INCREASE THE EFFICIENCY OF LENDING ACTIVITIES FOR INDIVIDUAL CUSTOMERS AT TECHCOMBANK KEANGNAM

DAO MINH NGOC NATIONAL ECONOMICS UNIVERSITY CENTRE FOR ADVANCED EDUCATIONAL PROGRAMS BACHELOR’S THESIS Major: Finance FINANCE Topic INCREASE THE EFFICIENCY OF LENDING ACTIVITIES FOR INDIVIDUAL CUSTOMERS AT TECHCOMBANK KEANGNAM DAO MINH NGOC 2012 - 2016 HANOI, 2016 NATIONAL ECONOMICS UNIVERSITY CENTRE FOR ADVANCED EDUCATIONAL PROGRAMS BACHELOR’S THESIS Topic INCREASE THE EFFICIENCY OF LENDING ACTIVITIES FOR INDIVIDUAL CUSTOMERS AT TECHCOMBANK KEANGNAM Student Major Class Student’s ID Supervisor : DAO MINH NGOC : Finance : Advanced Finance 54B : 11122808 : TRAN DANG KHAM, PHD HANOI, 2016 ACKNOWLEDGEMENTS I would like to show my gratefulness to all people that have supported willingly to accomplish the thesis First of all, I would like to express my sincere gratitude to PhD Tran Dang Kham, my research supervisor, who has given so much instruction, suggestions and encouragement that did help me to complete this thesis Futhermore, I am highly appreciated Mr Hoang Binh Minh and all staff at Techcombank Keangnam branch for their guidance as well as for providing necessary information regarding to the report Lastly, my thanks and appreciation go to all coordinators and lecturers of Center for Advanced Educational Programs in giving senior students an internship opportunity to acquire practical experience and utilize theoretical knowledge Thank you, Dao Minh Ngoc CONTENTS STATUTORY DECLARATION I herewith formally declare that I myself have written the submitted Barchelor’sThesis independently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper Hanoi, 19/05/2016 Signature ABBREVIATION RBO: Retail Banking Officer ASO: After sale officier TCB: Techcombank LIST OF TABLE LIST OF DIAGRAMS INTRODUCTION RATIONALE Recently, from the reality that when society is growing, not only companies, businesses need capital to expand production and business markets but also individuals have the demand for loans and using even more capital Additionally, intergration and moderniazaion have brought about higher living standards, which means that many other demands need to be met Moreover, nowadays individual customer have been used to the thinking about borrowing money to satisfy their demand for goods prior to solvency In order to meet this demand, Techcombank in general and the branch Keangnam in particular have expanded to provide funds for individual customer needs, which also helps society solve capital shortage temporarily and make the production process continuous to advance quality of life Besides, banks also have an interest-earning account thanks to this activity to enable the bank to survive and develop Loans to individual customers not only brings income to the bank, but also helps the bank diversify risks After a period of internship at Techcombank Keangnam branch in position as a retail banking officer (RBO) and studying the data on the situation of bank lending activity, it is indicated that lending to individual customers has become one of the basic credit operations contributing to the bank's revenues However, the results are less worthy than what it can be achieved Lending activities for individual customer loans at the branch still have some difficulties Although the amount of individual loan is going up, its growth rate is not high Moreover, most of them were gained due to the product that is loan for house thanks to the cooporation with Vingroup on Gardenia project in 2015, which raises a challenge for the branch to not only maintain but also improve the result in the following year Addtionally, the amount of overdue debts accounted for more than 2%, which is still a high rate In order to resolve these problems as well as develop results, the banks need time to study and offer solutions to overcome the existing backlog This is why I choose the theme "Increasing the efficiency of lending activities for individual customer at Keangnam Techcombank branch" to my graduation thesis RESEARCH OBJECTIVES • Overview of Techcombank and Keangnam branch • Analysis of the current situation of lending operations in general and lending to individual customers at Techcombank Keangnam • Propose some solutions and recommendations contributing to expand the efficiency of lending activities for individual customers SCOPE OF RESEARCH • Research subject: The problem of personal customer loans • Scope of the study : Focus on lending individual customers activities at Techcombank Keangnam from 2013 to 2015 RESEARCH METHOD The thesis has used a combination of several different methods such as the method of dialectical materialism, statistical methods, comparision, evaluation, analyze the information and data related to financial services serving individual customers at the branch RESEARCH STRUCTURE The research consists of main parts: Chapter 1: THEORITICAL BACKGROUND Chapter 2: RESULTS/ ANALYSYS OF DATA Chapter 3: DISCUSSION AND FINDINGS Chapter 4: RECOMMENDATIONS 10 Keangnam implementing the business objectives and the implementation of the State policy of raising capital for developing social economy Despite the fact is that our country's economy is recovering, some factors such as inflation, interest rates, exchange rates, the volatility of the stock market could be trouble any time, which adversely affect banking activities Second, most Vietnamese businesses remain habits of paying in cash, very few businesses pay employees through the bank account This is a huge drawback to develop products for consumption having loan repayment sourcing from salaries Additionally, many Vietnamese think about borrowing from their family member first, then thinking of the bank loan because of its cumbersome procedures and the need of collateral Third, the legal environment is quite inadequate The management