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Along with the growth of the economy, people''''s life have been improved, leading to consumer demand increasing. In addition to usual necessities such as food, houses, jobs; people are more interested in the quality of life such as the quality of their house, modern vehicles, facilities, traveling and even studying abroad. However, with the current income level, most consumers could not afford at the same time all their needs, especially for properties which have great values. That''''s the reason why needs forconsumption borrowing have been increased nowadays. Banking activity plays an important role on human and social life, especially the establishment and development of commercial banks in terms of quantity and quality of services. One of banking activities is lending activity. Lending activity is the most important activities which accounts for the largest portion of total assets but one of the riskiest activity of the bank. Therefore, enhancing lending quality is the target job of commercial banks. Lending activity is particularly crucial in assessing financial strength of customers in the business and customer repayment capacity. Enhancing the lendingquality means that financial status of commercial banks is also enhanced, creating strengths in the competition between each bank, helping banks avoid and limit the great risks and losses that may occur. It contributes to the health of lending relations and facilitates the expansion of lending relations. Lending quality determines the existence and development of each Commercial Bank in particular and the whole banking system in general. To make a lending decision, every banks must carefully consider risk and profitability based on the lending analysis process. Improving lending quality will contribute to the bank''''s business performance. During my internship at the Bank for Agriculture and Rural development Dong Da branch, I could access data on bank lending situation and understand about lending to individuals which is also one of the basic lending activity of the Bank. In my opinion, lending to individuals has brought a part of the income for the bank but the results achieve have been less than its capacity due to some difficulties. To resolve these issues as well as developlendingto individuals, Agribank Dong Da branch still have to research more and find the solutions to overcome the difficulties. After a time of internship in Agribank Dong Da branch at Small and Medium Enterprises department and also my time studying at National Economics University, I would like to choose the topic: "Enhancing lending quality to individuals at Agribank Dong Da branch"
NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATIONAL PROGRAM ======== BACHELOR’S THESIS FINANCE Topic: ENHANCING LENDING QUALITY TO INDIVIDUAL CUSTOMERS AT AGRIBANK DONG DA BRANCH TRUONG THI ANH THU HANOI, 2019 NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATIONAL PROGRAM ======== BACHELOR’S THESIS Topic: ENHANCING LENDING QUALITY TO INDIVIDUAL CUSTOMERS AT AGRIBANK DONG DA BRANCH Student: Truong Thi Anh Thu Speciality: Finance Class: Advanced Finance 57B Student’s ID: 11154215 Supervisor: PhD Truong Thi Hoai Linh HANOI, 2019 ACKNOWLEDGEMENTS I would like to acknowledge the following people for their support and assistance with this internship First I am very grateful to the support from the Board of Directors, my seniors and colleagues in Accounting Department of Agribank Dong Da branch during my project work Another faithfully thanks word I would send to my instructor – PhD Truong Thi Hoai Linh for helping me with my report in not only structure but also content thoroughly TABLE OF CONTENT STATUTORY DECLARATION I herewith formally declare that I myself have written the submitted Barchelor Thesis independently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper I clearly marked and seperately listed all the literature and all other sorces which I employed producing this academic work, either literally or in content Hanoi, 20/05/2019 Trương Thị Anh Thư ABBREVIATIONS Agribank: Vietnam Bank for Agriculture and Rural Development BOM: Board of Management CIC: Credit information center LIST OF TABLES LIST OF FIGURES Figure 2.1: Organization chart of Agribank Dong Da branch Figure 2.2: Structure of mobilized capital by term Figure 2.3: Structure of mobilized capital by economic sector Figure 2.4: Structure of mobilized capital by type of money INTRODUCTION Rationale Along with the growth of the economy, people's life have been improved, leading to consumer demand increasing In addition to usual necessities such as food, houses, jobs; people are more interested in the quality of life such as the quality of their house, modern vehicles, facilities, traveling and even studying abroad However, with the current income level, most consumers could not afford at the same time all their needs, especially for properties which have great values That's the reason why needs for consumption borrowing have been increased nowadays Banking activity plays an important role on human and social life, especially the establishment and development of commercial banks in terms of quantity and quality of services One of banking activities is lending activity Lending activity is the most important activities which accounts for the largest portion of total assets but one of the riskiest activity of the bank Therefore, enhancing lending quality is the target job of commercial banks Lending activity is particularly crucial in assessing financial strength of customers in the business and customer repayment capacity