TÍN DỤNG NGÂN HÀNG THƯƠNG MẠI đối với NÔNG NGHIỆP ỨNG DỤNG CÔNG NGHỆ CAO TẠI TỈNH LÂM ĐỒNG tt tiếng anh

MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OFVIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY COMMERCIAL BANK CREDITS FOR HIGH-TECH AGRICULTURE IN LAM DONG PROVINCE DAO DUNG TRI DOCTORAL THESIS SUMMARY HO CHI MINH CITY, 2020 MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OFVIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY COMMERCIAL BANK CREDITS FOR HIGH-TECH AGRICULTURE IN LAM DONG PROVINCE DAO DUNG TRI DOCTORAL THESIS SUMMARY Major: Finance – Banking Code: 34 02 01 Scientific supervisor: ASSOC PROF PH.D NGUYEN THI LOAN HO CHI MINH CITY, 2020 LIST OF PUBLISHED SCIENTIFIC WORKS "Dealing with bad debt of Vietnam commercial Bank, situation and recommendation", Asia Pacific Economic Review ISSN 0868-3808, 479, 4-7, 2016 "Commercial bank credits for high-tech agriculture in Lam Dong Province", Industry and Trade Magazine ISSN 0866-7756, 20, 316-319, 2019 "Integrated model explaining the granting of credit facilities intention tohigh-tech agriculture", Review of Finance ISSN: 2615-8973, 1st issue,Dec-2019 (718), 201-105, 2019 CHAPTER ONE: RESEARCH OVERVIEW 1.1 Reason for choosing topic 1.1.1 Research background High technology agriculture (high-tech agriculture) is a step forward in agricultural production Lam Dong Province has a very favorable climate and suitable land to develop high-tech agriculture By the end of 2018, the total area of high-tech agriculture production in Lam Dong Province is 54,477 (19.5% of province’s total farming area) The high-tech agriculture program has been identified as one of key programs for leading and directing implementation since 2004 Thus far, the Provincial committee and the People's Committee (PPC) has issued many advocates and policies aimed at promoting the development of agriculture in the direction of high technology application With the advantages and input of the whole political system, Lam Dong is using its advantages to develop the high-tech agriculture area to produce vegetables and flowers, thereby improving the productivity and value of products According to Lam Dong Department of Agriculture and Rural Development, there are more than 700 hectares that grow vegetables or flowers have revenue from 01 to 03 billionVND per year, some areas even have revenue more than billion VND on a hectare per year High-tech agricultureproduction requires huge investment capital, to achieve the revenue over 03 billion/ha/year, each hectare of production land should invest in the greenhouse system, irrigation system, machinery from 2.2 billion to 2.5 billion VND Statistics from the State Bank of Vietnam - Lam Dong Branch showed that from 2012 to 2018, localcommercial bank’s branches in the province of Lam Dong have lent only 1,021 billion to develop high-tech agriculture This capital was providedjust about 20% of the credit demand for high-tech agricultureproduction of the whole period (4,837 billion VND) Although the province has many advantages to develop high-tech agricultureand high-tech agriculturedevelopment is under the concerned of Provincial Commission and the PPC It was put into focus program, and was a key to develop in each period.However, the amount of credit from commercial banksput into this area in the recent years is very limited According to Boucher et al (2007), Diagne et al (2000), the credits provided by the commercial bank have played a very important role in increasing agricultural productivity It helps farmers invest in production tools andtechnological innovations, and also in applying new technologies in agriculture to increase their production efficiency and income Therefore, identify the knots in credit grading system ofcommercial banks in Lam Dong Province for high-tech agricultureproduction is a pressing matter 1.1.2 Overview of related research and scientific gap 1.1.2.1 International studies Experimental studies about agricultural credit constraints and borrowing behavior of farmers in rural Punjab by WaqarAkram, Zakir Hussain, MH Sial and Ijaz Hussain (2008) The study of Rabah (2015), about factors affecting the bank credit of Jordanian commercial banks.The study by Firas Mohammed Al-Rawashdeh, Al Balqa; Burhan M Al-Omari et al (2013) on the factors affecting granting of credit facilities in commercial banks in the Aqaba Special Economic Zone Jordan Study on credit for farmers in five districts of Malawi byDiagne and Manfred Zeller (1999) Study by Duong and Inzumida (2002) on commercial bank credits for farmers in three provinces of Vietnam (NinhBinh, QuangNgai and An Giang) Study byGuangwen and Lili (2005),about the financial needs of farmers in Longren, Guizhou, China Study by Nuryartonoet al (2005) on credit rationingof farm households and agricultural production: empirical evidence in the rural areas of Central Sulawesi,Indonesia Study byQuartey et al (2017), about financing the growth of SMEs in Africa: the contraints to SME financing within ECOWAS The study by Harvie et al (2013),about SME’ access to finance: evidence from selected Asian economies, etc 1.1.2.2 Domestic studies The study by Nguyen Quoc Oanh, Pham Thi My Dung (2010), about determining factors affecting farming households’ ability to access commercial bank creditsin suburban of Hanoi city.The study of Tran Thuc and Huynh TrungThoi (2013) about factors affecting farmer’s access to formal credit in AnGiang province Study by Nguyen Ngoc Tuan (2012) about credit for coffee producers in DakNong Province Study by Mai Thi Thuy An, Phan Thi Ngoc Huyen and Nguyen Van Vu An (2016),aboutSMEs capitals demand from commercial banks in TraVinh city Study by Thai Anh Hoa (1997) about the rice farmers’ accessibility to formal credit in An Giang and Can Thoprovince Study by Tran ThoDat (1998),aboutfactors affecting famers’ formal