capabilities of local government in Vietnam is still weak Although each individual has his permanent residence at a certain address, he is not directly managed by any unit when migrating to Hanoi to make a living This has caused a lot of trouble for this object Besides, the speed of the progress providing certificate of house ownership and residential land in Hanoi is still slow Meanwhile, the development of retail banking services in general and diversification, development of loan products for individual customers in particular requires the application of new technologies and quick business processe As a result, many legal provisions prove to be inadequate, which makes it difficult for banks in developing new products In addition, the macroeconomic policy of the state is in the process of adjustment, complete renovation Therefore, rapid change, unpredictable adjustments cause the operation of commercial banks to be dominated and influenced Fourth, the cause from customers Customers who have qualified and healthy financial performance usually demand very high service quality Thus , loan officers that have no experience evaluation and coordination between divisions is not good will easy make these customers angry and have negative reactions Meanwhile, there are many customers that not understand the procedures suppose that loan procedures are very complex The final factor is the competition from other banks It is supposed that the potential of individual customer lending sector is so great that the state-owned banks, joint stock, branches of foreign banks have focused on that goal The competition is fierce Specifically, foreign banks like HSBC, ANZ have many advantages over our banks such as their strong capital, financial resources and management Thus, competitive pressure is increasing with domestic banks Moreover, the trend of the current equitisation, joint stock commercial banks' series were born and worked very dynamic They always try to provide enough products to meet market needs such as ACB , Sacombank , VP Bank CHAPTER RECOMMENDATIONS AND CONCLUSION 5.1 Solution base The assessment of the efficiency of lending activities for individual customers and also the obstacles that the branch is facing are the two main factors, which need to be considered in order to find out the suitable solutions to improve the efficiency of lending to private clients at Techchbank Keangnam 5.2 Orientation to increase efficiency of lending activities for individual customers of Techcombank Keangnam 5.2.1 Development orientation On the basis of the general business direction of Techcombank, branch Keangnam strategy outlined in 2016: In addition to keeping current customers, the branch will continue to approach new customers with new and modern style of service Focusing on small and medium customers, product development and individuals customer service, which is a huge and potential market It is also necessary to concentrate on supply products, banking services, thereby improving service revenue, increasing proportion of the income structure for Techcombank Keangnam in order to become an outstanding branch with modern standards - Expand individual lending coupled with loan quality assurance, development within the control and management of loans - Expansion of product portfolio for personal customers, improve the quality of products and services , best serve the needs of customers - Ensure the compatibility of the customer, safety and efficiency , and also implement laws , regulations and rules related 5.2.2 Perspective on increasing efficiency of lending activities for individuals To develop activities for individual customer loan volumes in the coming years, the branch Techcombank Keangnam has taken the following directions : • Eligible customers Branch constantly expands customer relationships In addition to the old customers, it is necessary to approach new potential customers especially large companies with multiple numbers of workers, which will be the a large source of potential customers for individual customer loan volumes • Product diversification Due to the development of needs and the country's integration, the demand of consumers is getting diverisified Thus, in the field of consumer loans in particular and personal customer loan volumes in general, there will be many new products provided to serve most people's needs, which leads to competition among banks intensively Therefore, the diversification of loan products is now a factor which the joint-stock commercial banks pay much attention to Realizing this fact, Techcombank Keangnam have been continously researching and gradually developing new products • Improving the quality of products With the business slogan " Steady , reliable " always been the motto of the branch Put quality on top, especially the quality of products for auto loans and real estate projects as these are strategic products of Techcombank Keangnam in the coming period 5.2.3 Solution to increase efficiency of lending activities for individuals 5.2.3.1 Improving and developing products and services for individual customer loans Improving and developing product is one of the basic content and very important in the strategy of banking products A product is considered to be effective if it ensures diversity in order to meet customers's demand, competitiveness and profitability Some ideas amendments for certain types of products • Auto loans With this product, the bank immediately need to build relationships with vehicle manufacturers or dealers and carmakers Besides, it can lend money to the main salon, the car maker, or it can lend to major customers wishing to buy a car from this company, which will make for an all-inclusive product The cooperation with the car manufacturers would help banks have more information about the origin of the