Situation, solutions to improve the efficiency of credit operation to SMEs in the sai gon joint stock commercial bank (SCB)

1 Graduation Thesis DECLARATION Signed hereby, certify hereby that this is my own research The content and the figures presented in the thesis reflected a fair and true situation of the internship organization Ha Noi, May 9th, 2016 Student Pham Thi Thuy Hang Pham Thi Thuy Hang CQ50/51.02 Graduation Thesis ABSTRACT This thesis is aimed at studying situation and solutions to improve the efficiency of credit operation to SMEs in Sai Gon Joint Stock Commercial Bank (SCB), Hong Bang branch, Hai Phong city from 2012 to 2014 This thesis was clearly analyzed through using the following methodology: comparing, statistics, analysis, synthesis, description, etc All data were collected from the financial statement, income statement, annual reports of SCB – Hong Bang branch from 2012 to 2014 It can be said that the branch has gained some achievements in improving the efficiency of credit operation through facilitating loans to SMEs in the period of economic crisis, success in controlling bad debts and overdue loans and implementing some appropriate strategies about the structure of banks' loans and loan security However, there are still shortcomings including low loan sales to SMEs, low outstanding loans to SMEs, unprofessional in lending procedures, only focusing on loans to SMEs in the short term From the results, some proposals were given to the Government, the State Bank of Viet Nam, SMEs and SCB's headquarter Hopefully, this thesis will provide general support for SCB–Hong Bang branch, Hai Phong city to have a better result in credit operation to SMEs in the near future Pham Thi Thuy Hang CQ50/51.02 Graduation Thesis ACKNOWLEGEMENTS To fulfill this thesis, I would like to give my special thanks to many people for their significant helps, contributions, recommendations and encouragement during my writing process Firstly and foremost, I would like to give my heartfelt thanks to Ms Pham Phuong Oanh, my supervisor who has provided me the valuable support, practical insights and helpful feedback from the beginning of forming thesis’s topic until the completion Secondly, I also express profound gratitude to all staffs of SCB – Hong Bang branch, Hai Phong city, credit department and especially Mr Do Thanh Trung, my instructor for his enthusiastic instructions and useful data that he gave to me In addition, I highly appreciated indirect support from Finance - Accounting Department staffs, who gave me a straightway instruction, reminded me of the internship schedule, supported reference documents, and were always available anytime for help Finally, I owe my sincere thanks to my family and friends Their continuous assistance and encouragement helped me a lot during time of internship and attempt to finish this study Pham Thi Thuy Hang CQ50/51.02 Graduation Thesis TABLE OF CONTENTS LIST OF ABBREVIATIONS AOF Academy Of Finance EBT Earnings Before Tax ECU European Currency Unit ESAF Enhanced Structural Adjustment Facility EU European GDP Gross Domestic Product GSO General Statistic Office JPY Japanese Yen No Number ODA Official Development Assistant SCB Sai Gon Joint Stock Commercial Bank SISME Science Institution of Small and Medium - sized Enterprise SMEs Small and Medium - sized Enterprises US United States VND Viet Nam Dong Pham Thi Thuy Hang CQ50/51.02 Graduation Thesis LIST OF FIGURES AND TABLES Figure 1: Organizational structure of SCB, Hong Bang branch, Hai Phong Pham Thi Thuy Hang CQ50/51.02 Graduation Thesis INTRODUCTION 1, Rationale of study Small and medium – sized enterprises (SMEs) play an important role for Viet Nam's economy, especially in the period of industrialization, modernization as well as international economic integration The fact shows that SMEs have contributed nearly 40 percent of GDP and 50 percent of jobs for the society Therefore, this type of enterprises receives a lot of interest and support from the government It is confirmed that the bank credit greatly contributes to the success of SMEs The reason is that commercial banks are considered as a funding channel of national and global economy They are very important position in financial intermediation system In commercial banks, lending activity is one of the most basic and practical activity However, commercial banks are cautious when deciding to make loans to SMEs because this type of enterprises has potential risks affecting the continuity of business operation of the banks and leads to the loss of banks' solvency now As a result, SMEs are difficult to access to capital of commercial banks and not many chances to innovate