LV Thạc sỹ_Develop the consumption lending at Vietinbank

1 Chapter Introduction 1.1 Rationale In recent years, Vietnam's economy has made steady progresses on the path of integration and development Along with the development of the country, the banking system in Vietnam has made considerable strides Banking system has been renovated from organizational structure to the business activities The banking industry is more and more expanded and diversified Besides the traditional service, commercial bank is growing many modern banking services with the trend of industrialization and modernization One of these services is consumption credit Along with the strong development of the economy, people's lives have improved dramatically, the demand for living expenses increasing, which is favorable for the development of consumer loans With a huge population of 85 million people with thr sustainable economic growth, the market for consumer loans is extremely large and full of potential As the current strongly economic growth, the market for consumption loans is extremely large and full of potential After a period of time practicing and learning at Vietinbank Hatinh branch, I see though the Bank is operating products and services on consumption credit, the scale of this activity is still small In fact, in recent years the Branch has started paying close attention to the expansion of consumption lending activities Therefore it’s necessary to research and propose solutions to expand consumption lending in both theory and practice For the facts above, I decide to make an in-depth research on the topic "Develop the consumption lending at Vietinbank, Hatinh branch” 1.2 Research methodology With my topic, I use several methods to support for research process - Statistic and collecting information method from secondary data sources: Vietnam law and regulations, website of Vietinbank, Vietinbank Hatinh annual report, - Vietinbank Credit Policy Manual, economic e-magazines Research method: o Statistic quantity analysis method o Comparison, descriptive o Summary method 1.3 Research scope - Object of research: Thesis research focus on performance of consumption credit Vietinbank – Hatinh branch - Scope of research: Current situation of consumption credit of Vietinbank – Hatinh branch in the period of three years 2009 – 2011 1.4 Research structure The thesis includes parts: Chapter Introduction Chapter Literature review of consumption lending in commercial bank Chapter Analysis of data of consumption lending at Vietinbank, Hatinh Branch Chapter Recommendation for developing consumption lending at Vietinbank Hatinh Chapter Literature review of consumption lending in commercial bank 2.1 Definition and characteristics Consumption Lending is credit relations between banks (lenders) and the individuals and households (the borrowers) to finance the borrower’s consumption of products goods and services when they not have the ability to pay This bases on the principle that borrower will repay the principal and interest at a specified time in the future Consumption loans to consumers to help consumers to use goods and services before they can afford, so they have a chance to enjoy higher standard of living Along with the strong development of the economy, people's lives have improved dramatically, the demand for living expenses increasing, which is favorable for the development of consumer loans With economic growth strong as the current open market for consumer loans is extremely large and full of potential As the current strongly economic growth, the market for consumption lending is extremely large and full of potential Demand for consumption lending are very diversifying, mainly for the purposes of housing, study, car buying, health care, travelling and so on Consumption lending help the borrowers enjoy the convenience before accumulating enough money, especially in the case when they need money for the urgent expenditure As a form of lending, consumption lending also has general features of loans, such as objects, rules of loans, income and risk from the loans In addition, consumer debt has the following specific characteristics: - Borrowers: Individuals and households Purposes of loans: to serve need of individual consumption, not business purpose Small scale but large number of quantity of loans: The consumers ussually accumulate a partial amount of money before intending to purchase high-value assets, and in general the banks require customers to pay a part of the expenditure and the bank will bear for the rest Another reason is that the cost of product or services are - relatively low compared with the capital statute of the bank High level of risk: the first reason is that since the borrowers’s ability to pay back the loan totally bases on their income; therefore, in the cases that the borrowers die, get sick, be out of work or even run away, the bank will meet trouble in recover the loans In addition, some type of loans for abroad studying, housing which have long term and fixed interest rate, so the bank may face the interest rate risk when the capital mobilization cost increases In contrast, the object of business lennding is the organizational entities as companies, which have clear and stable financial situation compared with individual objecives Therefore the bank’s control of credit risk to - business lending is quite easy compared with consumption lending Cost of