car, suppliers of business car market, current consumer trends In addition, the successful business cooperation, the major car makers will be introduced to customers with installment loan products of banks, thereby, help to expand bank's products However, a disadvantage for the subsidiary is that the establishment of this relationship may have been made earlier by the rivals in the market As a result, the branch needs to be more active, skilful to attract customers, and also quickly sign contracts with the automobile salon in the locality • Home project, housing loans: Another advantage worth mentioning in Hanoi during this period is coming up a lot of condominium projects, so developing the product lending money to buy apartments, houses is very favourable To develop this product, affiliates need to create and sign the cooperation agreement with the investor With the purpose of searching large customers, not looking for retail clients, banks need to build good relationships with investors, especially ones that are building prestigious apartments Thanks to this collaboration, it will help affiliates evaluate and assess the capacity construction because this is collateral to the bank later When customers come to the construction unit, they will be introduced to the product's mortgage subsidiary On the other hand, they will cooperate with the bank when the bank handed over documents requested by the customer after the apartments built for banks (basic elements to guarantee loans ) To make this stage complete, it is necessary to have the cooperation and support of individual customers on the block headquarters • Lending through the operation of credit card issuance It should be combined with the credit card issuance department to enhance functionality this product It contains many risks for banks with small loan amount, costly expenses in reviewing, evaluating loans, checking use of capital and debt collection To address these difficulties, lending through representatives will overcome the weak point This solutions is good for both banks and customers: loan procedure does not take much time, reduce difficulties in obtaining confirmation of the unit's leader In order to improve this product, the branch should focus on developing card services + Increasing the efficiency and capacity of ATM system to provide cheaper types It should also develop card acceptance network and strengthen the links between banks in the province to improve efficiency and expand possibilities for using ATMs Using T24 automatically track customer information and accounts, interest and monitor periodic fluctuations to ensure accuracy and highest safety + Expanding agent distribution channels as payment agents, ATM card issuance agents + Serve customers using credit cards well because they will introduce new customers to the bank and also help the bank increase its prestige 5.2.3.2 Strengthening actively searching and selecting individual customer loans Like many other commercial banks in Vietnam, the way how Techcombank Keangnam supplies customers is still passive, and traditional The branch is waiting for customers to find it As a result, the branch must be more active in finding customers, improving the situation that customers not know about its products and services, which will also help Techcombank Keangnam select appropriate clients Techcombank Keangnam's development should be seeking large customers, expanding small customers, actively associating with many companies related to its products and services to provide banking services more efficiently, which not only ensures that customers have good credit capacity but also have willingness to build long-term relationship with the branch Techcombank Keangnam should ensure the development of new customers with a carefully selected method Firmly hold or politely refuse new customers if their background, qualifications and apparatus are not sufficient to ensure good customer service and risk control However, it should avoid focusing so much on the development of new customers that results in negatively affecting the interest and quality of service of its existing customers Hence, it is necessary to maintain frequently visiting customers (flexible forms: phone, meet, visit production facilities business customers ) thereby learn the satisfaction of customers or any access to service providers, customer service; introducing new banking products that can suit the needs of customers Moreover, the branch should actively monitor and evaluate the fluctuations in the existing customers's system to find out the cause of the number of old customers changing, then find out measures to maintain existing customer systems 5.2.3.3 Stepping up marketing activites There are many credit institutions operating in the area, as a result the competition among banks is very stiff, so Techomcombank Keangnam needs to have marketing activities that must be subsidiary concerned and further developed It should enhance and promote advertisement on the services and loan products for individual customers + Improving the quality of ads, brochures, use of mass media to disseminate Requirements for the information is easy to understand + Step up propagandizing and promoting the image of the branch as a favorable and safe location to customers when operating transaction It should also cared about sponsoring cultural activities - entertainment - sports, perform scholarships for students, university students in the province + Build and maintain good relationships between affiliate and customers For customers who have first transaction, affiliate needs to create understanding between the customer and the branch or banking officers should actively explore, guide and help clients implement procedures and answers questions in order to help customers feel convenience and comfortable