Improving credit quality for small and medium sized enterprises at joint stock commercial bank for investment and development of vietnam transaction office 1

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - LÊ VĂN ĐỨC IMPROVING CREDIT QUALITY FOR SMALL AND MEDIUMSIZED ENTERPRISES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM TRANSACTION OFFICE NÂNG CAO CHẤT LƯỢNG TÍN DỤNG ĐỐI VỚI DOANH NGHIỆP NHỎ VÀ VỪA TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2018 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - LÊ VĂN ĐỨC IMPROVING CREDIT QUALITY FOR SMALL AND MEDIUMSIZED ENTERPRISES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM TRANSACTION OFFICE NÂNG CAO CHẤT LƯỢNG TÍN DỤNG ĐỐI VỚI DOANH NGHIỆP NHỎ VÀ VỪA TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS PHẠM VĂN HỒNG Hà Nội - 2018 DECLARATION “I would like to undertake the whole thesis "Improving credit quality for small and medium enterprises at Vietnam Development Bank - Transaction Office 1" is my own independent work All analyzes in the subject matter have a clear origin All references in this article are subject to current regulations of the Faculty of Business Administration - Hanoi National University Ha Noi, 16/01/2018 ACKNOWLEDGEMENT “This thesis is completed with many valuable help First of all, I would like to send my sincere thanks to Pham Van Hong, facilitator, facilitated, enthusiastic, responsible with me during the thesis, I also appreciate the teachers in the Faculty of Management Business - National University of Hanoi; The scientists, authors of scientific papers, articles I consulted helped me complete this thesis Honor to thank! TABLE OF CONTENTS ABBREVIATIONS i FIGURE ii TABLE iii INTRODUCTION .1 Chapter 1: THEORETICAL FRAMEWORK ON CREDIT QUALITY FOR SMEs AT COMMERCIAL BANKS .6 1.1 Small and medium-sized enterprises 1.1.1 Concept 1.1.2 Characteristics of SMEs 1.1.3 Role of SMEs in the economy 1.2 Bank credit for SMEs 10 1.2.1 Concept of bank credit 10 1.2.2 Characteristics and role of bank credit for SMEs 11 1.2.3 Bank credit products for SMEs .11 1.3 Quality of credit for SMEs 13 1.3.1 Concept 13 1.3.2 Necessity of improving credit quality for SMEs 14 1.3.3 Indicators for assessing credit quality for SMEs 15 1.3.4 Factors affecting the improvement of credit quality for SMEs at commercial banks .19 1.3.5 Experience in improving credit quality for SMEs at some commercial banks 22 Chapter 2: REALITY OF CREDIT QUALITY FOR SMEs AT BIDV – TRANSACTION OFFICE 27 2.1 Overview of BIDV- Transaction Office 27 2.1.1 History of foundation and development of BIDV- Transaction Office 27 2.1.2 General functions and duties of BIDV – Transaction Office .29 2.1.3 Organizational structure 29 2.1.4 Business operations of BIDV – Transaction Office in recent years 33 2.2 Reality of credit quality for SMEs at BIDV – Transaction Office 39 2.2.1 Overview of SME customers at BIDV – Transaction Office .39 2.2.2 Indicators of credit quality for SMEs at BIDV – Transaction Office 40 2.3 Evaluation of reality of credit quality for SMEs at BIDV – Transaction Office 58 2.3.1 Achievements 58 2.3.2 Limitations and causes of the limitations 58 Chapter 3: SOLUTIONS TO IMPROVE CREDIR QUALITY FOR SMEs AT BIDV – TRANSACTION OFFICE 71 3.1 Some orientations for developing credit activities for SMEs at BIDV – Transaction Office 71 3.2 Solutions to improve credit quality for SMEs at BIDV – Transaction Office 72 3.2.1 Develop a suitable credit policy 72 3.2.2 Complete the collection and processing of information 73 3.2.3 Enhance the quality of credit staff 76 3.2.4 Increase the inspection and control activities 78 3.2.5 Strengthen advisory service 80 3.3 Recommendations 80 3.3.1 For the Government .80 3.3.2 For the State bank 81 3.3.2 For Head Office BIDV 81 CONCLUSION 83 REFERENCES 84 ABBREVIATIONS NO ABBREVIATIONS FULL FORMS BIDV SMEs Joint Stock Commercial Bank for Investment and Development of Vietnam Small and medium-sized enterprises i FIGURE Figure 2.1: Organizational structure of BIDV – Transaction Office .32 Figure 2.2: Procedure of granting credit at BIDV – Transaction Office .67 Figure 3.1: Sources of information in credit appraisal and approval .75 ii TABLE Table 1.1: Criteria for categorizing SMEs in accordance with Decree No 56/2009/NĐCP Table 2.1: Scale of credit growth at BIDV – Transaction Office over the years 33 Table 2.2: Scale of capital mobilization at BIDV – Transaction Office over the years 35 Table 2.3: Indicators of general operations of BIDV – Transaction Office over the years 37 Table 2.4: Income structure from operation segments at BIDB – Transaction Office 37 Table 2.5: Revenue from services of BIDV – Transaction Office 39 Table 2.6: Development of new SME customers at BIDV – Transaction Office 41 Table 2.7: Scale of developing SME customers in Hanoi area of BIDV – Transaction Office 41 Table 2.8: Credit growth at BIDV - Transaction Office 