credit accessibility in Vietnam Study by Tran Ai (2009), about factors affecting commercial bank creditsof aquaculture farms in TraVinh province Study by Vo Thanh Danh (2008),about the accessibility to commercial bank creditsof private companies in the Mekong river delta The study byTruong Dong Loc and Tran Ba Duy (2010),about the factors affecting the formal credit accessof farmers in KienGiang province Study by Nguyen Thi Hai Yen (2016),about the coffee producers’ accessto credit from commercial banksin Dak Lak Province Study by Nguyen Thi Tam (2006), about theimportant role of commercial banks’crediton developing farm economy Study by Le Dang Lang, le Tan Buu (2014), about the attitude of farmers on high-tech agriculturedevelopment in DakNong Province Study by Nguyen Van Tuan (2015),about the factors affecting credit quality inAgribank Study by Tran Quang Van et al (2017), about SMEs’ ability to access financial resources, etc 1.1.2.3 Review on previous studies After reviewing domestic and foreign studies, the thesis includes some comment as follows: Firstly, there have been many studies about credit activities in Vietnam as well as abroad These studies have shown factors affecting credit grade activity, access to the commercial bank credits capital suitable for each audience and research location However, the majority of these studies only focus on one perspective From perspective of the lenders- commercial banks, we have the studies of Mpuga, Paul (2008), Harvie et al (2013), Firas Mohammed Al-Rawashdeh, Al Balqa, Burhan M Al-Omari et al (2013), Quartey et al (2017), Mai Thi Thuy An et al (2016), Vo Thanh Danh (2008), Doan Thi Hong Dung (2012), Nguyen Van Tuan (2015), Nguyen Thi Hai Yen (2016) From the manufacturing household's perspective, there are studies of WaqarAkram, Zakir Hussain, MH Sial and Ijaz Hussain (2008), Guangwen and Lili (2005), Nuryartono et al (2005), MamoGirma et al (2015), Mpuga Paul (2008), Diagne and Manfred Zeller (1999), Duong and Inzumid (2002) , Nguyen Thi Hai Yen (2016), Vuong Quoc Duy and Dang Hoang Trung (2015), Truong Dong Loc and Tran Ba Duy (2010), Tran ThoDat (1998), Thai Anh Hoa (1997), Tran Ai Ket and Huynh TrungThoi (2013) etc.,and from the perspective ofcompanies and farm owners,we have the research of Harvie et al (2013) , Quartey et al (2017), Tran Quang Van et al (2017), Nguyen Hong Ha, Huynh Thi Ngoc Tuyen, Do Cong Binh (2013), etc However, there are not many extensive and comprehensive study about commercial bank credits grading activity from both sides, customers and commercial banks Secondly, there have been a lot of studies on credit activities for agricultural production in Vietnam as well as abroad However, there have not been much intensive studies on developing commercial banks’ lending There are studies of high-tech agriculture but the research subject is inclined to orient and the concerns when developing high-tech agriculture, such as the study by Le Dang Lang, Le Tan Buu (2014) Thirdly, some studies specialize in the role of bank credit in agricultural production such as the studies by Boucher et al (2007), Diagne et al (2000), Nguyen Thi Tam (2006) etc Fourth, previous studies have mentioned and described quite specifically the causes that can lead to grant capital funding and the factors affecting the needs and satisfaction of credit for the hightech agriculture household credit todevelop rural agriculture However, previous studies has only focused on explaining objective factors that affect the granting of credit facilities, such as land size, land value (Duong and Inzumida, 2002; WaqarAkram, Zakir Hussain, MH Sial and Ijaz Hussain, 2008;Diagne and Manfred Zeller, 1999; Tran ThoDat, 1998), scale of the business, business area (Harvie et al, 2013; Quartey et al, 2017; Vo Thanh Danh, 2008), lending procedure, collateral (Vo DucToan, 2012; Nguyen Hong Ha, Huynh Thi Ngoc Tuyen, Do Cong Binh, 2013), credit policy, marketing policy (Doan Thi Hong Dung, 2012; Nguyen Van Tuan, 2015, etc.) or demographic factors, such as age, gender, education level (Mpuga, Paul, 2008, Guangwen and Lili, 2005; Tran ThoDat, 1998; Tran Ai Ket, 2009, Truong Dong Loc and Tran Ba Duy, 2010, etc.), number of family members (Duong and Inzumida,2002; Diagne and Manfred Zeller, 1999; Nuryartonoet al, 2005;Truong Dong Loc and Tran Ba Duy, 2010; etc.) However, these studies didn’t concern about subjective perception factors of individual commercial bank employees Therefore, from the results of the above studies, it is difficult to propose the implications of governance for the commercial bank leaders in order to increase the loan intention of customers, understanding the behavioral intention of credit officers in granting credit and to maintain credit growth in this area Based on the research background as well as gaps in previous scientific works, the author chose the topic for thesis “Commercial bank credits for high-tech agriculture in Lam Dong Province" This thesis is aimed to overall study the commercial banks’ granting of credit facilitiesin three aspects.Firstly, in term of the commercial bankin the role of credit financing unit.Secondly, in terms of the customer that usecredit loan service ofcommercial bank.And finally, in term of credit officer.Therefore,this study on the credit from commercial bank for high-tech agriculturein order to boost the commercial bank credits growth in high-tech agriculture area; this also contribute to the development of high-tech agriculture in Lam Dong Province This thesis has in-depth differences in the field of study and scientific and practical meaning to apply in Lam Dong Province 1.2 Research objectives and research questions 1.2.1 Research objectives • General objectives Evaluategranting of credit facilitiesto high-tech agriculture activities from three perspectives: commercial bank as credit financing