Enhancing the lending quality means that financial status of commercial banks is also enhanced, creating strengths in the competition between each bank, helping banks avoid and limit the great risks and losses that may occur It contributes to the health of lending relations and facilitates the expansion of lending relations Lending quality determines the existence and development of each Commercial Bank in particular and the whole banking system in general To make a lending decision, every banks must carefully consider risk and profitability based on the lending analysis process Improving lending quality will contribute to the bank's business performance During my internship at the Bank for Agriculture and Rural development Dong Da branch, I could access data on bank lending situation and understand about lending to individuals which is also one of the basic lending activity of the Bank In my opinion, lending to individuals has brought a part of the income for the bank but the results achieve have been less than its capacity due to some difficulties To resolve these issues as well as develop lending to individuals, Agribank Dong Da branch still have to research more and find the solutions to overcome the difficulties After a time of internship in Agribank Dong Da branch at Small and Medium Enterprises department and also my time studying at National Economics University, I would like to choose the topic: "Enhancing lending quality to individuals at Agribank Dong Da branch" Objectives - Clarifying some basic arguments about credit, credit for production households, experience to improve credit quality for individuals of some commercial banks - Analyzing and assessing the real situation of lending to production and individual households at Agribank Dong Da branch in the period of 2014-20178, thereby drawing the positive as well as the limitations of lending to with individuals at Agribank Dong Da branch - Proposing orientations, solutions and recommendations to improve credit quality for households and individuals at Agribank Dong Da branch Methodology Analysis method: the author uses the method of general analysis, comparison methods, comparisons, interpretive methods, inductive and economic statistical methods to study the thesis topic Scope Research object is credit quality for individuals at Agribank Dong Da branch Scope of research: Lending activities to individuals at Agribank Dong Da branchin the period from 2014-2018 Research structure In addition to the introduction, conclusion, references, list of tables and abbreviations, and dissertations are structured into 03 chapters: Chapter 1: Overview of lending quality to individuals at commercial banks Chapter 2: Current situation of lending quality to individual customers at Agribank Dong Da branch Chapter 3: Solutions and recommendations to enhance lending quality to individual customers at Agribank Dong Da branch from 2019 to 2025 10 to loosen lending conditions - Evaluating and determining the level of risk according to each product, industry and field to implement the maximum lending limit control for a number of branches and domains Continuing to strictly control lending activities in the areas of real estate, securities and consumer lending; promoting the evaluation, analysis and identification of target customers and groups of customers according to the following criteria: Customer ratings, charter capital, total liabilities / equity, the ratio of collateral assets total outstanding loans, guarantees, the level of customer policy response, especially the ability to repay customers' debts to take appropriate measures - Absolutely compliancing limits and assigned lending structures - Assessing the status of collateral assets (legality, availability, effectiveness of management measures ), improving the quality of loan security assets to minimize losses when lending risks occur - Strengthening the inspection, lending management, the lake ensures loan debt in accordance with instructions 3.1.2 Development goals The above are the general development orientations of the bank as well as the orientation to improve lending quality in general and household and individual lending in particular Below are some of the bank's specific spending goals for the coming year: - Service revenue accounts for 25% of total revenue - Capital source increased from 12-15% - Outstanding balance increased by 8-10% - Bad debts below 1% - Rate of loan interest collection over 90% 3.1.3 Orientation of developing individual lending of Agribank Dong Da branch to 2025 Based on the orientation of business activities of Vietnam Bank in 2018 and the following years Derived from the actual situation: The urbanization rate in the country in general and in Hanoi city in particular is increasing and the trend of developing individuals in urban and cities is increasing Traditional craft villages 49 that have been recovering and developing strongly are demanding a significant amount of capital for cútomers Since then, Agribank Dong Da branchhas determined the lending development orientation in the coming time: Maintaining traditional customers, and focusing on lending transfer to customers of households, individuals and medium enterprises and small to expand market and disperse risks in lending activities, promoting and expanding customer network, develop associated services Increasing the number of individual customers at 50% The proportion of individual outstanding loans accounted for 20-25% of total outstanding loans, in particular 2019 growth of 200 billion individual outstanding loans 3.2 Solutions for enhancing lending quality to individuals in