CURRENT SITUATION OF CONSUMER LOANS AT KIEN LONGCOMMERCIAL JOINT STOCK BANK - DA NANG BRANCH...232.1.. ORIENTATION OF THE BANK''''S CONSUMER LENDING ACTIVITIES...46 Trang 3 Table 2.1: Sale
TABLE OF CONTENS PREAMBLE 1 CHAPTER 1 OVERVIEW OF CONSUMER LOANS'S THEORY BASIC .5 COMMERCIAL BANK 5 1.1 CONSUMER LOANS OVERVIEW .5 1.1.1 Concept of Consumer Loans 5 1.1.2 The basic feature of a consumer loan .6 1.1.3 Types of consumer loans 8 1.1.4 Consumer loan process 11 1.1.5 The benefits of consumer lending 14 1.2 CRITERIA TO EVALUATE CONSUMER LENDING ACTIVITIES .15 1.2.1 Loan sales: .15 1.2.2 Debt collection: 16 1.2.3 Odd debt: 16 1.2.4 Bad debt 16 1.3 FACTORS AFFECTING CONSUMER LENDING .17 1.3.1 The objective factors .17 1.3.2 Subjective factors 19 1.4 EXPERIENCE OF CONSUMER LENDING OF COMMERCIAL BANKS IN SOME COUNTRIES AROUND THE WORLD AND LESSONS FOR COMMERCIAL BANKS IN VIETNAM .20 1.4.1 Consumer lending experience in some countries A, Consumer loan activity in .20 1.4.2 Lessons learned from commercial banks in Vietnam .22 CHAPTER 2 CURRENT SITUATION OF CONSUMER LOANS AT KIEN LONG COMMERCIAL JOINT STOCK BANK - DA NANG BRANCH .23 2.1 OVERVIEW OF KIEN LONG COMMERCIAL JOINT STOCK BANK - DA NANG BRANCH 23 2.1.1 Introduction about Kien Long Commercial Joint Stock Bank - Da Nang Branch 23 2.1.2 Organizational Structure…………………………………………………………….24 2.1.3 Functions and duties of departments 25 2.2 CURRENT SITUATION OF CONSUMER LOANS AT KIEN LONG BANK, DA NANG BRANCH .26 2.2.1 The situation of consumer loans at KienLongBank-Da Nang Branch 26 2.2.2 Consumer loan credit process at Kien Long Bank - Da Nang Branch 38 2.3 EVALUATION OF CONSUMER LENDING ACTIVITIES AT KIEN LONG BANK - DA NANG BRANCH 40 2.3.1 Achievements of NH Kien Long - Da Nang Branch 40 2.3.2 Shortcomings in consumer lending at NH Kien Long - Da Nang Branch 41 2.4.3 Competitiveness in consumer lending at Kien Long Bank - Da Nang Branch .43 CHAPTER 3 SOLUTIONS AND RECOMMENDATIONS FOR ENHANCING OPERATION FOR CONSUMER OPERATION AT KIEN LONG COMMERCIAL BANK - DA NANG BRANCH 46 3.1 ORIENTATION OF THE BANK'S CONSUMER LENDING ACTIVITIES 46 3.2 SOLUTIONS TO EXPAND CONSUMER LENDING ACTIVITIES AT BANKS 46 3.2.1 Capital source solutions 46 3.2.2 Service solution .47 3.2.3 Solutions to conditions and process of credit credit ……………………………… 50 3.2.4 Marketing solutions 52 3.2.5 Technology solutions 55 3.2.6 Human solution .56 3.3 SOME RECOMMENDATIONS 58 CONCLUDE 60 LIST OF REFERENCES 61 DISCLAIMER 62 LIST OF TABLES Table 2.1: Sales of consumer loans by term .28 Table 2.3: Outstanding loans for consumption by purpose 33 Table 2.4: Overdue debts in consumer loans 34 Table 2.5: Ratio of consumer loans to capital sources .36 Table 2.6: Share of consumer loans in total outstanding loans 37 Table 2.7: Debt recovery coefficient for consumer loans 38 Table 2.8: Share of profit from consumer loans .39 Diagram 1.1: Direct consumer loan 8 Diagram 1.2: Indirect consumption loan 9 Diagram 2.1: The organizational structure of Kien Long Commercial Joint Stock Bank - Da Nang Branch 25 Cl LIST OF ABBREVIATIONS Bank Officer Consumer loans Employees Bank SB Officer SC Employees WTO State bank ASEAN Stock Commercial World Trade Organization APEC Association of South East Asian CL Nations Collateral Asia-Pacific Economic GM Cooperation Contact labor Collateral General manager 1 PREAMBLE 1.1 The reason to choose the topic: The speed of globalization and trade liberalization in recent years has created many major changes in the international economic environment In that condition, Vietnam's economy is integrated with the world economy through its accession to major economic organizations: Association of Southeast Asian Nations (ASEAN), free trade area ASEAN (AFTA), Asia-Europe Economic Cooperation (ASEM), Asia-Pacific Economic Cooperation (APEC), WTO (World Trade Organization), Economic Partnership Agreement Trans-Pacific (TPP) In this dynamic and competitive economy, effective exploitation and use of capital sources for socio- economic development has always been one of the most important issues in economic strategy and policy economy of each country As a financial intermediary, an important capital channel for the entire economy, in order to be able to stand firmly in the financial and financial market, commercial banks