42 Table 2.9: Credit structure by sector for SMEs at BIDV – Transaction Office .44 Table 2.10: Credit structure by products and services provided by the bank 45 Table 2.11: Situation of using preferential credit packages to develop credit for SMEs at BIDV – Transaction Office .48 Table 2.12: Overdue loans and bad loans over total outstanding loans for SMEs 50 Table 2.13: Situation of off-balance-sheet debt recovery for SMEs banks at BIDV – Transaction Office 52 Table 2.14: Overdue loans and bad loans by groups of sectors 53 Table 2.15: Credit turnover for SMEs at the branch 55 Table 2.16: Profits from credit activities 56 Table 2.17: Cases of credit limitation and credit refusal at the branch .57 Table 2.18: Some documents to reduce credit risks at BIDV Transaction Office 59 Table 2.19: Survey on the credit policy of the branch 60 iii Table 2.20: Lending interest rates for SMEs at BIDV – Transaction Office .61 Table 2.21: Information about human resources in a typical credit department .62 Table 2.22: Survey on human resources of the branch .63 Table 2.23: Survey on the ability to collect and process information of the branch 64 Table 2.24: Survey on the control process of the branch 65 Table 2.25: Survey on the credit procedures of the branch .68 iv - Maintain the proportion of short-term lending so that it is higher than that of medium and long-term lending in order to minimize risks; at the same time, accelerate the growth of medium and long-term loans to expand the scale of credit - There should be specific regulations on the implementation of loan security measures BIDV – Transaction Office should have a thorough appraisal of collaterals in both market value and legal status to avoid the situation where enterprises use same collaterals to apply for loans at many different banks or the value of assets is lower than the value on paper However, the procedures should be conducted quickly to avoid inconvenience Nowadays, enterprises are complaining about complicated and time-consuming procedures Therefore, the branch should combine with notary offices to reduce some procedures to reduce transaction time and costs After being agreed, the credit policy of the branch should be disseminated to the entire credit officers Only by this way can the implementation bring efficiency To be effective, credit policy needs to be specific to each type of customer because each type of customer needs different forms of application: - For customers who are unable to pay their debts or refuse to pay debts, the branch should take resolute and timely measures to collect debts and avoid losses - For customers who have temporary difficulties in production (money not recovered after the sale), the branch should have preferential policies, encourage and create the best conditions for them to repay - With traditional and strategic businesses, there need to be interest rate incentives to encourage them to borrow from the branch 3.2.2 Complete the collection and processing of information In a modern economy, information plays a very important role in any decision of an enterprise, especially in the monetary field Information is also considered a valuable resource, so the exploitation and use of information greatly affect the operation of commercial banks In credit activities of commercial banks, the information must be complete, timely and accurate At present, the sources of information of BIDV – Transaction Office are quite diversified, but the quality of these information sources is not good Therefore, in the 73 coming time, the branch should review the current information sources to promote the development of customers as well as enhance the credit quality of the branch, namely: - Sources of information in customer development: The sources of information about customers that BIDV – Transaction Office can use include: + Source of information on the list of newly established enterprises at the Business Registration Office under Ministry of Planning and Investment: The branch needs to access to this information and monthly/quarterly assigns customer management division to approach newly established enterprises; offers rewards to those who successfully access to customers (opening accounts, making credit relationships, etc.) + Source of information on enterprises registering to pay electronic tax via BIDV with General Department of Taxation (through information exchange gate of the General Department of Taxation) but not registering for e-Tax services at BIDV: This source of information is exploited by BIDV - Head Office and provided to the branches in the system Based on the list provided by the Head Office, the branch should require the sales department to review, appraise and consider approaching + Source of information from the provincial tax department: From this source, BIDV - Transaction Office can exploit the list of good enterprises through the