appraising the loans is high: in general the consumption lending have small amount while large quantities, so it takes much time and human resource of bank to cover all steps of lending procedure including customer evaluation, disbursement, customer mornitoring and debt recovering Overall, the cost consumption loans are - high compared with other kind of loan High interest rate: High cost and high level of risk make customer must pay high - interest rate for this type of loan Be elastic with the economic cycle: the demand of consumption lending is affected by the economic sitution In the recession period and the people feel richer and optimistic about the future, so they need more money to consume In contrast, in the depression period, the peolple tends to tighen their expenditure then the demand for the consumption loan decreases 2.2 Functions of consumption lending * For commercial banks: Consumer lending is a good way to expand the credit markets, expanded its relationship with customers, diversified business activities and implementation of risk diversification * For consumer: finance consumer spending needs of consumers, such as purchases of consumer durable housing, car or pay the necessary and important need such as hospital, school fee * For the manufacturers: Consumer lending stimulate increased demand for goods and services, thereby increasing market size for goods and services * For the economy: Consumer lending is an effective lever for government stimulus 2.3 Classification of consumption lending To give the bank the conveniences in management and give the borrowers various choices that meet their diversified need, the consumption lending is classified into many types as their characteristics 2.3.1 Classification based on term of loan - Short term loans: the loans that last less than year which usually used for emergency need of fund Short-Term lending is less risky compared to long -Term one, because of its nature on the timing of its debt that's due Therefore, it requires a lower interest rate than Long-Term debt to compensate its risk - Medium and long term loans: the loans that last more than year The purposes of this kind of lending usually to finance the purchasing of high value assets like house or transportation or other requirement such as house repair or study abroad 2.3.2 Classification based on payment method: There are types: Payment by installments: The loan is repaid over time with a set number of scheduled payments This form is used in the case that the loan have big value or the borrower have no ability to pay in one time In general the installment loan is applied the most commonly One-time payment: both principal and interest rate are paid one time at the end of the term This form usually applied for the loans which have small amount such as studying, travel and hospital fee Revolving consumer lending : the bank issue the credit cards or overdraft check for the borrowers which base on the customer’s current accounts 2.3.3 Classification Based on method of securing loans: - Loans secured by assets: is a loan that the borrower must have collateral / pledge to ensure that they will comply with the obligation to pay principal and interest to the bank - Unsecured loan: this is a loan that is guaranteed not by collateral but by the confidence of banks to borrowers In another way, unsecured debt refers to debt that is not linked to a physical asset A good example of unsecured debt is a credit card 2.3.4 Classification based on the types of assets are funded: - Financing real estate is the new loan to buy or repair houses, apartments and land - Finance for consuming durable goods: the purchase of loans on cars, household appliances - Funding needs to spend another: that the loans meet the demand for travel expenses, school, hospital fees 2.3.5 Classification based on method of lending: - Directly consumption lending: the the bank directly exposure to the borrowers and collect debts directly from them Direct consumer loans is shown in the diagram below: Bank Retail seller (3) (1) (5)) (2) (4) ) Consumers Diagram 2.1 : Process of direct consumption lending (1) Bank and consumer sign loan contract (2) Consumers paid money for a retail company (3) The Bank paid the outstanding balance for retail companies (4) deliver the property company for consumers (5) Consumers pay for bank loans This form has the following advantages: The loan officers have an importance role to the quality of loans The direct lending between banks and customers lets the banks can use the qualification, knowledge, experience, and skills of credit officers, so it’s more safety than the indirect lending through retail businesses Furthermore, because of the direct relationship between banks and customers , it is easier for the bank in satisfying the interests customers and itself than that of indirect lending Besides, this is a good way to enhance and promote the image of the bank to the customer However, the types of loans also have some drawbacks: because bank officers have to work directly with customers , so it takes more time and cost compared with indirect forms of lending, especially to large customers at the same time will take difficulties for banks - Indirect consumpion lending: method in which the bank loan to buy the debts incurred by companies subject to retail sales of goods or services to consumers This form of bank loans through the sale of businesses