutions to expand Consumer loans activities at SACOMBANK – DONG HOI BRANCH Subject and Scope of Research - Subject of study: Consumer loans activities at SACOMBANK – DONG HOI BRANCH - Research scope: Space: SACOMBANK – DONG HOI BRANCH Transaction Office from 2017-2019 Research methods - Qualitative method: recording opinions, collecting data, comments from credit officers, transaction leaders - Quantitative method: analyzing and synthesizing data on Consumer loans activities at SACOMBANK – DONG HOI BRANCH Study overview In addition to the introduction and conclusion, the thesis is structured with chapters as follows: Chapter 1: Theoretical basis for Consumer loans activities of commercial banks Chapter 2: Current situation of Consumer loans at SACOMBANK – DONG HOI BRANCH Chapter 3: Solutions to expand Consumer loans activities at SACOMBANK – DONG HOI BRANCH CHAPTER A THEORETICAL BASIS FOR CONSUMER LOANS ACTIVITIES OF COMMERCIAL BANKS 1.1 THEORETICAL BASIS FOR LOANS ACTIVITIES AT THE COMMERCIAL BANK 1.1.1 Concept loans Pursuant to circular 39 / 2016 / TT- NHNN dated December 30, 2016 : “ Loans is the form of granting credit, whereby credit institutions deliver or commit to customers a sum of money to use the purpose of determining in a given time as agreed upon with the principle of repaying both principals and interests 1.1.2 Loans principle - Principle of purpose loans Loans capital must be used in accordance with the agreed purpose in the contract, a credit as provided by the outside party must be a legitimate credit to the purpose of clear and clear evidence, because it is not only a matter of law but it is also a matter of risk This principle ensures that the bank has the basis to assess the loans request, consider the feasibility and solvency of the customer - Redemption principle Loans must be repaid both principals and interests at the time of the credit contracts, the principles for ensuring the banks exist and the develop, the capital sources of the main bank are the source of the mobilization and punctuality of the credit For borrowers, they have to calculate and have responsibilities with loans - Principle of guarantee The guarantee of loans must comply with the government's regulations Usually, the bank base is based on the credit level of borrowing customers and the nature of the loans for the borrowing customers to borrow capital or non - assets, which is the final repayment of the customers in case the bank does not collect debts, such a bank shall be subject to the active debt withdrawal 1.1.3 Loans classification 1.1.3.1 Classified classification time - Short - term loans: a loans of 12 months or less The short - term loans bank aims to finance the enterprise' s working capital needs, the government' s short term expenditure needs and consumer demand - Medium loans are loans for a year to five years This credit is often used to invest in innovation, upgrading technical infrastructure, technology or expansion - Long - term loans Is a loans over five years These are used to invest in fixed capital of the enterprise, capital construction, real estate and Consumer loans in the housing and transport needs 1.1.3.2 Loans classification - Production loans: it is the type of loans that customers use to produce products Loans for agricultural production include agricultural, industrial, forestry, and fishery loans - For circulation credit: the type of loans used by the customer for the business of goods and services to provide loans for commercial traffic include commercial loans (purchase of goods sold in domestic goods, export-import business); providing business services - Consumer loans: it is the type of loans that customers use to serve the needs of personal living 1.1.3.3 Asset classification - Loans guarantee with property: this is the type of loans that customers have to have the mortgaged property, pledge, or guarantee of the third party as guaranteed - Loans guarantee is not equal to assets: this type of credit is often granted to prestigious customers, often customers who are often profitable, strong financial situation, a strong situation, or relatively small loans from the borrower's capital 1.1.3.4 Classification by return nature -  Direct refunding of the loan: the type of lender in which the principal borrower is the person who pays directly to the bank -   Indirect refunding loan: it is the type of loan in which borrowers are not the debtors, this type of lending is usually made by discounting notes and valuable papers remaining valid or fulfilling the payment obligation 1.1.3.5 Classification by refund method -  Reimbursement of installment loans: the borrowed capital shall be paid in installments when the principal is fully paid and the interest under credit contracts is concluded -  Reimbursement for lump-sum loan: borrowed capital and interest paid once upon maturity -  Reimbursement for reimbursement at request: borrowed capital at the request of lender or borrower 1.1.3.6 Classification by lending method -  Loans under the course: the method for lending each customer and the bank must carry out the necessary credit procedures Lending is also called a loan for each time when there is a demand for customer capital as a dossier of application for a loan for a specific use purpose -  Lending due to credit limit: is the type of loan that the enterprise only needs to apply for first time, then on the basis of the contract, the enterprise shall make a loan plan and repay the debt to the bank To apply to enterprises with additional capital needs, regular and fast capital rotation The bank determines the credit limit, and opens it for an account for a loan to monitor borrowing and repayment Other lending methods such as advance lending, overdraft, financial lending, sponsorship and other lending types 1.1.4 The role of commercial bank • Having an important role in stimulating demand, contributing to promoting economic growth Consumer loans is seen as a lever to stimulate demand For a commodity production, the development of Consumer loans means an increase in demand or purchasing power of the population, creating more excitement in the commodity consumption market, thereby stimulating products development, creating favorable conditions for economic development