amount of annual taxes as well as the compliance with tax regulations At the same time, the branch can screen for customers who often delay tax payments + Information from associations, clubs (VCCI, Small and Medium-sized Enterprises Association, Investment Clubs, etc.) + Source of information from the list of current CIF but having not formed relationships with the branch or formed irregular relationships, with a low transaction amount This is the source of customer information that is considered to be the cheapest compared to the other sources, as these customers may actively open the relationship at the branch due to binding relationships 74 - Source of information in credit appraisal and approval: Direct interviews Sources of information of Intermediaries the branch Borrower’s reports Figure 3.1: Sources of information in credit appraisal and approval The information for credit approval can be obtained from three main sources: direct interviews, intermediaries and reports from the borrowers The branch uses this information to assess customers’ financial ability, project profitability, business history and repayment (if the customers have loans) and the possible risks if customers not pay or fully pay, and the value of collaterals In order to improve the quality of credit information, firstly BIDV – Transaction Office must build its own customer information system, not only with familiar customers who have had credit relations with the bank but also with potential customers Customer information should be categorized right at the time of collection It is necessary to pay special attention to target customers Besides, the branch should establish close relationships with Credit Information Center of the State Bank of Vietnam (CIC) and other banks in the same system In addition to collecting information about customers, when assessing the loan applications of customers, the credit officers at the branch also need to find out information about market, policies and regulations of the State, and competitors After collecting the information, the process and classification of information is also very important for the credit staff to exploit the information in the fastest and most effective ways At present, the economic situation as well as the political situation of many countries is unstable The domestic economy is gradually stabilizing the economic financial system, and tightening currency with the top goal of controlling inflation at a reasonable level under the set objectives These factors have considerably affected the 75 business performance of enterprises, especially SMEs, so the quality of credit for SMEs is also affected This requires the collection and processing of information of the bank to be improved in order to anticipate the changing trend of the business environment in the future, thereby reducing the credit risks 3.2.3 Enhance the quality of credit staff Human resources have a particularly importance role in all social activities in general and economic activities in particular Especially in activities of commercial banks, the staff plays a very important role because, unlike other business activities, human resources’ activities must be based on different characteristics of the main business objects In the banking business, the main business object is currency Therefore, the requirements for banking staff not only emphasize in professional knowledge but also in professional ethics To ensure the quality of the staff, especially credit staff, BIDV – Transaction Office should take the following measures: + Provide knowledge and expertise for credit staff In terms of improving professional knowledge, the Corporate Credit Division combines with the Legal Department and the Internal Control Department of the branch to develop and improve the evaluation regulations, procedures and guidelines to help credit officers, especially the new ones, understand and the contents, things to as well as the methods and skills needed when receiving and appraising applications for loans In addition, the Human Resources Department of the branch should regularly organize professional training courses by referring to appropriate training courses The contents of professional training courses should focus on practicality and liveliness in order to create positive and active acquisition Moreover, it is necessary to broaden the staff’s knowledge not only in credit appraisal work, but also in other supportive skills in the course of the credit staff's work, such as: knowledge of law, ability to communicate and negotiate with customers, ability to identify, evaluate customers, sense of responsibility and professional ethics In addition, the Human Resources Department of the branch should also have regulations, policies to recruit, use, and create conditions for employees to develop 76 their working capacity To that, BIDV - Transaction Office not