technology It causes that the credit operation to SMEs of commercial banks is limited Commercial banks in general and Sai Gon Joint Stock Commercial Bank (SCB), Hong Bang branch, Hai Phong city in particular also make efforts to enhance the quality of credit to SMEs, but in fact, these banks only focus on loans to SMEs in the short term with high interest rates to limit risks, give complex loan procedures and resolutely say no to customers who not meet the lending conditions As a result, it significantly affects commercial banks' profits and SMEs miss investment opportunities Clearly, improving the efficiency of credit operation to SMEs is very important Based on this viewpoint and current situation of credit Pham Thi Thuy Hang CQ50/51.02 Graduation Thesis operation to SMEs in SCB, Hong Bang branch, Hai Phong city, I chose the topic: "Situation, solutions to improve the efficiency of credit operation to SMEs in the Sai Gon Joint Stock Commercial Bank (SCB), Hong Bang branch, Hai Phong city" to study 2, Aims of the study The study focused on the efficiency of credit operation to SMEs and solutions to improve the efficiency of credit operation to SMEs in SCB, Hong Bang branch, Hai Phong city The research aimed at three main purposes Firstly, the thesis gave theoretical background about credit operation efficiency to SMEs in commercial banks Secondly, the thesis analyzed and evaluated current situation of credit operation to SMEs in SCB, Hong Bang, Hai Phong city Finally, the thesis gave solutions and recommendations to improve the efficiency of credit operation to SMEs in SCB, Hong Bang branch, Hai Phong city 3, Scope of study Studying the issues that clearly reflect the efficiency of credit operation to SMEs including the process of granting credit to SMEs, credit products and services to SMEs, the current situation of lending activity to SMEs, debt collection to SMEs, bad debts and overdue loans to SMEs of SCB, Hong Bang branch, Hai Phong city in the period of 2012-2014 From that, giving solutions to improve the efficiency of credit operation to SMEs in the branch 4, Methodology To achieve the purpose of research, the thesis used some instruments as follow: The first is data analysis method Specially, the thesis analyzed the situation Pham Thi Thuy Hang CQ50/51.02 Graduation Thesis of credit operation to SMEs in the branch through comparing data in the period of 2012-2014 to show the growth of credit operation to SMEs Besides, the thesis also used financial ratios to evaluate the efficiency of credit operation to SMEs in the branch The second is comparing method The thesis compared standards of SMEs between some countries and Viet Nam, SMEs situation between Hai Phong and Viet Nam and the credit operation between theory and practice in order to improve the persuasiveness of thesis and gave reasonable solutions The third is statistical and descriptive method The purpose of these methods is to measure, describe, present data, and then give conclusions from the data With these methods, current credit situation to SMEs in the branch clearly pointed The fourth is synthetic method through analyzing rationale of study in chapter and data in chapter 5, Organization of the study Besides introduction and conclusion, the thesis is divided into three main chapters as following: Chapter 1: Rationale of credit operation efficiency to small and medium – sized enterprises in commercial banks Chapter 2: Current situation of credit operation for small and medium – sized enterprises in Sai Gon Joint Stock Commercial Bank, Hong Bang branch, Hai Phong city Chapter 3: Solutions and recommendations to improve credit operation efficiency for small and medium – sized enterprises in Sai Gon Joint Stock Commercial Bank, Hong Bang branch, Hai Phong city Pham Thi Thuy Hang CQ50/51.02 Graduation Thesis CHAPTER LITERATURE REVIEW 1.1 Commercial banks 1.1.1 Definition Commercial banks have considered as circulation system of capital to the national and global economies Their main activity is to mobilize the temporarily idle funds in the economy and provide for the people who need money in order to ensure continuous business process and make profit Discussing the concept of commercial banks, each country has its own definition For example, according to the Danish banking law in 1930, commercial banks are essential banks including deposit operations, trading in gold and silver, practicing commercial or real estate fields, credit facilities and the draft to transfer funds and insure According to US's assertion, commercial banks are companies specializing in providing financial services and operating in financial service industry In Vietnam, according