For traditional customers , the branch may have preferred interest rates, implementation of after-sales activities such as: gifts, greeting the Lunar New Year holidays 5.2.3.4 Improve processes, shorten transaction time Improving the lending procedures needs to ensure some of the following criteria: −Give customers the most convenient and comfortable feeling during the intercourse −Reduce the administrative procedure that is unnecessarily cumbersome −Support and help customers during transactions −Pay attention to the issue of maximizing customer satisfaction − The improvement should proceed gradually to avoid loosing risk control, not achieving sustainable objectives outlined 5.2.3.5 Reinforcing the inspection and supervision over the use of funds Techcombank Keangnam needs to pay more attention to the inspection and supervision of the way customer using loans to ensure that bank capital funding was invested properly and not contrary to the provisions of law, thereby improving the efficiency of capital investment Credit officers must actively supervise production and business processes of customers, regularly update customer information such as production and business situation, monitor the market fluctuations in output and input of the collateral If they see signs of decline in the value of collateral, bank needs to implement additional measures to ensure compliance with regulations of the State Bank and superiors at the current time 5.2.3.6 Improving and developing the efficiency of human resource management Banking officials is one of three elements providing banking products and services They directly guide and implement business processes As a result, banking offcials not only have a decisive role in terms of quantity and quality of products and services supplied, but also build the image of the branch in the customer's mind, which are factors that create, maintain and develop relationships with customers groin Therefore, branch must be aware of the important role of business staff , consider them as the first visitors, internal customers and factors that make the development of the bank Improve efficiency and strategic development of human resources management in the following direction: • Develop recruitment culture Recruiting culture is said to represent the style of manager This is one of the ways that affiliate leaves a good first impression in the hearts of candidates, build confidence and pave the way for cooperation, long-term commitment to the bank This is the first opportunity to communicate between the managers, leaders and the future owners of the branch • Develop a professional and efficient recruitment process Recruitment process needs to meet the purpose which is to discover the real capacity of candidates Then, Techcombank Keangnam can not only select talented staffs, but also those who are suited to the characteristics of the branch Recruitment should be done on a large scale, can be linked to universities in economics, finance, banking, or organize students internships and recruit students who are eligible to meet the requirements of the job in practice this period In the recruitment process should develop specific criteria for candidates such as qualifications, communication skills, awareness, behavior, attitudes toward learning, work to ensure employee compliance with the requirements of the job • To improve the level of specializaion of banking officials Business officers must have the depth of the credit business, understand the nature of each mode of lending, interest rates, and the factors affecting the lending decision, from which to take the decision in the form of loans and loan interest rates to suit each customer To improve quality, qualified personnel business, banks should: • To accelerate the movement, training and raise the level of business officials in particular and the entire branch staff in general Create a professional working environment, with more opportunities to learn Employees of banks, especially the office staffs have little opportunity to learn, especially from the leading experts or foreign experts These courses offer mainly very general credit policy of the banks, evaluation of assets Otherwise, knowledge about communication skills, working style are paid less attention Techcombank Keangnam should develop a curriculum that is more practical with the participation of reputable experts 5.2.3.7 Modernizing infrastructure and banking technology Modernize equipment and facilities is required for the branch This not only helps branch staff to work efficiently, to fulfill their capabilities, but also make a good impression on customers Time procedures or transactions between banks and customers will be faster, more simple These elements of infrastructure will affect the psychology of the customer in terms of size and position of the branch Lending individual customers has feature that is the number of borrowers is huge but loan sizes is small, thus adopting modern technology will help increase productivity, save time Banking officers can also tackle and handle multiple tasks in a day, serve the needs of customers more quickly, thereby bringing prestige to the branch These programs collecting, analyzing and processing information, tracking software, managing the process of debt collection are applied will contribute to reduce the time and pressure Specifically, the program that reports debts automatically to customers with low creditworthiness will enhance their duty to repay and loan officers will not have to take much time on this stage To raise the rationality of the policy of reward and punishment to stimulate employees It is the fact that bonuses, salary is only one factor, not all elements for a staff to stay long term with the branch To enhance information exchange and experience sharing between the officials in the same department and in the entire system through the talks,meeting The branch should also strengthen propaganda and education to all employees to understand the role of the customer They are working directly for the client, not the director As a result, the branch leaders should also request all staff in general and banking offcials in particular to work and act under the motto "always thinking and doing what is best for our customers." 