only pays attention to the issue of salary and reward, but also needs to give employees a good working environment, give them autonomy in the work assigned Only by this way can the staff promote their working spirit and responsibility At the same time, it is necessary to have a clear punishment-reward regime There should be appropriate forms of punishment for individuals who cause risks due to subjective factors that affect the business results and prestige of the bank + Build a professional team of employees in the entire branch In order to improve the quality of credit, it is necessary not only to raise the professional level of the credit staff, but also to raise the level of the entire staff of BIDV – Transaction Office Since credit activities are related to many aspects of the system, in order for these activities to be carried out smoothly and quickly, it is necessary to have credit team of high professional knowledge and professional working style in the entire branch In the training plan, the branch should organize training courses and reasonably invest in the training and improvement of the staff The strategy for developing and training personnel must be placed in the development of the entire branch through the recruitment, training, salary, and bonus The use and transfer of staff should be conducted under the regulations to develop and improve the staff in line with the development requirements of the branch and increasing requirements of customers They must be a professional and qualified team with good skills, personalities, high sense of discipline and responsibility, and reasonable working style + Assess employees’ ability according to levels In the strategy of developing and training human resources, it is necessary to accurately assess the current situation of the employees, classify them according to different levels, according to types of operation Employee competency assessment is understood as a review process that systematically evaluates employee performance and capabilities, including working results, working methods, personalities and job skills Employee competency assessment is used for a variety of purposes such as: 77 • Provide feedback to employees on how well they perform their work compared to the standards and compared to other employees; • Help the staff to adjust and correct mistakes during their work process; • Encourage and motivate employees through of assessment, recognition and support; • Provide information as the basis for training, payroll, reward, staff transfer, organizational improvement, and so on; • Strengthen the good relationship between superiors and subordinates Use the results of staff assessment to: • Offer effective rewards • Arrange work and staff development planning • Set up training plan • Create motivation to reach goals 3.2.4 Increase the inspection and control activities In the development process of any socio-economic organization, apart from the strategic objectives, the motto "safety, effectiveness, and sustainability" is always the goal throughout the development To achieve this goal, the leaders have used a variety of scientific and practical solutions in which the inspection, supervision and internal auditing are the indispensable solutions for making the organization develop in the right direction At present, the inspection and control of credit activities for SMEs at BIDV – Transaction Office is still limited Therefore, to strengthen this work, the branch should implement the following solutions: - The branch needs to set up an effective internal control system as the business activities of the branch contain many potential risks, especially the lending activities to SMEs Many objective and subjective impacts lead to the failure to comply with the regulations of the State, the sector and the procedures of the branch, causing great losses to the property as well as reputation of the branch Therefore, the management and establishment of a full and effective internal control system and a strong internal audit department have a very important role and position Internal inspecting and auditing activities help leaders manage the operations of commercial banks in 78 accordance with the legal corridor, principles, objectives and development strategies so that the operation of commercial banks will be more secure, more effective, step by step meeting the requirements of international integration Through inspection and supervision, the management team objectively assesses the results of the system; handle the shortcomings and grasp the difficulties arising at the premise to modify and supplement mechanisms and policies, creating better conditions for SMEs to access bank loans; promote the use of capital in line with the objectives of the credit program; increase the quality of credit for SMEs and reduce credit risks to the lowest level For the inspection work: The internal