unit, customer approaching capital, and the granting of credit facilitiesintentionof the credit officer; in order to propose solutions and recommendations to developcommercial bank’ credit for high-tech agriculture in Lam Dong Province • Specific objectives (1) Evaluate the status of granting of credit facilities tohigh-tech agriculture activities of commercial banks in Lam Dong Province in 2012-2018 period to draw preliminary achievements as well as the remaining problems that need disassembly; (2) Evaluatethe accessibility and demand of commercial bank credits for high-tech agriculture customers; (3) Evaluate the factors affectedgranting of credit facilitiesintention from commercial bank credit officers for high-tech agriculturein Lam Dong Province; (4) Propose solutions and recommendations to develop commercial bank’ credit for high-tech agriculture in Lam Dong Province 1.2.2 Research questions • What are the achieved results and remaining limitationsthat affectgranting of credit facilities activities of the commercial banks for high-tech agriculture in Lam Dong Province? • Which difficulties and barriers that affect access to bank credit demand from customers who need capital for high-tech agriculture in Lam Dong Province? • What causes affectedthe development of commercial bank credits capital for high-tech agriculture in Lam Dong Province? • What are the solutions todevelop commercial bank creditsfor high-tech agriculture in Lam Dong Province? 1.3 Research objective and research scope 1.3.1 Research objective Activities of commercial bank’ granting of credit facilitiestohigh-tech agriculture in Lam Dong Province 1.3.2 Research scope Study the bank credits in lending field for high-tech agriculture at commercial banks in Lam Dong Province In terms of space: the scope of data and the scope of study is limited to Lam Dong Province In terms of time: usage data for study is aggregated in the period between 2012 and 2018 The survey aimed to customers and credit officers at commercial banks in Lam Dong Province was made in 2019 • Secondary data is collected from 2012 – 2018 to assess the current status of lending to high-tech agricultureat the commercial bank branches in Lam Dong Province • Survey period was from 3/2019 to May 8/2019 The survey object were credit officers working in commercial bank branches Scope of the survey was Dalat city and its four neighboring districts: Lac Duong, Don Duong, Lam Ha and DucTrọng (will be referred to as “survey area” in this study) The survey area is the region havehigh-tech agriculture focus mainly in Lam Dong Province.Survey area has 95% total land that grows vegetables and flowers in Lam Dong Province The survey object are the individual business household, business, co-operatives groups operate in flowers and vegetable production, who has demand for bank credit, excluding enterprises with direct foreign investment capital 1.4 Research methods and data collection 1.4.1 Research methods • Research secondary data method, statistics, synthesis, comparison and analysis (implementing objective 1) • Text analysis method (implementing objectives 1,4) • Customer survey methodandIPA grid analysis (implementing objective 2) • Commercial bank credit officer survey method and quantitative method to evaluate the factors affecting the intention of granting of credit facilities (implementing objective 3) • Methods of analysis, synthesis, comparison and evaluation to form the foundation of proposed solution recommendations (implementing objective 4) 1.4.2 Data collection • The secondary data taken from summary report of the State Bank of Vietnam in Lam Dong Province, commercial banks and the annual statistics of Lam Dong Province, from 2012 to 2018 • Primary data to verify the intention of the credit officer’s granting of credit facilities behavior from the sample set of 358 credit officer surveys in survey area • Primary data to assess the needs, current loan status andpurpose of using the loan, and the difficulties that customershave, etc., which wascollect from the sample set of 161 survey of farmers and businesses 1.5 New points and contributions of thesis 1.5.1 New points First, this thesis analyzed and reviewed commercial bank credits activities in Lam Dong Province with three perspectives: commercial banks as capital funding unit, the demand capital from customer’s perspective and factors affecting the capital granting intention of credit officers Second , this thesis has approached the theory of behavior and inherited integrated models to construct a model that quantitative factors explaining the granting of credit facilities intentionby credit officers forhigh-tech agriculture in Lam Dong Province from the survey results Third, thisthesis has discussed and given the commercial bank credits concept for high-tech agriculture, the characteristics of high-tech agriculture production and its lending features Four, this thesis used combining data from primary source and secondary source with multiple analytical methods to find out the difficulties, challengingissuesofboth supply and demand in term of bank credit facilities for high-tech agriculture 1.5.2 Scientific contributions First,build asystematic theoretical frame of high-tech agriculture and commercial bank credit, and from which evolved into the theory aboutcommercial bank credit of high-tech agriculture production Second, systematizeinterpretation of theoretical frameworks of behavior, evaluation, inheritance of experimental studies to formulate models explaining the factors affecting the decision of the credit grade of staff 1.5.3 Contributions in terms of practice • The thesis has provided more information about the current status of agricultural credit activities, especially the high-tech agriculture in Lam Dong Province • Point out the difficulties in the loan process for high-tech agriculture