need to constantly improve themselves the rules of general development In the trend of regional and international integration, each locality as well as the whole economy needs to exploit and use effectively domestic capital through lending activities of commercial banks to promote economic and social development, industrialization and modernization of the country Therefore, the need to expand lending activities is inevitable in the current period Along with the development of society, human consumption demand is also increasing and finance becomes a very important issue to finance those needs If only lending a lot of production but cannot be sold because people do not have the need to buy such goods or have a need but cannot pay, it will inevitably lead to oversupply, inventory warehouse and capital stagnation From that fact shows that, when the society develops, not only companies and enterprises are objects that need capital to do business and expand markets, but now individuals are also the people need capital and consumer lending activities are born to meet human consumption needs Consumer lending on the one hand creates more income for the bank itself, on the other hand helps individuals get capital to improve their lives, 2 contribute to socio-economic development, and promote the implementation of stimulus policies Government demand, creating jobs, helping workers to have higher incomes and improved social life In the context of economic transformation, the banking sector, with its position in the economy, has played a very important role in promoting that process The social economy is developing day by day, human living standards are on the rise, the demand for consumer loans is also growing In recent years, consumer lending has played an important role in banking services, and consumer lending has contributed a large part of profit in the bank's lending activities Consumers with an increasingly stable and improved income, along with a high level of education and living standards, promises to promote the development of consumer lending Recognizing the importance of consumer lending activities in the social life in general and for the whole banking system in particular, why do some internship at Kien Long Commercial Joint Stock Bank - Da Nang Branch, conclude In accordance with the knowledge in the learning process, I have chosen "Research on expanding consumer lending activities at Kien Long Commercial Joint Stock Bank - Da Nang Branch for the period 2017-2019" as my research topic 1.2 Research purposes The research purpose of the topic is on the basis of analyzing and pointing out emerging problems that need to be solved in the consumer lending sector at Kien Long Commercial Joint Stock Bank - Da Nang Branch, the topic proposes the solutions to help Kien Long Commercial Joint Stock Bank - Da Nang Branch to expand consumer lending services, contribute to the development of banks as well as improve the competitiveness of Kien Long Commercial Joint Stock Bank - Da Nang branch in the next period 1.3 Research objectives - Clarify theoretical bases for consumer lending at commercial banks - Analyzing the development of consumer loans at Kien Long Commercial Joint Stock Bank - Da Nang Branch, especially assessing the results and limitations of consumer lending activities at this bank 3 - Proposing a number of solutions and recommendations to improve the efficiency of consumer loans at Kien Long Commercial Joint Stock Bank - Da Nang Branch in the coming years 1.4 Research Methods The research method used is mainly the method of information collection and analysis method Information collected through many channels such as direct internships at branches, interviews with the bank's employees, annual financial reports, credit reports Analytical methods used These information, combined with the method of comparing, comparing and synthesizing information, then made comments on the situation of consumer loans at Kien Long Commercial Joint Stock Bank - Da Nang Branch 1.5 Research hypothesis Hypothesis Chapter 1: Consumer lending activities of Kien Long Commercial Joint Stock Bank - Da Nang Branch Chapter 2: Influence of consumer lending activities Kien Long Commercial Joint Stock Bank Da Nang Branch 1.6 Research question - What are the contents of consumer lending activities and evaluation criteria for consumer lending activities? - What is the current situation of consumer loans of Kien Long Commercial Joint Stock Bank - Da Nang Branch? - What are solutions to expand consumer lending activities, Kien Long Commercial Joint Stock Bank - Da Nang Branch? 