goods or services without direct contact with customers Indirect consumer loans is shown in the diagram below: (1) Consumers Seller (2) (5) (3) (4) Bank Diagram 2.2 : Process of indirect consumption lending (1) The retailer and the consumer signed the contract of sale subject goods, the buyer paid (2) Company deliver the property to retail consumers and prepare documents of goods sold on credit (3) The allocation of retail goods sold on credit vouchers to the bank was set up as collateral (4) payment bank balance for retail companies (5) The consumer loan payments as agreed in the sale documents subject to the bank This type of loan has the following advantages: First, the banks can easily extend and increase loan sales Second, the banks will reduce the loan costs such as customer evaluation or customer monitoring cost Third, as a basis for expanding relationships with customers and creating favorable conditions for other activities of the bank Finally, if banks have a good relationship with the retail business, the form of indirect lending will has lower risk levels than the direct lending However, this type of lending also has limitations: Since the bank doesn’t get in touch with the borrowers, there is many inconveniences in overseeing and supervising the payment of customers The retail business of goods and services usually pay attention to increasing sales rather than quality loans Therefore, they often make lending decisions quickly, should lead to a level of loans that are not justified well Moreover, it’s lack of control of the bank both before, during and after the loan, when businesses make retail sales of goods and services Last, technical and business processes of these types of loans are complex 2.4 Developing of consumption lending of commercial bank 2.4.1 Definition of developing of consumption lending Development is the progressive process of all aspects of an issue in a certain period of time, including both the increase in scale and the progress of aspects surrounding In other words, development is the process of growing in both terms of quantity and quality Therefore, Developing of consumption lending of commercial bank is the progress of quantity and quality of the credit for consuming in commercial bank 2.4.2 Criteria to evaluate the development of consumption lending 2.4.2.1 Development of consumption lending under the perspective of quantity: * The growth rate for consumption lending is the increase in size, output over a period of time At commercial banks, consumption credit growth is one important criteria for market domination, and increase profits Growth in consumption debt is calculated by relative and absolute numbers of the volume of consumption loans as compared to the previous period Absolute numbers means the scale of lending Relative rate means the fast or slow or no growth In assessing the growth rate for consumer loans, banks usually target "growth rate consumer loans." This indicator is defined as follows: Based on the numbers and the speed increase (decrease) of the above targets through the year will reflect the scale and trends of the investment credit is extended or contracted * The variety of products for consumption credit Diversification of lending products for consumption is the wide range of loan products to customers to satisfy the their demand, while keeping traditional customers, and constantly expanding new customers in the market, thereby increasing revenues and profits Diversification 10 increases the total outstanding credit, contributing to higher profits for banks and implementing risk diversification Therefore, diversification of forms of consumer lending is that banks aim to be reached in the development of consumption credit * The proportion of consumption lending in total loans of bank credit will reflect the scale of consumer lending bank The proportion of consumption credit increased proven consumer lending activities are focused at the development bank This criterion is defined: *100% If this ratio is high, consumption lending activity at banks are developed 2.4.2.2 Development of consumption credit under the perspective of quality: * Interest income The proportion of interest income from consumption credit increased or decreased over the years reflect the scale and trends extended by commercial banks This criterion is defined: * The rate of delinquency 40 41 2009 2010 2011 Consumption bad debt 0.14 0.88 1.39 Consumption bad debt/ Total bad debt 72% 84% 65% Consumption bad debt/ Total comsumption debt 0.20% 0.92% 0.65% (Source: Business reports of Vietinbank Ha Tinh 2009- 1011) Table 3.10 bad debt ratio in some bank Bank 2010 bad debt ratio 2011 bad debt ratio Source : internet The bad debt mentioned on above tables include categories 3,4 and Although the consumption non-performing debt of the branch contributed to the majority of the total bad debt, the bad debt ratio was still kept at low level ( less than 1%) compared with other banks in Vietnamese market ( table 3.10) Particularly, In 2010 the consumption bad debt ratio was highest at 0.92% which occupied 84% of the branch’s non-performing loan This sharply arise of amount of bad debt arose from is that from that the branch started to convey may news consumption loan products in the last several years However, the year 2011 saw an improvement since these indexes was only 0.65% and 65% respectively To achieve this result, from the beginning