and the obstructions in credit activities and help the commercial banks in Lam Dong Province to build the business strategy • Provide useful advices and recommendations to build policies for promoting credit growth of other industriesatcommercial banks in Lam Dong Province 1.6 Thesis structure Chapter 1: Thesis overview Chapter 2: Theoretical background Chapter 3: Research Methods Chapter 4: Data analysis Chapter 5: Conclusions and solutions, recommendations Chapter one Conclusion Chapter has introduced the reason and practical necessity of research on commercial bank credits for high-tech agriculture in Lam Dong Province After reviewing relevant domestic and foreign studies, Chapter found scientific gap; and with that background, determines the content, objectives, subjects, scope and methods of research; contributions to scientific and practical research Chapter is the foundationto performresearches in next chapters CHAPTER TWO: THEORETICAL BACKGROUND 2.1 High-tech agriculture overview 2.1.1 The concepts and features of high-tech agriculture 2.1.1.1 The concepts of high-tech agriculture • The concept of high-tech agriculture According to Pham S (2006), "High-tech agriculture is agricultural application synthesis of new kinds of technologies suitable with faming space condition at specific time and the advanced technical facilities to achieve optimum productivity, quality, food safety and cost of production Therefore, it helpsincrease competitiveness with high economic efficiency on the basis of ensuring sustainable ecological environment” • Concept of high-tech agriculture area • Concept of high-tech agriculture region • Concept of high-tech agriculture business • Concept of high-tech agriculture farm • Concept of high-tech agriculture household • Concept of high-tech agriculture project • Concept of the agricultural production value chain 2.1.1.2 The features of high-tech agriculture First, high-tech agriculture produces new breed seedlings with high yield, good quality and shorter growth time Second, high-tech agriculture creates new production methods thatconcentrate andcreate large quantity of goods Businessescan catch up with each other in terms of technology, skills and specialized production line Each phase of the production line can be operated by a specialized business Third, when forming zones and regions that produce signature products canalso createagriculture tourismattractions Fourth, the soil is gradually replaced by growing mediums or nutrient liquid Thereby, the hydroponic cultivation model using growing mediums becomes more popular Fifth, manual labor is slowly replaced by machines and high skilled labors into the production line Sixth, can producing large volume of evenly high quality goods Therefore, it is possible to join the global trade and value chain by meeting the market supply requirements and product quality and origin traceability Seventh, fromeconomic perspective,the demand for credit capital from commercial banks would rise due to the need in investingmore on machinery, equipment and modern technology It will increase the investment cost per unit area; Eighth, the appearance of challenges such asthe follow-the-crowd feature of high-tech agriculture, the poor quality products blended into market will damage to the farmers Ninth, to form co-operation producing model between businesses, co-ops, co-ops group with agriculture households for the matter of supply of materials, production and consumption Tenth, high-tech agriculture is the foundation to continuing into 4.0 eraof smartagriculture of comprehensive, sustainable and modern 2.1.1.3 The advantages of high-tech agriculture 2.2 Commercial bank creditstheoretical background 2.2.1 Commercial bank credits concept From the nature of credit and the concepts stated, it is possible to conclude that, Commercial bank credits (on lending operations perspective) are the process that commercial banks use their own capita or mobilized capital to make loans to legal entity and individuals with specified conditions and for a certain period on which the two sides agreed upon the principle of repayment When due, the borrower is obliged to repay the original loan amount plus interest 2.2.2 Classification of bank credits According to Bui Dieu Anh et al (2009), bank credits classified as follows: • Based on credit purpose Credit for business operation Credit for consumption • Based on credit deadlines Short-term credit Medium-term credit Long-term credit • Based on credit collateral Credit doesn’t havecollateral Credit hascollateral • Based on the form of credit Credit as money Credit as asset • Based on Repayment method Installment credit Non-installment credit Credit repayment upon request • Based on repayment characteristic Direct repayment credit Indirect repayment credit 2.3 Overview of commercial bank credits to high-tech agriculture 2.3.1 The concept of commercial bank credits to high-tech agriculture Commercial bank credits (in lending operations) for high-tech agriculture is the process that commercial banks ' use of their own capital or mobilized capital to make loans to legal entities and individuals for high-tech agriculture with specified conditions and for a certain period on which the two sides agreed upon the principle of return When due, the borrower is obliged to repay the original loan value plus loan interest rate 2.3.2 Features of commercial bank credits for high-tech agriculture First, the scale and method of high-tech agriculture makes the cost of lending activities of commercial banks dropped; Second, when giving loans to high-tech agriculture, the high risk caused by nature and other environment factors is no longer a major issue as traditional agricultural production; Third,because of the large investment per unit area, the short-term loan for high-tech agriculture can cause difficulties