to Decree No 59/2009/ND - CP dated on July 16, 2009 by Government about the organization and operation of commercial banks, a commercial bank is a bank performing all bank activities and other business activities so as to make profit under the provisions of the Credit Institutions Law and other provisions of law From above three definitions, it is confirmed that all commercial banks have three main features Firstly, commercial banks accept deposits with the responsibility to repay Secondly, commercial banks use deposits to make loans, invest and discount Finally, these banks implement payments and Pham Thi Thuy Hang CQ50/51.02 10 Graduation Thesis provide services to their clients 1.1.2 Basic activities of commercial banks In consonance with Article 4, Section 12 of Credit Institutions Law dated on June 16, 2010 by the XII National Assembly, banking operation is the business and the regular supply of one or more transactions as follow: a) Acceptance of deposits; b) Granting credit, c) Providing payment services through accounts Nowadays, bank activity makes significant progress; however, it still contains three main activities According to Mr Pham Ngoc Dung and Dinh Xuan Hang, 2011 in Finance and currency, commercial banks' activities includes: 1.1.2.1 Capital mobilization activity of commercial banks It is a basic operation and affects the quality of the banking operation Commercial banks raise capital from the following sources: The first source is bank owners Capital consists of authorized capital, reserved funds and other debt assets under the regulations of central bank It is a decisive factor and life preserver for banks' business scale, especially as banks faced the loss of solvency and bankruptcy The second source is economic entities This is the most important capital source reflecting the banks' nature "borrow money to lend money" The capital was mainly formed through payment deposits and known as current account, termed deposits, savings deposits The third source is borrowing Commercial banks can borrow from the central bank or other credit institutions in domestic and foreign The last is other sources Commercial banks can raise capital from other sources such as support capital, investment and development capital, investment trust funds to lend under the program or construction project, Pham Thi Thuy Hang CQ50/51.02 56 Graduation Thesis * From the branch Firstly, approval process and lending procedures of the branch were not professional Although the process of granting credit to SMEs in the branch was quite scientific and reasonable, credit officers had not much experience in appraisal, analysis, forecasts information from financial statements, not care in the consultation and guidance to SMEs, not timely meet SMEs' needs of capital Besides, the bank launched the strict rules on collateral, especially with the first SMEs loans, but little attention to the feasibility of the business projects This made the branch ignore potential customers who were capable of effective business and created income for the branch Moreover, customer policy in the branch was inflexible and inappropriate The branch was not really active in exploiting SMEs' advantages and supporting capital to SMEs in the medium-long term Hence, loan sales and outstanding loans to SMEs were still low Finally, the branch did not have preferential policies to SMEs in securing loans It created a negative impact on SMEs' business operations Pham Thi Thuy Hang CQ50/51.02 57 Graduation Thesis CHAPTER SOLUTIONS TO IMPROVE THE EFFICIENCY OF CREDIT OPERATION TO SMEs IN SCB, HONG BANG BRANCH, HAI PHONG CITY 3.1 Development orientation of SCB, Hong Bang branch, Hai Phong city 3.1.1 General orientation of SCB, Hong Bang branch, Hai Phong city Given the advantages and well-defined strategy of development, the branch’s goals from 2015 to 2020 are determined They are enhancing the financial competence, developing the business toward diversity, effectiveness, safety and customer-orientation, strengthening the risk management according to international standards to create a sustainable foundation for future growth" Specially, ● Developing modern products and services of high competitiveness, especially insurance-linked products for cross-selling, products with local characteristics to meet customers' needs ● Developing business operations in depth, increasing the amount set aside for risk provisions to improve the financial competence ● Restructuring the mobilized funds by reducing input costs as well as increasing funds in the long term from stable sources ● Concentrating on handling bad debts and overdue loans in compliance with current legal