of 2011 the branch’s management have many strict regulation about the lending procedure such as being more cautious in appraising the borrowing request, improving the professional skills of credit officers and so on 42 3.3.3.4 Revenue from comsumption lending Table 3.11 Revenue from comsumption lending (2009-2011) ( Unit: Billion VND) 2009 2010 2011 Total revenue from credit activities 160.70 229.87 332.38 Total revenue from consumption credit 14.63 20.44 31.32 Total revenue from consumption credit/ 9.1% Total revenue from credit activities 8.9% 9.4% (Source: Business reports of Vietinbank Ha Tinh 2009- 1011) Figure3.6 Revenue from comsumption lending (2009-2011) ( Unit: Billion VND) (Source: Business reports of Vietinbank Ha Tinh 2009- 1011) The revenue from consumption credit has a rising trend in the period with average growth rate is about 46% this is a sustainable result However, the proportion of the revenue from consumption credit over total revenue from credit activities is still small, only approximately 9% through years 3.4 Evaluation of consumption lending at Vietinbank Hatinh 3.4.1 Achievements 43 As the role of financing for consumers’ shopping and other needs in life, consumer credit has contributed to the improvement and enhancement of the quality of life for the people in local area From the previous analysis, consumption credit Hatinh branch has achieved encouraging results: - Credit quality kept in a safe limit The consumption bad debt ratio is less than 0.92 % through years from 2009 t0 2011 Furthermore, both the ratios Consumption bad debt/ Total bad debt and Consumption bad debt/ Total comsumption debt in 2011 are less than that in 2010 - The consumption lending products became more and more diversified to meet the wide range of customer needs The types of products are increasing through years in order to satisfy all demand of customers Besides, Hatinh branch serves for all kind of customers in the area Thus, the Vietinbank’s brand become more popular and other services may also find many new customers - Consumption lending has contributed positively to the general business activities of the branch the consumption lending of the branch in recent three years has stable growth rate In fact, the average growth rate of consumption credit is 45% This kind of service also contributes to improve the efficiency in using of capital, risk diversification and increase sales Besides, it contributes to the branch’s products cross-selling which help attract a large number of customers for other services such - as personal deposit accounts, savings, money transfer services and card services To contribute to economic efficiency for consumers in particular and the whole - economic in general Encouraging consumption can stimulate investment and enhance trading relationships between business enterprises and commercial banks The reason is that when the companies sell more goods, their ability to repay bank loans is better At the same time, it also improves the life quality for local people All of those positive outcomes are from great efforts of the whole branch: The procedure of consumption lending in Hatinh branch is quite sufficient and strict Although the process was not really simple but branch’s executives not allow the 44 credit officers to shorten the steps in the process to ensure the safety factor The evaluation work of loan request recently is done smoothly and less mistakes The contracts are drafted very detailed and specific and ensure the interests of both customers and the branch Branch also have been very careful in bringing out the regulations about dispute 3.4.2 Some existing limitations and underlying reasons 3.4.2.1 Limitations Even gaining many achievements in consumption credit activity, Vietinbank hatinh also has to face with many difficulties The following part lists some limitations of this service in the branch which require to find out the causes as soon as possible in order to put forward the appropriate solutions - Although the consumption lending volume of the branch in recent three years has grown fast and stable, they only accounts for a small part of total branch’s credit, which is almost unchanged through the period and less than 9% - The structure of consumption lending is imbalanced and insufficient since it mainly concentrated in some kinds of products such loan for staff, housing buying and repairing and car buying It means that the branch just operates well in specific and traditional kinds of products, rather than exploit the people’s diverse needs In fact, the types of credit such as overdraft loans, student loans, loans to go labor export has not yet been developed well, although demand for these services is very high now Besides, focusing on a number of current products can decrease the risk diversification -In spite of the fact that bad debt ratio of consumption credit is in low level, it covers a huge proportion of total bad debts it keeps rising ( about 75%) Besides, this ratio fluctuated, which increased in 2010 and decreased in 2011, instead of having a stable trend through years 45 Limitations in consumption credit in Vietinbank– Hatinh branch are not be easy to surmount So, in order to find the methods to improve this activity, it is needed to look for the main for these limitations 3.4.2.2 Reasons * External factors The legal environment of business: Although in recent years, many legal documents on