Agribank Dong Da branch Lending activities are the main and professional activities that bring income to the bank, thus improving the efficiency, quality, managing lending risks must be further tightened in the economic situation The economy has many adverse fluctuations and fiercely competitive environment In order to get the best results and achieve the expectations in the future, Agribank Dong Da branch must implement some solutions such as: 3.2.1 Improving the qualifications of staff and employees, planning to develop human resources People are always a decisive factor in all economic, political, social activities in general and in lending activities in particular All lending decisions, the process of lending, debt recovery have no machinery or tools other than credit officers Therefore, lending results depend greatly on professional qualifications, creative dynamics and professional ethics of credit officers Agribank Dong Da branch is a bank with a majority of staff with university, college and post-graduate qualifications trained in banking However, in reality due to the complex nature of the market economy, the complexity and difficulties in lending, the staff now cannot meet the demands of customers in time The fact requires credit officers to always learn, cultivate professional knowledge and other general knowledge on a regular basis Therefore, in order to enhance lending quality, the Bank should also set up policies to develop human resources and take care of the training to improve the professional qualifications of officials with some measures such as: 50 - Specialization of credit officers: Each credit officer will be assigned to be in charge of a certain group of customers, having common characteristics in the business line The grouping depends on the capabilities, strengths and experiences of each credit officer Thereby, credit officers can deeply understand customers, focus on one of their jobs and reduce costs in investigating, understanding customers, reducing errors in the appraisal process, contributing to improve lending quality in lending - Training skills: The bank needs to train credit officers according to skills such as communication skills, investigation skills, analytical skills, writing skills, negotiation skills - To have a rational reward and remuneration mechanism for credit officers and strict punishments: credit officers who lack responsibility, cause capital losses, and violate the mechanism should be strictly handled, especially for credit officers who have negative behaviors affecting the Bank's interests Depending on the extent of application, disciplines such as transfer of other jobs, suspension and dismissal can be applied In addition to raise the responsibility of the Bank officials, there must be a reward regime for with officials with outstanding achievements in lending operations This is an important job to solve the situation of credit officers "afraid" of lending Due to the psychological factors of credit officers, if the loan collection of hundreds of billions of VND is not complimented or increased, but only an overdue arising is criticized, handled and considered weak 3.2.2 Focusing on customer policy and marketing In a market economy, customers increasingly have a wider choice, require higher quality and desire to receive greater value for the money they spend Therefore, the Bank must be increasingly interested in developing relationships with customers instead of customers finding themselves to the Bank as before Currently, Agribank Dong Da branch is implementing customer policy to promote its image The employees of the Bank are also marketing employees, they have provided products and services that both attract customers in the attitude of affection and understanding of the Bank's own products as well as society, grasping very quickly to catch the needs of customers to the Bank This policy has been effective in enhancing the lending quality to individuals of Agribank Dong Da branch, the lending balance increased, the lending market share in the province increased However, the Bank does not have specialized departments, specialized staff in customer work and product advertising marketing, market access In 51 customer policies, the main object that the Bank best meets the lending needs of corporate customers Agribank Dong Da branch has not fully met and missed many other lending needs of other customers such as: individual customers, production households Therefore, in order to further improve the reasonable customer policy, the Bank should strengthen customer work, expand customer in the following ways: - Organizing conferences for customers who are businesses and individuals who are having lending relations with traditional branches and conferences Thereby, the Bank can draw experience from the comments of customers, propagate extensively on Agribank Dong Da branch and the benefits of customers when they borrow at the Bank, as well as approach new customers - Currently, individuals' lending accounts for a very small proportion of the branch's lending activities, so the branch should expand the object of individuals Subjects of "traditional" individual customers or individuals with mortgages and state employees have stable incomes, banks need preferential policies to attract them to the bank by adding more goods and use different banking services In Dong Da district and Thanh Xuan district, those who have demand for loans such as small business, business, private companies, joint ventures, foreign companies are very large, among them Many people not only have a stable income but are also quite high It can be said