regulations ● Outstanding loans continue to grow in the coming years with the stable growth rate ● Ensuring profit steadily increases over years Pham Thi Thuy Hang CQ50/51.02 58 Graduation Thesis 3.1.2 Orientation towards the improvement of credit operation efficiency to SMEs in 2015-2020 Recognizing the important role of SMEs for the economy, SCB, Hong Bang branch, Hai Phong city has set out reasonable guidelines and policies to promote credit operation efficiency to SMEs as follow: * Developing the credit on careful and safe basis and focusing on the prioritized fields and sectors as oriented by the Government and the State Bank of Viet Nam * Promoting the growth scale of credit operation and reaching a minimum scale as stipulated by SCB Bank * Implementing effective measures to urge the process of debt recovery in combination with collateral of bad debts and ensure the ability to repay both principal and interest to the branch * Expanding credit operation to SMEs through the improvement of products, services as well as enhancing the application of information technology in order to simplify the lending procedures, quickly respond to customer's requirements and limit the maximum credit risk * Enhancing staff training to improve the ability to make plan, assess and analyze competitiveness, risk, appraisal and consultative ability to SMEs and human resources management capabilities * Enhancing the management competence and deploying Information Technology applications in business report and data analysis served for timely and effective decisions from Board of Director and Board of Management Pham Thi Thuy Hang CQ50/51.02 59 Graduation Thesis 3.2 The experience of some countries in Asia about credit operation to SMEs and lessons learned to Viet Nam 3.2.1 The experience of some countries in Asia about credit operation to SMEs * Japan: To promote the development of SMEs, the Japanese government has adopted policies to support financing to SMEs raising from the central to local levels In fact, credit guarantee companies has guaranteed SMEs in lending activity, even without collateral and prescribed interest rate ceiling to these enterprises As a result, credit guarantee companies can reduce guaranteed costs, limit risks and help SMEs access to capital easier In addition, the credit guarantee companies in Japan has evaluated the financial situation and decided to guarantee to SMEs on the basis of CRD system (data system relating to the management of SMEs) and balance sheet of the businesses * China China has devoted great attention to the type of SMEs In fact, the Chinese government has promulgated the decrees and policies to protect the right to fair competition and the right to fair trade to SMEs and created good conditions to SMEs can access to the world market In addition, a number of special funds continuously has added and expanded for the purpose of financial support to SMEs such as SMEs development funds; SMEs support funds to develop services system; promotion funds, etc * Singapore Singapore is one of the countries with reasonable policies to support the sustainable development of SMEs in the domestic and the foreign enterprises investing in Singapore These policies are implemented through government's Pham Thi Thuy Hang CQ50/51.02 60 Graduation Thesis guarantee to SMEs when these enterprises intend to borrow capital in order to maintain the continuity of business process in commercial banks Furthermore, Singapore also has focused on the export market and built training funds to enhance knowledge and bravery for managers in business process 3.2.2 Lessons learned to Viet Nam First, Viet Nam needs to build a system of clear and synchronous credit guarantees from the central to local levels, in which the rules and regulations must be consistent with the guarantee conditions of SMEs Second, policies with the aim of supporting finance to SMEs should be flexible and diverse With SMEs operating in priority areas, implementing the preferential policies in terms of reductions or exemptions from income tax is necessary Third, Viet Nam must focus on export support to SMEs in the form of export support funds, providing market information, promotional support, etc Last, Viet Nam needs to focus on improving the quality of human resources to SMEs 3.3 Solutions to improve the efficiency of credit operation to SMEs in SCB, Hong Bang branch, Hai Phong city Based on the lessons learned of Viet Nam above in combination with the credit situation in the branch, the branch takes practical measures to improve the efficiency of credit operation to SMEs in the future 3.3.1 Focusing on the quality of capital mobilization activity The