to the borrower when it is due; Fourth, the evaluation of loan collateral in high-tech agriculture is generally low due to the right ownership of establishments in the land was unspecified by the law; Fifth, in terms of credit risk inlending to high-tech agriculture, the risk from natural force is not much, but there still are risks come from technology, unstable market, and from the risk of capital loss; Sixth,high-tech agriculture chain value also enablecommercial banks to create niche high-tech agriculture loan products, such as lending through value chains, lending through focal institutions, lending to projects or co-operations, etc Seventh, the loans for high-tech agriculture are usually lower than its demand; Eighth, high-tech agriculture lending requires the credit officer’s effort to grasp new technologies, production processes, etc to be confident in the evaluation and make credit proposals; Ninth, purchasing contracts prior to the production is considered as important key to loan evaluation and proposal in casesbusiness don’t have secured assets in high-tech agriculture lending 2.3.3 The role of commercial bank credits for high-tech agriculture 2.3.4 Developing commercial bank credits to high-tech agriculture 2.3.4.1 Perspectives on developing commercial bank credits for high-tech agriculture 17 The research used the cluster sampling method, with the overall sampling subjects was all credit officers who never did and who did high-tech agriculture credit contract at commercial banks in survey area 358 questionnaires were collected for formal research sample and divided into groups, group including 175 questionnaires were those credit officers who have not previously granted high-tech agriculture credit and 183 questionnaireswere the credit officers who have grantedhigh-tech agriculture credit.The sample size qualified minimum sample size (n = 150) Nguyen DinhTho (2011) 3.2.5 Measure scale The measure scale of theoretical concepts was inherited from the previous studies by Lee (2009) and Bhattacherjee (2001), through qualitative research with experts to complete and correct the content, in accordance with research context was credit activities at commercial banks The research used Likert measuring scale with levels respectively (1: Completely disagree – 5: Completely agreed) 3.2.6 Data analysis methods The data was processed through two common steps on structural equation modeling (SEM) with both measurement model and a structural model that were evaluated by software AMOS 22.0 The measurement model was analyzed by the Cronbach’ alpha test and the exploratory factor analysis (EFA) for preliminary assessment of the measure scale The confirmatory factor analysis (CFA) was used to verify composite reliability, convergent validity and discriminant validity and general compatible rate of the scale Structural model was used SEM technique with maximum likelihood (ML) for estimating the overall relevance to the research model and the stated research consumptions 3.2.6.1 Descriptive analysis 3.2.6.2 Measure scale reliability analysis 3.2.6.3.Exploratory factor analysis (EFA) 3.2.6.4 Confirmatory factor analysis (CFA) 3.2.6.5 Testing the research model Chapter Three Conclusion Chapter has designed and described the full range of research methods to fulfill four objectives of the thesis, the research results is shown in Chapter 18 CHAPTER FOUR: RESEARCH RESULTS 4.1.Overview of the socio-economic status and agricultural production in Lam Dong Province 4.1.1 Natural condition of Lam Dong Province 4.1.2 Socio-economic status in Lam Dong Province 4.1.3 The status of high-tech agriculture production in Lam Dong Province 4.3.1.1 The status of agricultural production in Lam Dong Province 4.3.1.2 The status of high-tech agriculture production in Lam Dong Province 4.2 The status of the commercial bank credit development for high-tech agriculture in Lam Dong Province 4.2.1 Overview of the activities of credit institutions in Lam Dong Province 4.2.2 Demand for credit in high-tech agriculture production in Lam Dong Province The total capital to executethe high-tech agriculture program between 2001-2015 and 2016-2020 was 10,083,782 million dong In which, the state budget capital was 3,174,000 million dong and the capital mobilized from credit institutions, businesses and households was 6,909,782 million dong If the estimated demand for credit capital is about 70%, then total credit demand for hightech agriculture production in the phase 2011-2020 was about 4,836,847 million dong 4.2.3 Status of credit for agricultural in countryside area at commercial banks in Lam Dong Province About agricultural in countryside area, total sales of agricultural in countryside area lending in 2018 was more than 104,949 billion dong, up 237.5% to the previous year 2017, increase abundantly of 60,764 billion dong and went-up more than 80 times to the number in 2012 In terms of outstanding loan balance to agricultural in countryside area, the total outstanding loan balance in 2018 was more than 58,775 billion dong, up to 33.4% over the year 2017 with an increase of 14,726 billion dong and went-up more than 25 times to of year 2012 Credit balance growth of commercial banks in the agricultural in countryside areagrew average 71% per year 4.2.4 The status of commercial bank credits for high-tech agriculture in Lam Dong Province - In loan sales: The total loan sales of high-tech agriculturein the 2012-2018 period was 1,021 billiondong, averaged 255.2 billion/year (2015-2018) Loan sales by commercial bank: with 26 commercial bank branches in Lam Dong province by 31/12/2018, there were commercial bank branches had credit for high-tech agriculture with the total loan sales in 2015-2018 was 1,021 billion dong In which, the loan sales of AgribankLam Dong was 474,504 billion dong, accounted for 46%; AgribankLam Dong was 