5.3 Recommendation 5.3.1 For Central Bank First, the central bank needs to continue to innovate mechanism of interest rate to be suitable with monetary policy objectives, supply and demand monetary and real terms Moreover, the central bank should apply mechanism of rate governance to avoid interest rate risk and interest rate difference between output and input, to ensure that the banks can afford to offset the cost, risk and have profitability to sustainably develop Second, a complete system of legal documents will create the necessary foundations for lending individual customers block to grow In the coming time, the central bank should enact a system of specific guidelines on the type of product services for individual customer loan volume, and also issued documents to support, encourage lending volumes for individual customers, creating a legal framework and adequate ventilation in order to protect the interests of the banks to develop this activity Third, the central bank should make it possible for banks more autonomy and responsibility in business Besides, the central bank should also further support for banks in organizing the seminar courses, exchange of experience in general banking and lending volumes in particular individual customers 5.3.2 For the authority First, the government needs to invest in developing the industrial production of consumer goods to serve people's lives Since that would contribute significantly to the increase in supply of goods - consumer services, to meet the needs of the public Second, the Government should study to make the law and relevant decrees on fiscal policies for housing, in line with current economic conditions and warming solutions for real estate market 5.3.3 For the branch - Techcombank Keangnam Recently, auto loan is supposed to be the product for individual customer loan that the branch mostly focuses on In my opinion, there should be some changes - The branch should pay more attention to enhancing the relationship between the branch and the owners of auto showrooms, introducing to them how professional and trusty it is - Due to the increasing interest rate, it is extremely necessary for the branch to perform perfectly to satisfy its customers Compared to other banks, interest rate for auto loans at Techcombank is quite higher, which again reminds the staff of working professionally in order to get the best perspective from customers It is one way to compete with other rivals - RBOs (retail banking officials) at the branch are new and young so they should have more opportunities to attend training classess to have better skills - Some tasks of ASOs (after sale official) should be shared with RBOs The branch has only one ASO who mainly has responsibility for reporting to customers about their loan and also doing some small parts but taking much time However, the number of customers is really huge and there are also many small which seems to be overloading - Approaching new showrooms with more expensive car brands in order to raise the individual loan amount quickly CONCLUSION In the process of renovation, modernization and integration, commercial banking system is facing a huge challenget that is to reform and improve competitiveness However, outstanding debts greatly affect the ability of competition and growth of the bank Thus , improving the efficiency of credit is no longer separated concern from any bank, that is a common concern of the banking system Each bank has its own way to handle efficiently to ensure competitive dynamics in the bank system According the analysis of the current situation of lending to personal customers, providing solutions that improve the efficiency of customer personal loans is considered to be credit trend of most commercial banks in order to help stablize finance and secure banks in the current period In addition, commercial banks have many prestigious customers, which facilitates diversification of products and banking services as well as the requirements for quality and convenience According to the analysis of the thesis "Increasing the efficiency of lending activities for individual customers at Techcombank Keangnam", there are some problems that the branch are facing, which needs to be solved The thesis suggests some recommendations as the following: - Amendment for certain lending products - Strengthening actively searching and selecting individual customer loans - Improve processes, shorten transaction time - Reinforcing the inspection and supervision over the use of funds - Stepping up marketing activites - Modernizing infrastructure and banking technology - Improving and developing the efficiency of human resource management Additionally, there are some recommendation for the central bank, the authority and the branch, which are: For Central Bank First, the central bank needs to continue to innovate mechanism of interest rate to be suitable with monetary policy objectives, supply and demand monetary and real terms Moreover, the central bank should apply mechanism of rate governance to avoid interest rate risk and interest rate difference between output and input, to ensure that the banks can afford to offset the cost, risk and have profitability to sustainably develop Second, a complete system of legal documents will create the necessary foundations for lending individual customers block to grow In the coming