consumption lending are established and applied in practice, the legal framework of this field is not completed and specific For example, the administrative procedures of real estate owner certification are very complicated and time consuming Therefore, the customers face many disadvantages and inconveniens that they have to wait in a long time to borrow money The branch faces constraint in widening the consumption credit in recent years because of money policy of SBV For instance, following the direction 01/CT-NHNN of SBV, the bank have to keep to the credit proportion for non-production sector under 16% of total credit The banking information system for individual customer is not completed Until now there is only one department of SBV, CIC, which has obligation to monitor the credit history of the borrowers However, it focus mainly on the business customer while the individual customers information is not updated well Therefore, to avoid credit risks, the branch have to examine carefully the information that the customers providing, which can make the customers feel disturbed and even give up their loan requests The people and customs: Commonly, Vietnamese people and especially citizen from central area favor saving money rather than spend They usually accumulate enough money before cosuming instead of making a loan for shopping Besides, the Vietnamese people’s income is lower 46 compared with other countries and many customers not have knowledge about the this service Therefore, the demand of consumption lending is still low The customers who qualified and have strong financial foundation usually require simply and fast borrowing procedure However they don’t want to provide much information that cause difficulties for the credit officers in examine the loaning request The competition Currently there are branch of many banks established in the province which launch new consumption lending products to meet the market demand Banks such as Techcombank, VP Bank, Sacombank, ACB have the list of very diverse consumption credit products This creates more competitive pressure for all banks participating in the field of consumption lending * Internal factors The human resource The credit staff was quite young then have a quite short working time Beside, the number of credit officers in individual customer department is small, only 10 Although in recent years, the branch constantly rejuvenate the staff, those employees are inexperienced in terms of analyzing, evaluating the project, evaluating the capacity of customers, partially leading to disadvantages Marketing Through years the branch didn’t attach the special importance on the marketing, PR, and advertising to introduce and promote the consumption credit to the general customers The consumption product is advertised only to the old customers while the new customers have to go directly to the branch for the detailed information Policies of the branch 47 The branch is now concentrating on lending to corporate customers rather than individuals The reason is that the personal loan is generally small, diverse and take a lot of time time to guide the loan procedures for customers Besides, the customers often not have self-discipline in repayment of principal and interest Overall, the branch doesn’t favor the consumption credit It also tightened in approval conditions offered subject of consumer lending products due to risk aversion, as well as mechanisms for management of small loans are not good Information technology, modern equipment and infrastructure infrastructure fail to meet the satisfaction Consumption lending department of the branch did not have the best support in terms of technology, especially information technology systems in field of customer information The data base of the branch provides only the basic information about customers such as ID number, phone, address, work place and so on However, these kind of information often change As the results, the quality of internal reporting information should not be high In fact, in order to ensure the loan quality, loan officers need to obtain reliable and specific information as well as handle a lot of relevant issues Complete, accurate and timely information will help the bank avoiding potential risks and keeping customers Unfortunately, the source of these information has not been completed Chapter Recommendation for developing consumption lending at Vietinbank Hatinh 4.1 Direction for developing consumption loans 4.1.1 Direction for general business of the branch The goal for the future of Vietinbank Hatinh is striving to become a strong brand in area, continue to promote the accomplishments and try to attain the following specific objectives: 48 - Implement the sustainable, safe and efficient development Promote the extension of overdue debt collection, improve credit quality and expanded branch’s relationship with potential customers Moreover, branch need to strengthen relationships with all customers, including traditional customers and new - customers in order to build a large and diversified customer Actively develop and expand the banking products and services Increasing the distribution channels of products and services through the establishment of the - transaction offices to meet the immediate and effective use of customer service Focusing on the fund mobilization and especially paying attention on medium and - long term capital Strengthen