control division at the branch should raise awareness of the purposes, roles and principles of internal control; Basing themselves on the assigned functions and tasks, regularly review legal documents and professional procedures related to currency and banking activities for supplementation In addition, the branch leaders need to study and develop of a full set of tasks and procedures for the staff to well perform their professional tasks assigned; actively study and propose the model of specialized controllers; analyze and assess the levels of risks in specific business activities of SMEs and in each lending process so as to have suitable control measures, minimize risks and ensure safety for the system and reputation of commercial banks Credit officers should review the latest financial statement and related papers and bills of enterprises; request enterprises to open accounts at the branch to follow accurately and easily their actual business situation In addition, every quarter, credit officers should go to the premises for sudden inspection without prior notice; Evaluate the value of mortgaged or pledged assets in order to have appropriate storing measures; require enterprises to add collaterals if these assets lose value or stop issuing additional loans At the same time, it is necessary to grasp information disadvantageous for SME loan projects or economic and legal information in order to promptly inform and advise enterprises and ensure the efficiency of the loans for both sides For the control work: The internal control division at the branch should review legal documents and professional procedures related to control activities in order to 79 supplement and amend in time and ensure the appropriateness and synchrony with legal documents of the State in order to perfect the legal corridor for control activities Besides, it is necessary to study and apply international standards; standardize audit procedures and reports; renew methods of approaching applications, collecting information and audit evidence; speed up the application of technology to improve the quality of credit for SMEs 3.2.5 Strengthen advisory service This is a completely new service in the Vietnamese market This service derives from the fact that SMEs are the segment of potential customers of the bank but SMEs themselves have many disadvantages, in which the biggest disadvantages are the management level and lack of development strategy Consultancy services help SMEs overcome the limitations, promote the advantages Advisory services are and will be deployed in the near future to catch the trend Therefore, this is the area that Transaction Office needs to invest and concern more in the future Some advisory areas that can be implemented: + Legal advice relating to investment; + Advice on financial management; + Advice on investment connection; etc In order to popularize and develop this type of service, the branch should establish a team of professional consultants for SMEs based on the selection of the most qualified staff in the current enterprise customer management team to train the skills and knowledge to serve the advisory activities This service promises to bring added value to SME customers at Transaction Office 1, thereby increasing the competitive value of BIDV’s products and services in the segment of SME customers 3.3 Recommendations 3.3.1 For the Government Building a legal corridor to handle debt secured assets quickly Although it is theoretically possible for the loans to be secured when there is a risk that the client can not pay back the debt, the proceeds from the sale of collateral will help the Bank to 80 compensate for losses due to creditors These are usually 70%, 80%, very high 90% of the value of the asset However, the current reality shows that the recoverable value of securitized assets is small enough not to cover the losses suffered by the Bank There are many reasons for this phenomenon but one The main causes are the time to handle the security property is too long in accordance with the law In particular, the characteristics of SME customers are legal documents are often quite simple, not tight and not standardized, so when disputes arise, litigation will cause many difficulties for the application The Law on the protection of the legitimate rights and interests of the Bank in the process of granting credit to customers 3.3.2 For the State bank Providing advisory services and providing directional information to commercial banks To build a contingent of cadres who work in aggregating and analyzing information in the country and in the world; Provides useful forecasts and advice for the operation of commercial banks At the same time, updating the feedback on the reasonableness, as well as the relevance of regulations related to credit operations in general and credit for SMEs in particular, for commercial banks to make corrections