that this is a potential customer market that the bank has left open After all, the creditors that the bank branch aimed at are those with stable incomes and solvency Therefore, this is a huge source of potential customers that the bank needs to have policies to exploit to expand its consumer lending activities Indeed, small business households often have large capital and their consumer loans are a temporary support when the money is still frozen on goods and they are fully capable of repaying the debt and on time for the bank Non-state enterprises have many units working ineffectively, but there are many large, long-term and prestigious enterprises in the market With their capabilities and experience, the bank makes consumer lending aimed at those with long-term contracts in these reputable businesses that have a basis without fear that they cannot recover the debt The method of lending to this group of customers may be the granting of installment personal lending with that enterprise's trust Specifically, the bank can contact the market management board, economic political - social organizations in the ward, and trade unions to organize a seminar for all those in borrowing, having real interest in individuals lending In this seminar, the bank only needs one to two credit officers to introduce the system of 52 individuals lending services, and guide the process and explanation of interest payment, loans, deadlines, loan rates, disbursement and debt collection methods, and answers to other questions This activity will help banks get closer to customers, eliminate the concern to customers' banks, thereby encourage customers to use the bank's utility services in general as well as credit operations Moreover, it always takes the purpose of using capital and using capital effectively as a basis for lending, so it is not too important to pay attention to security assets as this will create a psychological dependence in the appraisal and assessment of loan effectiveness of cutomer This greatly affects the lending operations of the branch because it may miss many potential customers, besides, customers indirectly lose the effective business investment opportunities of customers - real people the need of bank help, thereby not encouraging customers to come to the bank 3.2.3 Studying to improve interest rate policy Interest rates are an important factor in making loans by Commercial Banks An appropriate interest rate policy will attract customers and increase lending balance, increase competitiveness, increase income for the Bank In order to have an effective lending interest rate policy, the Bank staff must understand the actual interest rate and the trend of a reasonable lending interest rate Over the past years, the Bank has been applying a flexible interest rate policy for borrowers and loan sizes, such as interest rate incentives for first-class customers Second-class customers have reduced interest rates for high-value loans However, the interest rate policy of the Bank still has things that are not flexible Therefore, Agribank Dong Da branch should expand the various interest rates according to time and customers, the Bank's use of products, and interest rate incentive policies for new customers Besides, based on the nature and characteristics of each business sector, Agribank Dong Da branch can apply different interest rates With a suitable and flexible interest rate policy, there will be more and more customers coming to Dong Da Bank 3.2.4 Improving quality of appraisal work Improving the effectiveness of the appraisal process to determine the effectiveness of lending later because the evaluation process will result in acceptance for borrowers In order to good appraisal, the most important thing is to collect information about customers Collecting information from various sources 53 such as interviewing borrowers, bank books, business situation of borrowers, sources of information from services, supply agencies information and from other sources Currently there are many sources of information with mixed accuracy Therefore, it is difficult for banks to choose which information is correct Agribank Dong Da branch mainly collects information from customers through direct exchanges, reporting of business results and there are also cases where the bank assigns its officers to the place of production and business of customers However, if you only collect information from customers, it is not highly reliable because we know that customers always want to borrow from banks quickly so dishonest events often occur when collecting information Therefore, banks need to expand the scope of collecting other information sources but must be selective to avoid the "dilution of information" The bank should pay attention to the following sources: - Attention should be paid to appoint staff with professional knowledge of the Bank and having professional knowledge of the field of business that customers are doing, to the production areas of customers Combined with the information provided by customers such as financial statements of production and business situation - The bank needs a separate department to manage the client's paperwork, even for temporary customers who not have lending relations with the Bank This will also be an important source of information in many necessary cases - Focusing on mass media because this is the most objective source of information On the other hand, the Bank needs to have regular cooperation and exchange with other organizations, agencies, local government organizations and keep a good relationship with customers because sometimes they can provide