the internal inspection to make sure the safety of the banking system Specially pay attention in the quality of inspectors to ensure the fairness and consistency 4.1.2 Direction for developing consumption lending of the branch - diversifying the types of loans Coordinating with consuming products suppliers, the student counseling office and so on to develop indirect lending, improve the process of consumption lending at the branch - developing personal lending towards providing full package service to customers: personal accounts, payroll account for employees, savings, card issuance for loans, overdraft loans, and so on - Expanding transaction office system and improving the quality of staff for the improvement of the quality of lending - Finally, organize and implement good marketing activities to meet customer needs, consistent with the characteristics and location of the branch, increasingly number of consumption credit customers through the system of transaction offices 4.2 Solutions for developing consumption loans of Vietinbank, Hatinh Branch 49 4.2.1 Increase the competitiveness - To improve and diversify the form of consumption lending products the branch need regular market research to design new products to meet more consumer’s tastes, such as offers loan products to serve domestic and international tourism, weddings and medical purposes, purchasing furniture, appliances and residential equipment and so on Development and expansion the loan products that use non-cash payment in order to promote efficiency new technologies Currently card is one consumption loan product for the local market which has many advantages (low cost, low risk, stable earnings, ) and is popular, so the branch can develop and extend this target market through many bonus policies For instance, the branch may issue credit cards without security assets for individuals has a large deposit balances at the Bank In addition, the Bank can be linked with tourism companies, study consulting companies , labor export companies to develop the issuance of credit for the customers - Define the strategical product : The variety of credit products will bring more choices to customers, but banks need to differentiate the product bringing high profits with the low-margin products Because tastes of customers frequently change, it’s necessary to identify what are strategic and leading products periodically The strategic consumption credit products should include the following basic characteristics: - Compliance with market’s supply – demand relation, familiar with the consumers and bring characteristics of the bank - highly competitive, based on factors of volume limit, interest rates and loan conditions - Profitable, can be associated with cross-selling, sold with many different products and services of the Bank 50 - Enlarge the network: A large network of transaction offices creates favorable conditions for consumers everywhere with easy access to banking services in general and consumer credit products in particular In addition, the scale also affects bank funding costs For example, in large-scale bank funding costs will be lower than the banks are small, leading to lower interest rates, increase competitiveness and attract the attention of customers than compared to other banks 4.2.2 Marketing In this high competitive market economy today, not only Vietinbank but also most commercial banks want to survive and develop must pay attention to the marketing activities To get attention from people, which could boost consumption lending services, branches will have to expand marketing activities such as card promotions, brand advertising, raising capital at high interest rates, the advertisements on mass media At the same time, the branch can use supplement for consumption lending activities such as: Starting a brokerage center, counseling center consumer goods, real estate consultants to support consumers when using the services of the Bank 4.2.3 Improving the quality of staff The quality and credit contract depends very much on the staff Therefore the branch should focus on the following issues: - employ more people to the individual customer department deploy training plan for employees, focus on training both professional kills and ethic The required skill that the staff should be trained include sale, analysis, presentation and negotiation and information collecting and exploiting In addition, the credit officers also must have the base of knowledge about legal, - market and economic Build the mechanisms of rewarding and disciplining to encourage staff to develop capacity and limit moral hazard in credit staff 51 - Especially, the branch should boldly recruit the young staffs that are competent and qualified in real works In the long-term orientation, the branch should also have a reasonable investment in local universities such as funding scholarships for outstanding students and having policies to attract good students to work in banks to create a guarantee staff who are qualified and responsible for the operations of Hatinh branch 4.2.4 Modernize technology Banks should invest more in modern technology to keep up with advanced levels of other banks This is an investment that brings high returns because the technology will help the branch becomes more utility to consumers Thus customers will increase the use of guarantee service in branch because of the more convenience than other banks