well suited 3.3.2 For Head Office BIDV  Completing the credit process: In the credit process of BIDV, the evaluation has revealed many limitations In particular, the biggest limitation is that credit officers carry out all stages of the loan process, leading to a high risk of credit risk In order to minimize the disadvantages, after reviewing the credit process in some local and regional banks, the author proposes that the implementation of the credit procedure be based on the principle of separating the two real parts current: customer department; loan appraisal and approval department + Customer Relationship Manager: - Responsible for marketing, care, inquiries of customers, direct instructions and receive customer loans - Be responsible for managing, monitoring the loan, the process of using loans from customers after disbursement 81 - It is not responsible for appraising, proposing and making a loan decision + Loan appraisal and approval department: - Appraise the loan application - Analyzing, assessing and quantifying risk for loan demand - Proposed leadership decision for a loan In addition to the two direct departments involved in the credit process as mentioned above, BIDV needs to continue to promote the role of the internal control unit (a department independent of the credit department) supervise the implementation of procedures, loan applications and risk management However, BIDV needs to study the transfer of risk officers into the internal inspection and control department rather than the same staff with the credit department, so that the functions of the staff can be promoted full  Issue more preferential policies to create a mechanism for SME group development: Head Office of BIDV should consider removing current problems of general credit policy when granting credit to customers ( conditions for own capital, secured assets, borrowing time ) for SMEs who are evaluated by the Branch and the Head Office with good potential and development potential (export customers export, trade in high-tech products )  Programs to improve the level of staff: Regular training regularly with the teaching of experts at home and abroad to improve professional skills, sharing skills translate, train morally bank officials and build a healthy business culture Supporting training costs and creating incentive mechanisms for credit officers to cultivate foreign languages so as to have more opportunities to interact with foreign SMEs who are not yet focused on exploiting 82 CONCLUSION Small and medium-sized enterprises play a more and more important role in the implementation of the country's socio-economic goals The existence and development of types of enterprise in the market economy is the objectiveinevitability This is also the orientation of economic development of our Party and State in the context of regional integration and globalization Improving credit quality for SMEs is a very necessary task motivating SMEs to invest and produce to bring benefits for the enterprises themselves and the whole society Therefore, the author conducted a study on improving the quality of credit for SMEs at BIDV – Transaction Office The study achieved the following results: Provide a theoretical framework on SMEs and credit quality for SMEs, indicators for evaluating credit quality at commercial banks Study the reality of credit quality for SMEs at BIDV – Transaction Office 1, and then assess the strengths, limitations and causes of the limitations in credit quality for SMEs at the branch Based on the limitations to identify the solutions to improve the quality of credit for SMEs at BIDV - Transaction Office Due to the constraints in time and ability, the research thesis could not avoid certain shortcomings and limitations Therefore, comments from teachers and readers are always welcome to contribute to the completion of the thesis 83 REFERENCES Central Institute for Economic Management (2009), Expanding and improving access to credit for small and medium-sized enterprises, The Economic Journal No 53 Ngô Thu Giang (2015), Impact of factors of listed company characteristics on the level of information disclosure and its consequences, PhD thesis in Economics, National Economics University Government (2009), Decree 56/2009/ND-CP, regulations on support for development of small and medium enterprises, issued on 30/6/2009 Doan Thanh Ha et al (2013), Roadmap and solutions to improve competitive capacity for SMEs in Can Tho City after Vietnam joined WTO and after the global economic crisis, Online Business Forum Newspaper Phan Thi Thu Ha (2007), Administration of Commercial Banks, Publishing House of Transportation, Hanoi Phan Thi Thu Ha (2013), Curriculum for Commercial Banks, National Economics University Publishing House, Hanoi Le Dinh Hac (2005), Solutions to improve the competitiveness of Vietnamese commercial banks in the context of international