time, the central bank should enact a system of specific guidelines on the type of product services for individual customer loan volume, and also issued documents to support, encourage lending volumes for individual customers, creating a legal framework and adequate ventilation in order to protect the interests of the banks to develop this activity Third, the central bank should make it possible for banks more autonomy and responsibility in business Besides, the central bank should also further support for banks in organizing the seminar courses, exchange of experience in general banking and lending volumes in particular individual customers For the authority First, the government needs to invest in developing the industrial production of consumer goods to serve people's lives Since that would contribute significantly to the increase in supply of goods - consumer services, to meet the needs of the public Second, the Government should study to make the law and relevant decrees on fiscal policies for housing, in line with current economic conditions and warming solutions for real estate market For the branch First, introducing and improving the image of Techcombank Keangnam to customers, especially owners of auto showrooms Second, training RBOs professionally to work in order to compete with other banks, especially foreign banks which has many advantages over the branch Third, there should be suitable task division between RBOs and ASOs so as to manage loans effectively Fourth, approaching more new showrooms with higher-end car brands to raise the loan amount quicker REFERENCES - Techcombank Keangnam's financial statements from 2013 to 2015 - Website: www.investopedia.com/terms/c/commercialbank.asp www.economicsdiscussion.net/banks/commercial-bank-de [...]... many risks when the borrower is unemployed, goes bankrupt 2.3.2 Assessment of the efficiency of lending to individual customers 2.3.2.1 Definition Efficiency of lending to individual clients is one of the manifestations of economic efficiency It reflects the quality of the lending activities of banks Moreover, it is lending capacity that is suitable with developing requirements of the economic and... percentage individual loans account for in the lending activities of banks Higher index demonstrates that individual lending activities plays an increasingly important role in the business operations of the bank 21 d The ratio of overdue debts(%) Overdue debts The ratio of overdue debts( % ) = - x 100 Total loan amount This indicator shows the situation of overdue debts at the bank... allows customers to choose payments which they say is the most effective and safe This helps to increase the speed of circulation of goods, capital rotation speed and efficiency of the process of social reproduction On the other hand, this function also contribute to increase the income of the bank through the toll payment increases the bank's reputation and create conditions for bank deposits to attract... compare the growth of credit outstanding through the year to evaluate the possibility of lending , finding customers and reviews the implementing plan of the bank credit The higher the index, the more stable and efficient level of activity of bank, whereas banks are struggling, especially in finding customers and demonstrate that the performance of the credit plan has not been effective b The growth rate... smoothly run their activities because of gaining the reputation from the public Moreover, saving deposits help to strengthen and expand the relationship with customers Thanks to this relationship, banks have the opportunity to learn about the needs of their clients and promote their image Therefore banks can determine the operational plans, make the products best suited to the requirements of the market... terms of both space and time • A tool for the state to regulate the macro economy If the Central Bank is responsible for formulation and implementation of monetary policy through tools such as open market operations , reserve requirement , interest rates the banks on the one hand directly affected by these tools on the other hand it also participates indirectly regulating the macro economy through relations... versa if the bank raised the amount of capital that banks are not lending money never created The creation of money by banks only occurs when all of the commercial bank operations carried out by bank transfer to the account debited and credited this to the relevant account Performing the function of money creation, with the loans without the appearance of cash, banks have reduced the volume of cash... frequent and affected by the economic environment, culture and society - Duration of the loan : Depending on the loan purpose and form of loans that the loans of private clients with a term : short, medium to long term - The size and number of loans: the size of individual loans is usually smaller than that of corporate loans However, the number of loans providing to individuals are often large Moreover,... outlook of people in the future This makes lending negatively affected Inflation and interest rates in the lending market are also factors affecting the expansion of lending by commercial banks When interest rates rise in the market, the cost of borrowing for the purpose of serving consumers or business increased production is the cause of this limited loan demand Likewise, when the economy is high inflation,... Therefore , the fees charged on this type of loan is often greater than enterprise loans - Lending rates: The interest rate on these loans is usually higher than other loans of commercial banks The reason is that the cost of lending is large and loans have a high degree of risk As a result, its rates generally is from 1.2 to 1 5 times higher than corporates's lending rate in Vietnam - Credit Risk : Individual