286,865 billion VND, accounted for 28%; Vietinbank Lam Dong was 29,493 billion dong, accounted for 3%, Vietcombank Lam Dong was 122,971 billion dong, accounted for 12%; Military Bank was 41,411 billion dong, accounted for 4% and Lien Viet Post Bank was 66,081 billion, accounted for 6% The proportion of loan sales for high-tech agriculture in total loan sales for agricultural in countryside area: Figure 4.1 below shows that in the 2015 – 2018 period, loan sales proportion of high-tech agriculture to total loan sales of agricultural in countryside area was very low (in 2015 was 1.489%; in 2016 was 0.374%, in 2017 was 0.791% and in 2018 was 0.342%) 19 Source: Summary of State Bank - Lam Dong Branch Figure 4.1 Commercial bank loan sales proportion of agricultural in countryside area and high-tech agriculture in Lam Dong Province - Regarding the proportion of outstanding loan balance of high-tech agriculture to outstanding loans balance of agricultural in countryside area: in 2015-2018 period, outstanding loan balanceofhigh-tech agriculture accounted for very low percentage (0.255% in 2015, 0.264% in 2016, 1.267% in 2017 and 0.481% in 2018) -Regarding customers of high-tech agriculture loans: the total number of customers received hightech agriculture loans in the 2015-2018 period was 798 customers.In which, there were 21 customerswerebusinesses and co-ops and 777 customers were households The number of hightech agriculture customers in this period compared to agricultural in countryside area loan customerswas very low (Businesses < 7% and households < 2%).In 2017, total customersreceived loansfor high-tech agriculture pursuant toDecision No 813 (loans with preferential rate) was 443 customers (8 businesses and 435 households) In 2018, the number was 18 customers (9 businesses and households) -Regardinghigh-tech agriculture customers with outstanding loan balance: the number of hightech agriculture customers with outstanding loan balance accounted for 0.2% of total agricultural in countryside area customers The number of business customers with outstanding loan balance was only 1.1% of total businesses customers with outstanding loan balance in agricultural in countryside area -Regarding non-performing loans (NPLs) in agricultural in countryside area and high-tech agriculture: NPLs of agricultural in countryside area in 2015-2017 period accounted for about 25% of total NPLs, and there was none NPLs of high-tech agriculture In 2018, NPLs of agricultural in countryside area accounted for 92.6% of total NPLs, and NPLs of high-tech agriculture accounted for 1.47% of total NPLs in agricultural in countryside area 4.2.5 Discussing the results of current high-tech agriculture bank credits in Lam Dong Province First, growth in loan sales and in outstanding loan credit balance of agricultural in countryside area in 2012-2018 period was very high Meanwhile, the growth in high-tech agriculture loan sales was not much The average increases was 36% per year; in the whole period, total high-tech agriculture loans was 1,021,325 million, accounted for 0.51% of agricultural in countryside area loan sales 20 Second, growth in loan sales and outstanding loan balance in agricultural in countryside area and high-tech agriculture spiked in periods (2014-2015) and (2016-2017) Third, the short-term debt in agricultural in countryside area and high-tech agriculture customers still accounted for the majority Four, the number of agricultural in countryside area loanscustomers increased very quickly during the whole period.Meanwhile, the number of high-tech agriculture loan customers wassmall (only 21 businesses, co-opswas borrowed for high-tech agriculture) 4.3 Results of customer survey on commercial bank capital access demand 4.3.1 Overview of the survey sample 4.3.2 Survey results • Survey result on agricultural production characteristics • Survey results on high-tech agriculture production • Survey results of customers’ concerns when participating in high-tech agriculture Table 4.1 Survey of customers’ concerns when participating in high-tech agriculture Concerns Quantity Rate Lacking of capital 134 83,2% Lacking of businesses to buy veggies and flowers after harvesting 102 63,4% Unfocused product brand 84 52,2% Lack of knowledge and experience 72 44,7% Not understanding the current quality standards 61 37,9% The mixing of the low-quality agricultural goods 47 29,2% Lacking of management skills 38 23,6% Lack of support from the government 33 20,5% Lack of labor 24 14,9% Do not know to choose which high-tech agriculture product 19 11,8% Unstable market 5,0% Lacking of farm land 1,9% Source: from survey results • Customer survey results on access to capital credit -Survey results aboutcommercial bank loan purposes for high-tech agriculture production Table 4.2 Survey on loan purposes of high-tech agriculture loan customers Loan purposes Quantity Rate Investing on facilities (net houses, greenhouse, etc.) 62 82,7% Investing on production system (machinery, irrigation systems, lighting system) 57 76,0% Production (seedlings, fertilizers, pesticide, labor salary, etc.) 54 72,0% Paying debts 25 33,3% Buying or renting agricultural land 16 21,3% Other purpose 10,7% Source: from survey results • Other funding sources of survey subjects Table 4.3 Survey on subjects about other capital sources for high-tech agriculture production Other capital sources Quantity Rate 21 Buy on credit from suppliers Borrow from relatives Advance payment from buyers Not using any others capital source Participate tontine Other credit sources • 49,3% 45,3% 41,3% 17,3% 9,3% 6,7% Source: from survey results Survey results on the type of bank loans collateral Table 4.4 Survey on subject’s loan collateral Collateral type House, real-estate Agricultural land Other people's collateral Machinery, factory or private property Non-collateral