precious information Therefore, the task of collecting information is very complicated, so the Bank should set up a lending information department for itself This not only works well for the appraisal process but also helps the whole lending process of the Bank in limiting lending risks, improving the efficiency of lending 3.2.5 Improving inspection and control activities of the Bank Enhancing the role of inspection and control is very important work to ensure loan quality Therefore, when the Bank extends lending investment to improve lending quality in lending, the role of inspection and control must be raised at a corresponding level 54 Through the process of checking and supervising loan capital, the Bank must regularly assess the creditworthiness of customers If detecting that customers provide false information, violations then the Bank must handle according to its rights and obligations under the decision of the law This is very necessary because in the process of using the loan of the customer can also over time to reveal certain shortcomings Therefore, it is necessary to monitor borrowers to keep track of possible risks to take appropriate measures to minimize lending risks In fact, the monitoring of customer loans depends on the capabilities, qualifications and specific conditions of credit officers Especially in the present condition, reporting data of customers with low reliability is out of control of the current mechanism Therefore, it is necessary to increase the effectiveness of monitoring loans in the operation of the Bank with the need for a separate monitoring program, the staff of this department must be able to assess lending performance at both both customers and banks These workers are not related to lending and debt collection activities The task of this department is to assess the situation of lending operations in general and lending quality in particular to recommend to leaders at all levels to establish a risk prevention system that can occur with business activities In addition, the Bank needs to increase the internal inspection and control work of the Bank in order to purify the creditors who lose quality, negativity, cause loss of assets and discredit the Bank 3.3 Some recommendations 3.3.1 Proposing to the Government The operation of the economy in general and the banking industry in particular is under the management and control of the State, the legal environment as well as the system of policies Therefore, in order to improve lending quality for producers and individuals in particular, the bank needs the support of the State through some of the following suggestions: 3.3.1.1 Perfecting macroeconomic policies, building a healthy economic environment, a clearer legal environment, facilitating development of the banking industry A complete and effective legal environment will help to manage and promote business activities of production households, individuals and banking credit activities in a healthy and efficient manner - Completing legal documents and administrative procedures related to 55 overdue debts and handling assets to ensure overdue debts Currently, the problem of overdue debt handling to strengthen the financial situation of banks is a rather pressing issue because of slow processing speed and low efficiency The main reason is not from the bank, but due to the handling process, there are some shortcomings and problems because of unclear regulations, causing damage to the bank When banks have to hold a huge block of assets, the value decreases over time Meanwhile, the capital is not recoverable, but the bank still has to pay the mobilized interest from deposits, and the cost to look after and preserve those collateral assets - Completing the legal framework in building a national database on population and soon implementing the issue of national identification numbers By November 2017, there were only nearly million identification numbers granted to citizens over 16 localities; 700,000 identification numbers are issued for newborn babies in 17 localities The current management of the population is backward, basically crafts, making the implementation process difficult because of the situation of free migrants, lack of management in many aspects This will make It is difficult for banks to manage their borrowers in case customers cannot pay their debts and leave their residence The management of population needs to be reformed in a more modern way and sanctioned when detecting that people not announce the temporary residence registration at the new place - Building sanctions in case customers not pay debts The decision of the court only stopped asking customers to fulfill their debt repayment obligations to the bank, which led to a stagnation in the repayment process of customers Therefore, the State should have more deterrent sanctions such as suspended imprisonment or imprisonment when customers cannot repay the bank debt or deliberately stagnate in paying the bank debt This will make customers more responsible for fulfilling their debt repayment obligations to the bank, while helping the bank minimize the risk of lending development 3.3.1.2 Creating a favorable investment and business environment for private economic development, including indivduals The government needs to ensure a stable macroeconomic stability, control inflation at a reasonable level, manage proactive and flexible monetary policies according to the market mechanism Ensuring stable interest rates and exchange rates, consistent with macroeconomic conditions and the market Promoting 56 restructuring the system of credit institutions associated with handling