economic integration, PhD thesis of Economics, Ho Chi Minh City University of Economics Minh Vo Viet Hung (2009), Solutions to expand credit in Ho Chi Minh City of Agribank, The website of Ho Chi Minh credit guarantee fund for SMEs Luu Thi Huong, Vu Duy Hao (2005), Corporate Finance Financial Publishing House, Hanoi 10 Philip Kotler (2012), Marketing Management (Translation), Social Labor Publishing House, Hanoi 11 Nguyen Thi Mui (2005), Commercial banking services in Vietnam, Reform before too late, Vietnam Economic Times, Hanoi, July, page 30-38 12 Le Hai Nhung (2014), Credit quality for small and medium-sized enterprises at ACB - Hanoi Branch, Library of Finance Academy 84 13 National Assembly (2010), Law No 47 - Law on Credit Institutions, issued on 22/03/2010 14 Nguyen Thanh Phong (2011), Diversification of Vietnam Commercial Bank's Activities in the Condition of International Economic Integration, PhD thesis in Economics, National Economics University 15 Nguyen Hoai Phuong (2013), Bad debt management at commercial banks, PhD thesis, National Economics University, Hanoi 16 State Bank of Vietnam (SBV), Circular 02/2013/TT-NHNN, regulations on classification of assets, level of deduction, Role in operation of credit institutions, foreign bank branches, issued on 21/01/2013 17 State Bank of Vietnam (SBV), Circular 09/2014/TT-NHNN, amending and supplementing a number of articles of Circular No 02/2013/TT-NHNN dated 21/01/2013 of the Governor of the State Bank, The regulations on classification of assets, the level of deduction, the method of setting up risk provisions and the use of provisions to deal with risks in the activities of credit institutions and foreign bank branches, March 18, 2014 18 State Bank of Vietnam (2014b), Circular 36/2014/TT-NHNN, stipulating limits and prudential ratios in operation of credit institutions and foreign bank branches, November 20, 2014 19 G.Vairava Subramanian S Neru (2012), Implementation of credit rating for SMEs (Small & Medium Enterprises) – How is beneficial to Indian SMEs, International Journal of Scientific and Research Publications, Volume 2, Issue 4, April 2012 ISSN 2250-3153 20 Truong Quang Thong (2010), Bank credit finance for SMEs - An empirical study in Ho Chi Minh City, Saigon Times Online 21 Vo Duc Toan (2012), Credit for SMEs of Joint Stock Commercial Banks in Ho Chi Minh City, Ho Chi Minh City Institute for Development Studies online 85 APPENDIX: COMPLETION OF QUALITY ASSURANCE IN CREDIT FOR SMALL AND MEDIUM ENTERPRISES IN BIDV TRANSACTION OFFICE Content of the survey: credit policy, credit process, human resources, ability to collect and process information, control process; Number of samples surveyed: 20 Person surveyed: Credit Officer BIDV Transaction Office Survey results: Content Questions Total The Bank has clear guidelines, documents and guidelines on Credit policy 75/100 3.75/5 The regulations, documents are highly synchronous 62/100 3.1/5 The regulations, documents are issued very timely 62/100 3.1/5 69/100 3.45/5 69/100 3.45/5 65/100 3.25/5 69/100 3.45/5 75/100 3.75/5 69/100 3.45/5 Professional training for bank staff is well done 62/100 3.1/5 Data, customer information is fully built, details 69/100 3.45/5 62/100 3.1/5 69/100 3.45/5 65/100 3.25/5 62/100 3.1/5 risk management for its branches The process of lending to individual customers of the Branch is clearly defined The bank's customer requirements are now reasonable Crediting process Mean The determination of conditions and levels of loans for personal purposes are carried out professionally, seriously The bank provides a variety of information channels about the regulations, requirements of customers for each purpose of borrowing individual customers Bank employees have good professional qualifications Human Resources Employees demonstrate professional ethics and high honesty in their work Data, information about customers are updated continuously, Ability to timely collect and The information and assessment of customers are accurate and process information reliable Banks focus on collecting and processing information from many sources to obtain the most complete customer information Process The control system of the bank is designed fully, clearly 86 Content Questions Total control Process control is complete and clear 68/100 3.4/5 Control work is carried out regularly and updated 65/100 3.25/5 87 Mean ... 1. 1.3 Role of SMEs in the economy 1. 2 Bank credit for SMEs 10 1. 2 .1 Concept of bank credit 10 1. 2.2 Characteristics and role of bank credit for SMEs 11 1. 2.3 Bank. .. - LÊ VĂN ĐỨC IMPROVING CREDIT QUALITY FOR SMALL AND MEDIUMSIZED ENTERPRISES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM TRANSACTION OFFICE NÂNG CAO CHẤT LƯỢNG... Bank credit products for SMEs .11 1. 3 Quality of credit for SMEs 13 1. 3 .1 Concept 13 1. 3.2 Necessity of improving credit quality for SMEs 14 1. 3.3 Indicators for