loan • 37 34 31 13 Quantity Rate 58 77,3% 21 28,0% 11 14,7% 9,3% 2,7% Source: from survey results Survey on customers don’t borrow from commercial banks for high-tech agriculture production Table 4.6 Reasons customers didn’t borrow from commercial banks for high-tech agriculture production yet Reasons customers don’t borrow from bank Quantity Rate No need to borrow 35 40,7% Already borrowed from other source 51 59,3% There’s need but don’t know where to borrow 5,8% Reason for non-approved loan No collateral 2,3% Insufficient production capacity 2,3% Don’t know how to complete the loan application 20 23,3% Poor loan propose 21 24,4% Credit restriction policy of commercial bank 3,5% Other reasons for not want to borrow Bribing cost for credit officer 15 17,4% Got other capital sources 46 53,5% Don’t want to pay interest 14 16,3% Complicated procedure 17 19,8% Too far from the bank branches 7,0% Costly procedure process 21 24,4% Time-consuming to make propose and wait for 40 46,5% approving Source: from survey results • Survey result of difficulties when borrowing from commercial bank Table 4.7 Survey of difficulties in commercial bank loan process for high-tech agriculture production 22 Difficulties Low evaluating collateral asset Loan term is too short Not many other forms of collateral Approved loan amount is lower than need Application take long time to approved Must have collateral asset Complicated procedure • - Quantity 51 46 29 26 15 15 Rate 68,0% 61,3% 38,7% 34,7% 20,0% 20,0% 10,7% Source: from survey results Survey results about the quality of credit services for high-tech agriculture in Lam Dong Provinces Customer survey results about the importance of the credit service quality evaluation criteria for high-tech agriculture In order to understand the hindrances in agricultural credit financing process of commercial bank, the thesis used Importance-performance analysis Table 4.8 Evaluation criteria used in importance-performance analysis Credit Level of Symbol Evaluation Criteria service importance quality X1 Loan interest rate 4,37 3,11 X2 Loan procedure 4,37 3,31 X3 Loan approval time 4,60 3,17 X4 Maximum loan amount 4,67 3,17 X5 Loan term 4,60 3,32 X6 Loan disbursement time 4,64 2,73 X7 Diverse collateral type 4,65 2,15 X8 Evaluation collateral asset 4,73 2,92 X9 Process, loan application procedure 4,71 2,87 X10 Convenient location 4,52 3,76 X11 Don’t have additional fee 4,60 2,09 X12 Friendly credit officer 4,63 3,99 Average value 4,59 3,05 Source: from survey results 23 Figure 4: Research on importance – performance of bank credit service • N o Customer survey result about the efficiency of credit loan using Table 4.10 Customer research about the efficiency of credit loan using for high-tech agriculture Evaluate criteria Loan capital efficiency when investing on agricultural production Increase investment chance from loan Increased profits from loan Risk perception of loan interest Risk of expanding production with loan Willing to continue borrow for future investment and production Averag e 3,56 Standard deviation 0,59 4,01 3,93 3,65 4,39 3,76 0,41 0,44 0,66 0,84 0,54 Source: from survey results • Customer survey results on high-tech agriculture business activities • Survey result of the relationship between customers and other stakeholders in hightech agriculture business production • Survey result on current consuming channel for agricultural products 4.3.3 Discussing on research findings 4.3.3.1 From the survey results From the loan customers survey results received, the thesis noticed: First, participants in agricultural production hadn’t have much experience and necessary knowledge of high-tech agriculture production; Second, the biggest worry of customers when participating in high-tech agriculture production was lacking of capital; Third,the main loan using purpose was investing on infrastructure andequipment for production; Four, besides commercial bank credit capital, customers still used other capital sources such as buying on credit from suppliers and advance payment from customers 24 Fifth, the loan collateral assettypes of commercial bank weren’t diversified, mainly focusing on houses and real estate, not expanding on other types of mortgage forms yet Sixth, the customerswere very sensitive on loan interest rates, although their demand on bank credit capitalwere big If the loan interest rate of commercial banks increases, they wouldlooking for alternative capital sources Seventh, the majority of customers agreedon loan supportfor product producing and consuming; Eighth, the main reason that customersloan application weren’t approved was: (1) No collateral asset, (2) Insufficient production capacity, (3) Don’t know how to complete loan application procedure (4) Bad loan proposal and (5) The commercial banks was still not interested in this area Ninth, in terms of the difficulties during the loan process: (1) Collateral asses evaluation was low, (2) The loan term was too short, (3) Not many forms of collateral, (4) The loan amountwas usually lower than demand, (5) Approval time for loan application was long, (6) Required collateral asset and (7) Overly complex procedure Tenth, usingimportance – performance analysis of service, there are factors was in the area sorted by the level of importance descending Which was the evaluation of collateral asset, simple loan application procedure, expand collateral types, suitable time for loan disbursement and have additional fees This was hindrance pointsneed to be focusedand improved by the commercial banks 4.3.3.2 The role of commercial bank credit capital for high-tech agriculture production Survey on the effectiveness in using commercial bank’ loan credit, customers rated the level of efficiency at a fairly good level, with an average of 3.56 This result was also consistent with the studies by Boucher et al, 