more abundant and sustainable commercial banks' capital is, the higher the ability to meet customers' needs is However, the fact showed that the branch only focused on lending activity to SMEs in the short term The result was that SMEs was difficult to access to the branch's capital in the mediumPham Thi Thuy Hang CQ50/51.02 61 Graduation Thesis long term Therefore, the branch must take reasonable measures in lending activity to meet the demand for capital of SMEs in the medium-long term It is useful to develop investment activities of the branch in depth and maintain the stability of business process of SMEs 3.3.2 Building a flexible lending rate mechanism to SMEs A flexible interest rate policy helps commercial banks have enough capital, make high profits and ensure consistency with the State Bank of Vietnam's interest rate policy Therefore, the branch must make reasonable lending policy to SMEs For familiar and prestigious customers, the branch needs to give preferential policies with lower interest rates With the first loan customers, the branch needs to create good conditions about the level of interest rate and loan term With these key industries, the branch must give preferential interest rates to encourage business activity Clearly, a flexible lending rate mechanism brings many opportunities in business and ensures the ability to repay both principal and interest for the branch under the previous agreement at the prescribed time limit 3.3.3 Improving the efficiency of appraisal to SMEs Credit appraisal is a comprehensive review of the proposed loan of customers to assess SMEs' repayment capacity and decide whether to make loans to SMEs or not This stage is extremely important to help the branch make the right decisions when lending to SMEs Therefore, SCB, Hong Bang branch, Hai Phong city needs to implement measures as follow: The first is completing appraisal activity on the basis of organizational models which is innovative and synchronous and perfecting mechanisms, processes and methods of appraisal The second is regularly evaluating the volatility of the business market, the profitability ratio of investment capital that enterprises obtained Pham Thi Thuy Hang CQ50/51.02 62 Graduation Thesis The third is regularly updating the economic-technical information, industry information, market prices, etc to serve for the appraisal The last is improving the level of credit officers, especially in the field of evaluating the feasibility of projects and ethics of SMEs 3.3.4 Simplifying loan procedures, loan profile to SMEs Currently, the branch's loan procedures to SMEs are complicated and cumbersome To meet the branch's needs, SMEs have to spend more time and costs to complete procedures such as loan using profile, legal profile of the business, profile proving financial capacity, profile identifying business results, etc Clearly, this not only makes it difficult to credit officers but also affects the business result of the enterprises Therefore, the branch should have simple and compact procedures, but still ensure the safety of customers and branch depending on the scale of each loan, borrowers, and competitiveness However, the loan request papers and legal profile cannot be ignored 3.3.5 Regular monitoring of credit to SMEs The objective of supervision is to ensure that credit is used for the right purpose and controls credit risk Therefore, the branch needs to take measures as follow: The first is to periodically analyzing of SMEs' financial statement For SME's loans in the long term, the branch must require SMEs to submit timely financial statements to analyze and evaluate the changes in the repayment capacity of customers The second is to control the business location of SMEs It is necessary for the branch to know SMEs' business situation and efficiency The third is to check collateral through by directly checking the status of the property and regular report on the status of SMEs' assets Pham Thi Thuy Hang CQ50/51.02 63 Graduation Thesis The last is to monitor account activity of SMEs in the branch in order to analyze the situation of product consumption, cash flow and the ability to repay principal and interest for the branch 3.3.6 Completing the information system In the period 2012-2014, the whole of SCB system in general and the branch in particular were successful when completing and putting into operation various Information Technology projects such as the Contact Center System, the bank internal Fund Transfer Pricing (FTP), the Mobile Banking System and the international MasterCard In the coming years, the branch needs to improve safety, security and application of Information Technology in