bad debts; encourage capital investment in the private sector, including individuals Expanding the ability to participate in the market and promote fair competition Reviewing and eliminating mechanisms and policies to create inequalities between the private economy and other economic sectors; among the subjects of the private economy, especially in competition and access to social resources, production factors, business opportunities, market entry, whose focus is on land, capital and resources gorvernment's Enhancing transparency for state monopolies, enterprise monopolies and monopoly of business control; ensure healthy competition in the market To concentrate on quickly developing a synchronous and modern infrastructure system in order to support production and business and create favorable conditions for the private economy to approach and use smoothly and equally with reasonable costs as well as ensuring publicity and transparency Creating favorable conditions for the private economy to access land and resources in a transparent and equal manner according to the market mechanism for production and business; restructuring and developing quickly, safely and effectively financial markets, especially credit institutions and capital markets, creating equal and favorable conditions for the private sector to access capital; developing strongly and smoothly the goods and service markets; having mechanisms and policies to create conditions for the private economy to actively participate in the process of international economic integration 3.3.1.3 Further promoting the role of customer information center (CIC) With over 25 years of operation, CIC has built a modern national lending information system, developing both in width and depth, thereby contributing positively to the direction and administration of The State Bank of Vietnam, effectively supports business activities of commercial banks, promotes access to lending of borrowers and contributes to the safe and healthy development of the Vietnamese banking system However, with the requirement of stricter management of lending activities of the State Bank and the requirement of international integration, CIC needs to continue to innovate to overcome the shortcomings, and to fully exploit the utility and the operational efficiency of the new information technology and professional system, as well as diversifying types of services, methods of providing information enabling information operators to use the 57 quality service with more reasonable cost 3.3.1.4 Strengthening lending management measures Modifying and supplementing specific and clearing mechanisms, regulations and sanctions to create a complete legal framework for lending activities The State Bank must have effective measures to force commercial banks to strictly implement the mechanisms and regulations Errors and violations must be handled seriously and promptly Creating favorable conditions for the operation of commercial banks through improving the operational efficiency of the interbank market, the banking association as well as improving the quality and effectiveness of risk prevention information work of Credit information center (CIC) 3.3.1.5 Supporting commercial banks in debt handling Measures to support commercial banks in handling debts as follows: - Strengthening the operation of Asset Management Company of the State Bank of Vietnam and debt management and asset exploitation companies of credit institutions - Strengthening inspection and control of lending activities of commercial banks Enhancing the effectiveness and efficiency of management, inspection and supervision in order to detect in time and minimize mistakes, especially serious mistakes in monetary and banking activities, contributing to strengthening the People's news for the banking system 3.3.2 Recommendations for Agribank Branches of Bank is a part of Agribank system, all operations of the branch are directly affected by the policy, orientation and operation of Agribank In order to enhance lending quality to individuals, the Bank should pay attention to the following issues: - Do well the training and retraining staff in an intensive way, ensuring the improvement of staff qualifications, especially credit officers in order to meet the requirements of developing qualified and high-quality human resources and receive regular training to keep up with the development trend of business operations in the market Regularly organizing credit seminars to enable credit officers of branches to exchange working experiences and improve their qualifications Paying attention to professional ethics education for officials to minimize the situation of 58 embezzlement, abuse and personal profiteering - Reviewing the mechanisms, policies and processes related to credit to individuals and advise and propose amendments and supplements accordingly Continuing to improve processes, lending methods, reduce costs, simplify procedures Promulgating mechanism of operation organization, capital operating mechanism, interest rate mechanism suitable to the size and characteristics of the branch in order to enhance the autonomy and clearly assign responsibilities in business operations, promote maximizing the role and position of each branch in the whole system Strengthening close coordination with local authorities and unions in solving difficulties and obstacles on borrowing limits, repayment periods, mortgage assets, especially in the use and collection loan repayment - Further promoting the effectiveness of the Center for Prevention and Risk Management to provide timely and accurate information Collaborating closely