2007; Diagne et al, 2000; Nguyen Thi Tam, 2006; Nguyen Thi Hai Yen, 2016; etc.) 4.4 Quantitative research results about intention of credit granting behavioral from banks perspective 4.4.1 First research model result 4.4.1.1 The result of reliability analysis using Cronbach’s Alpha 4.4.1.2 The result of exploratory factor analysis (EFA) 4.4.1.3 Cronbach’ alpha reliability analysis result for new factor 4.4.1.4 The result of confirmatory factor analysis (CFA) 4.4.1.5 The result of saturated model 4.4.1.6 Structural equation modeling SEM 4.4.1.7 Estimating theoretical model using Bootstrap 4.4.1.8 Discussing the research results of the first model INT = 0.536ATT + 0.236NOR + 0,119 ATT = 0.425PU + 0.295EOU – 0.259RIS + 0.129 25 Figure 4.3 First research model result The research results on credit officers who had never granted credit for high-tech agriculture They didn’t have high awareness about the usefulness of high-tech agriculture credit granting The credit officers had no experience working with the high-tech agriculture production customers, so they were quite vague about the potential and benefits that these customers might bring In addition, they were also controlled by the policies and regulations from the government, local authorities and the bank where they worked In the process of analyzing the risk of credit officers who had never granted credit to high-tech agriculture, their concerns emphasized on (1) feasibility of the agricultural plan, (2) produce management ability and quality control ability, and (3) consuming chance for the product These concerns degraded the positive attitude toward high-tech agriculture credit granting intention; 4.4.2 The second model research results 4.4.2.1 The result of reliability analysis using Cronbach's Alpha 4.4.2.2 The result of exploratory factor analysis (EFA) 4.4.2.3 Cronbach’ alpha analysis for new factors 4.4.2.4 CFA result for multi-directional scales 4.4.2.5 Result of the measurement model 4.4.2.6 Research model calibration 4.4.2.7 Structural equation modeling SEM 4.4.2.8 Estimating theoretical model using Bootstrap 4.4.2.9 Discussing the research results of the second model The second model results can be described by following regression equation: INT = 0.562NOR + 0.31CONF + 0.262 ATT + 0.105 ATT = 0.397 CONF + 0.193EOU – 0.228RIS +0.279 26 Figure 4.4Secondresearch model result Research results for credit officers who had proposed credit granting for high-tech agriculture production showed that they were interested in whether this customer was preferred and facilitated in the credit procedure, evaluation and the application process The credit policies relating to high-tech agriculture, opinionsfrom leaders or colleagues, past experiences or other complex risk problems concerned them in the credit granting process for high-tech agriculture or other credit contracts About the risk assessment of credit granting for high-tech agriculture production, the credit officers hadgranted credit before, had a more detailed and profound view on the risks of high-tech agriculture credit granting process.Therefore, their Attitude towards high-tech agriculture credit granting was also more reserved The intention of continuing grant credit for high-tech agriculture of credit officers were dominated greatly by the opinion of the concerned people, such as their managers or their colleagues and by the policies of the government, their bank and the successful rate of previous credit contracts Because there wasn’tenough support in procedures, policies, implementation processes, and the interest of commercial banks leaders, the intention of continuing grant credit for high-tech agriculture production was impacted Chapter Four conclusion Chapter presented the first research results and discussions on the current customers’ access to credit and the hindrance of high-tech agriculture credit granting procedure These results had been discussed to come up with solutions in Chapter 27 CHAPTER FIVE: CONCLUSIONS, SOLUTIONS AND RECOMMENDATIONS 5.1 Assess the achievements, limitations and causes affecting credit for high-tech agriculture in Lam Dong Province 5.1.1 Achievements and limitations in credit granting activities for high-tech agriculture 5.1.1.1 Achievements in credit granting activities for high-tech agricultural First, although the loan sales of high-tech agriculture in 2012-2018 period wasn’t high, but there was a growth over the year, average 255.2 billion dong per year; Second, outstanding loan balanceofhigh-tech agriculture in Lam Dong Branches of commercial banks also had a rapid growth in 2015-2017 period; Third, the NPLs of high-tech agriculture in Lam Dong branches of commercial banks onlyaccounted for a very low percentage in the ratio of NPLs; 5.1.1.2 Limitations in high-tech agriculture credit granting activities First, the outstanding credit balance of high-tech agriculture in Lam Dong branches of commercial banks increased, but only focused in some branches of state-owned banks, the private commercial banks mostly weren’t doing lending business in this area Second, loans for high-tech agriculture were mainly short-term loan at commercial banks in Lam Dong Province The number ofmedium-to-long-term outstanding loan balance was not much; Third, the customer had access to soft loans for high-tech agriculture at commercial bank branches in Lam Dong Province pursuant to Decision No 813/QD-NHNN of the State Bank accounted for a very low percentage of total loans for agricultural in countryside area Fourth, high-tech agriculture loan sales proportion at commercial bank branches in Lam Dong Province accounted for a very low proportion (< 2%)of total agricultural in countryside area loan sales; Fifth, the outstanding loan balance to high-tech agriculture at commercial bank branches in Lam Dong Province was accounted for a very low proportion (