the development of business activity, focus on management and statistical reports in order to shorten time as well as ensure credit requirements to SMEs In addition, the branch must enhance Information Technology based products, services, utilities for customers via ATM, Ebanking, Mobile banking Furthermore, building a mechanism of deployment and monitoring and enhancing risk management in compliance with regulations in managing and operating Information Technology systems are very important 3.3.7 Improving the level of credit officers Improving the quality of human resources is an important goal in the formulation and development of human resources of the branch Solutions to improve the quality of human resources in the branch includes: The first is recruitment In order to improve the quality of human resources, the branch has innovated the recruiting process from testing, evaluation to interviews with the professional and transparent process of recruiting to serve the sustainable development of the branch The second is the training The training should focus on problems such as enhancing the form of intensive training, promoting self-study, self -study Pham Thi Thuy Hang CQ50/51.02 64 Graduation Thesis The third is remuneration policy The income of every employee is ensured and commensurate with the individual’s productivity, quality and work efficiency Besides, the branch also holds several internal contests to create competition within the system and motivates business units to drive themselves forward and to achieve the business goals 3.4 Recommendations to the government, State Bank of Vietnam, SMEs and SCB's headquarter 3.4.1 Recommendations to the Government In recent years, the government has spent quite a lot of attention to SMEs because of the significant contribution of the type of enterprises to the national economy In terms of preferential policies, the fact shows that there are many preferential policies to SMEs, but the provisions in the law are often scattered Clearly, the government needs to develop a unified system of preferences in accordance with specific criteria In term of legality, the government should improve the legal environment and create favorable conditions to SMEs in the business With the synchronous the legal environment, it helps lenders and borrowers implement their rights and obligations, ensures equality and stimulates the development of economy activities In terms of the macro-economy, the government should take measures and strategies to maintain the stability of the market, prices and a reasonable inflation rate and speed up the process of international economic integration This factor is extremely important to help the development of economic equities, especially banks and SMEs 3.4.2 Recommendations to the State Bank of Viet Nam The State Bank of Viet Nam is considered as the agency issued the documents, regulations, operational guidelines policies for commercial banks To create a flexible lending environment to SMEs, the State Bank of Viet Pham Thi Thuy Hang CQ50/51.02 65 Graduation Thesis Nam needs to set a system of legal framework which is synchronous, transparent and fair The State Bank of Vietnam also should create a favorable condition in term of unsecured-loan to commercial banks, be more proactive in removing barriers and build a level playing field between commercial banks and the state-owned banks Besides, the State Bank of Vietnam must improve the facilities, give warnings through statistics and analysis in order to minimize risks in the banking system and support commercial banks in collecting, searching and analyzing information, carefully examine the lending situation to SMEs in commercial banks and control the efficiency of credit operation to SMEs to prepare and provide realistic documents 3.4.3 Recommendations to SCB's headquarter The operation of SCB, Hong Bang branch, Hai Phong city bases on compliance with the rules of SCB's headquarter Thus, SCB's headquarter must control and support the branch to improve the efficiency of credit operation The first is to reform the loan procedures Currently, to access to commercial banks' capital, SMEs have to spend a lot of time to prepare the documents As a result, it significantly affects the business process of the enterprises Thus, SCB's headquarter should remove unnecessary procedures; build understandable credit and mortgage contract form in accordance with the decision of the law The second is to strengthen the internal control to credit operation with loan profile, term loans, debt maturity, collateral, credit lines The third is to update and specify the documents prescribed by the State Bank of Viet Nam, and