Besides, modern infrastructure, equipment and machinery can affect the psychology of customer, especially the trust to the bank With the new customers, the first thing they see is the infrastructure Through it, they can conclude the size of the branch So Vietinbank hatinh should have the appropriate investment to upgrade and renovate the workplace and equipment Besides, banks also must pay more attention to the application of information technology in guarantee activities The investment in information technology not only creates good quality for the guarantee activities but also help the bank get the information to customers, evaluate guarantee contract, monitor and manage the guarantee performance quickly, promptly and accurately 4.3 Suggestions 4.3.1 Suggestions for government and agencies The effort for the development of the consumption lending is not only from the bank but also from the Government The consumption contributes on increasing production capacity and the vendor's business 52 The documents and regulations are frequently amended but still reveal the irration point and sometimes they seem to be too tight Therefore, when implementing these writings, banks have encountered many difficulties The Government is necessary to create adequate, synchronized and convenient legal framework for guarantee activities to development In particular, the state should reform and complete administrative procedures on registration of property, notarized contract pledge, mortgage Replace the documents and regulations which overlapping, inconsistent and incompatible with the actual consumption lending activities 4.3.1 Suggestions for SBV State Bank should develop further information management systems to the commercial banks, as follows: - Strengthen the role of the Credit Information Center: This center not only helps loan officers get the correct information on the status of the customer to improve credit quality but also provide borrowers with full information about financial markets, the economy and the banks themselves Hhistory of customer credit information are very important in making lending decisions or not However, the sources of individual information in the Information Center of State Bank, CIC, is the lack of update and specific Therefore, for further support to commercial banks in the process of managing the loan, SBV should promote the activities of the CIC, equipment investment as well as increasing staff to provide information accurately and updated In addition, banks also need active support to commercial banks in terms of technology in preventing the risk of card payment (card fraud, risk in payments over the Internet and so on) - Develop the private center of Credit Information: Currently, information about customers is very difficult to collect, So the central bank should create favorable conditions for commercial banks to launch the Center for credit information for the purpose of providing information of individuals customers 53 4.3.1 Suggestions for Vietinbank - Develop the procedure for consumption credit activities in the unified branch system This procedure ensures the compliance with the actual situation of the branches, the flexibility to satisfy customers and the profitable for banks - Reform and develop the system regularly in many fields such as human resources, technology and customer policies - Simplify the procedures - Investing in the modernization of the entire system, applying modern technology to facilitate the communication and updated information Conclusion The consumption lending market in Vietnam is a market full of potential but has not been fully exploited Thus expanding consumption lending is a right direction and meet the needs of the people Promoting this activity will also help banks have more income, especially when the competitive environment among banks is increasingly tougher For the economy, the economy will grow since people’s purchasing of products and services increase To be able to expand the lending, the bank need to diversify the consumption lending product , improve the qualification of credit officers, perform marketing for these products and improve the facilities of the bank Due to limitation of the theoretical knowledge and practical experience, and limited time and materials analysis research, this thesis certainly has many shortcomings 54 So I hope I can receive the feedback from supervisor, teachers, the bank staff and those who interested in consumption lending REFERENCES Phan Thị Thu Hà (2007) Ngân hàng thương mại Nhà xuất Đại học Kinh tế quốc dân, Hà Nội Peter S Rose (Fifth edition) Commercial bank Managerment MacGraw-Hill Irwin Annual report of Vietinbank in 2009, 2010, 2011 Annual report of Vietinbank Ha Tinh in 2009, 2010,2011 Website: - www.vietinbank.vn - www.Hatinh.gov.vn Others E-newspaper ... of consumption lending in commercial bank Chapter Analysis of data of consumption lending at Vietinbank, Hatinh Branch Chapter Recommendation for developing consumption lending at Vietinbank Hatinh... capital statute of the bank High level of risk: the first reason is that since the borrowers’s ability to pay back the loan totally bases on their income; therefore, in the cases that the borrowers... 2.3 Classification of consumption lending To give the bank the conveniences in management and give the borrowers various choices that meet their diversified need, the consumption lending is classified