1.7 Scope of research - About space: Kien Long Commercial Joint Stock Bank - Da Nang Branch - About time: From 2017 to 2019 - The course focuses on in-depth research on the consumer lending situation at Kien Long Commercial Joint Stock Bank - Da Nang Branch to know the successes as well as the unsolved shortcomings of the bank in this activity From there give ideas and solutions to overcome and develop it in a more effective way 4 1.8 Study overview Literature review Primary data source: Primary data is data that a market researcher collects directly at the data source and processes it for his / her research Primary documents used include: annual reports, financial statements, reports of general planning department, accounting department of Kien Long Commercial Joint Stock Bank - Da Nang Branch Secondary data source: Secondary data is derived from primary documents analyzed, explained, and discussed as the source of data collected and processed for a certain purpose, by researchers re-use market for your research Secondary data of the thesis are taken as scientific researches related to consumer lending activities such as doctoral dissertations, dissertations, articles, scientific reports such as: Master Thesis " Analysis of the consumer lending situation at Phuong Dong Commercial Bank, Trung Viet Branch, Da Nang City ”, author Le Ho Tuyet Minh, 2011; Master Thesis "Solutions to promote consumer lending activities at Vietnam Joint Stock Commercial Bank for Industry and Trade, Da Nang branch, author Le Thi Hong Anh, 2011; Master thesis "Development of consumer loans at the Joint Stock Commercial Bank for Foreign Trade of Vietnam", author Le Minh Son, 2009; Master thesis "Consumer lending development at the Saigon Hanoi Branch of Da Nang," by Dinh Thi My Le, 2013 1.9 Structure of the thesis In addition to the introduction and conclusion, the main content of the topic is divided into 3 chapters as follows: Chapter 1: Overview of the rationale of consumer loans of commercial banks Chapter 2: Current situation of consumer lending activities at Kien Long Commercial Joint Stock Bank - Da Nang Branch Chapter 3: Solutions and recommendations to improve operations for consumption at Kien Long Commercial Joint Stock Bank - Da Nang Branch 5 CHAPTER 1 OVERVIEW OF CONSUMER LOANS'S THEORY BASIC COMMERCIAL BANK 1.1 CONSUMER LOANS OVERVIEW 1.1.1 Concept of Consumer Loans While the market economy is developing day by day with a variety of models and types of goods, consumer loans have been started by retailers due to the need to promote consumption of goods Some firms have to borrow from banks to compensate for the shortage of working capital First, in terms of the basis to conduct consumer loans, we are based on 2 dimensions: - From a consumer perspective, the demand for consumer loans is increasing strongly, associated with the expanding demand for durable goods (houses, vehicles, furniture or tourism calendar) At the same time, consumers have a stable income to repay bank loans When the income level reaches a fair or high level, consumers tend to want to improve their standard of living (consuming good quality products, good food, good clothes, a fully equipped and modern life ) or increase the ability to train yourself to help you find more jobs with higher income than now - From a banking perspective, many businesses and organizations finance themselves mainly by issuing shares and bonds, many financial companies compete with banks in lending as market share for their businesses goods down This has forced banks to expand the consumer lending market to increase income Thus, people have introduced a specific concept of consumer lending activities: Consumer lending is a form of financing for individual household spending purposes Consumer loans are an important source of funding for consumers to meet the needs of life: housing, transportation, living facilities, study, travel before they have enough financial ability to enjoy