then helps the branch deploy, edit and add to keep pace with new requirements of credit operations The fourth is to enhance the efficiency in communication and marketing, Pham Thi Thuy Hang CQ50/51.02 66 Graduation Thesis define and build a SCB brand recognition system on the market The last is to conduct technological modernization and build an information management system so as to fully exploit information and ensure the safety of capital Pham Thi Thuy Hang CQ50/51.02 67 Graduation Thesis 3.4.4 Recommendations to SMEs Along with the efforts of SCB, Hong Bang branch, Hai Phong city, SMEs also must have policies and measures to contribute to the efficiency of credit operation First, SMEs have a feasible and effective investment project It is very useful for the branch to decide whether lending to SMEs or not Clearly, SMEs have to investigate, analyze and evaluate the changes of market demand, the tax policy and interest rates, etc Besides, SMEs need to focus on the modern equipment and technology in order to save time as well as costs of production, product innovation, competitiveness and sustainable development Next, build high-level workforce is the decisive factor to business's success Therefore, managers must be discerning, enthusiastic, pay attention to material and spirit life of the employees Last, SMEs must strengthen financial statement transparency The clearer the financial statement is, the higher SMEs' reputation is So, SMEs must enhance transparency in financial activities, seriously implement the government's standards in credit operation, and invite the independent audit firms to periodically inspect SMEs' financial situation Pham Thi Thuy Hang CQ50/51.02 68 Graduation Thesis CONCLUSION The development of bank credit to SMEs is the strategy of commercial banks in general, and SCB, Hong Bang branch, Hai Phong city in particular However, the credit relationship between the branch and SMEs is still inadequate now Thus, the solutions to improve the efficiency of credit operation to SMEs is essential Through the credit situation to SMEs in the branch, the thesis gained some following results: The first is to show rationale of credit operation to SMEs in commercial bamks The second is to analyze and evaluate current situation of credit operation efficiency to SMEs in SCB, Hong Bang branch, Hai Phong city with the aim of pointing out the advantages, limitations and causes of these limitations The last is make recommendations to the government, the State Bank of Viet Nam, SCB's headquarter and SMEs to help SMEs easily access to the branch's capital However, improving the efficiency of credit operation to SMEs is a major problem, requiring a clear and synchronous law system and the efforts and determination from many sides Through this thesis I hope to contribute somewhat to improve the efficiency of credit operation in the branch Pham Thi Thuy Hang CQ50/51.02 69 Graduation Thesis Pham Thi Thuy Hang CQ50/51.02 70 Graduation Thesis REFERENCE PGS.TS Phạm Ngọc Dũng, PGS.TS Đinh Xn Hạng (2011) Giáo trình Tài Tiền tệ NXB Tài Chính Annual reports of SCB, Hong Bang branch, Hai Phong city in 2012, 2013, 2014 Financial statements of SCB, Hong Bang branch, Hai Phong city in 2011, 2012, 2013 Income statement of SCB, Hong Bang branch, Hai Phong city in 2012, 2013, 2014 Decision No 493/2005/ QD - NHNN dated on April 22, 2005 by the State of Bank about debt classification, provision funds and using provision funds to solve credit risk in commercial banks Decision No 18/2007/ QD - NHNN amended some articles of the decision 493 Decision No 1627/2001/ QD - NHNN dated on December 31, 2001 by the Governor of the State Bank about promulgating regulations on lending of credit institutions to clients Decree No 56/2009/ ND - CP dated on June 30, 2009 by Government about supporting SMEs development aid Decree No 59/2009/ ND - CP dated on July 16, 2009 by Government about organization and operation of commercial banks 10 The Credit Institutions Law dated on June 16, 2010 by the XII National Assembly Pham Thi Thuy Hang CQ50/51.02 ... chose the topic: "Situation, solutions to improve the efficiency of credit operation to SMEs in the Sai Gon Joint Stock Commercial Bank (SCB), Hong Bang branch, Hai Phong city" to study 2, Aims of. .. 2.1.1 The formation and development of Sai Gon Joint Stock Commercial Bank, Hong Bang branch, Hai Phong city * General information about Sai Gon Joint Stock Commercial Bank Sai Gon Joint Stock Commercial. .. Stock Commercial Bank (SCB), First Joint Stock Commercial Bank (Ficombank), and Viet Nam Tin Nghia Joint Stock Commercial Bank (TinNghiaBank) SCB (the consolidated bank) officially operated since