with CIC of the State Bank to improve quality and expand, multi-dimensional information scope, to help branches prevent risks in the best way - Deploying lending analysis to take sustainable lending growth measures by region and branch Completing and implementing the project of expanding the size of individual lending to cities, Hanoi and Ho Chi Minh At the same time through lending analysis will facilitate the improvement of lending quality - Strengthen internal inspection and control throughout the system to promptly detect violations in the operation of branches and personnel Reviewing and timely correcting errors detected through inspection 59 CONCLUSION OF CHAPTER The content of chapter raised the orientation of business activities as well as specific objectives of Agribank Dong Da branch in the coming years Since then, chapter raises the need to improve the quality of individuals lending at the bank, the establishment proposed solutions and raised specific solutions such as: Training and developing human resources, expand marketing and customer care activities, increase investment in technical facilities At the same time, chapter also raises some recommendations for the State Bank and for Vietnam Bank for the purpose of contributing to raising high quality of lending to individuals at Agribank Dong Da branch 60 CONCLUSION Enhancing quality is a vital issue for commercial banks in general and Agribank Dong Da branch in particular Agribank Dong Da branch with lending activities and the role and function of a large bank branch in the capital area has made positive contributions to the development of the area The amount of credit capital supplied to grow each year has contributed to meeting the capital demand for production and business activities Total outstanding loans, especially short-term outstanding loans of the branch are increasing, customers are not only large enterprises, small and medium enterprises but also individual customers are increasing Lending quality has been gradually improved, increasing the efficiency of capital use and increasing income for the branch With many practical measures, the Branch has attracted a considerable amount of capital mobilized from the population in order to proactively meet the demand for investment capital At the same time, the branch also pays great attention to checking, approving before lending, closely monitoring loans to limit the level of risk, ensuring safety for loans On the basis of applying research methods, sticking to the research objectives and scope, the thesis has completed the following tasks: - Learning the basic arguments about credit quality and the role of credit in general and individuals in particular in the socio-economic development, factors affecting credit quality - General research thesis on organization and operation of Agribank Dong Da branch, analyze and explain the real situation of credit quality in Agribank Dong Da branch, thereby assessing the reasons for the problems - Based on the assessment of credit quality situation in Agribank Dong Da branch, the thesis has proposed a number of solutions to improve the lending quality to individuals for Agribank Dong Da branch In lending activities, Agribank Dong Da branch has achieved remarkable results However, besides the initial successes, Agribank Dong Da branch is also facing many difficulties, challenges and shortcomings, including credit quality problems due to many reasons Both objective and subjective, requiring the Branch to consider and overcome to improve operational efficiency and continue to develop more, deserving to be one of the major banks in the Agribank system Dealing with bad debt in the banking system is particularly concerned by the 61 Government and the whole society because it is the main cause of congestion in the credit flow in the economy Therefore, enhancing lending quality is a big problem, so despite the best effort but due to the limited time and research capacity, the issues raised are still many shortcomings, I hope receive the comments of teachers and bank officials to improve their topic 62 REFERENCES The State Bank of Vietnam (2001), Decision No 1627/2001/State Bank dated December 31, 2001 of the State Bank Governor promulgating the Regulation on lending of credit institutions to guests line State Bank of Vietnam (2013), Circular No 02/2013/State Bank dated January 21, 2013 of the Governor of the State Bank of Vietnam regulating the classification of assets, deduction levels and deduction risk provisions and the use of reserves to handle risks in operations of foreign credit institutions and bank branches; Circular 09/2014 / State Bank dated March 18, 2014 of the Governor of the State Bank amending and supplementing a number of articles of Circular 02/2013 / State Bank Vietnam Bank for Agriculture and Rural Development - Dong Da Branch, Summary report on business activities in 2014-2018 Vietnam Bank for Agriculture and Rural Development, Decision No 839 / Agribank dated May 25, 2017 of Agribank's General Director on the lending process for individual customers in Vietnam Agriculture and Rural Development Vietnam Bank for Agriculture and Rural Development, Decision No 226 dated March 9, 2017 of the Chairman of the Members' Council on the Regulation on lending to customers in the Vietnam Agriculture and Rural Development Nguyen Thi Mui (2004), Profession of Commercial Bank, Statistics Publishing House, Hanoi Phan Thi Thu Ha (2009), Administrator of Commercial Bank, Statistics Publishing House, Hanoi Vu Van Thuc (2014), Development of consumer lending at Vietnam Bank for Agriculture and Rural Development 63