LV Thạc sỹ_Credit expansion to small and medium enterprises at Vietinbank hai ba trung branch

NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATIONAL PROGRAM *************************** BACHELOR’S THESIS SOLUTION FOR CREDIT EXPANSION TO SMALL AND MEDIUM ENTERPRISES AT VIETINBANK HAI BA TRUNG BRANCH ACKNOWLEDGEMENT I am heartily thankful to my supervisor, Prof Dr …, whose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding of the subject Moreover, I would also like to expose my great gratitude to Ms… – Credit officer and General Department officers of VietinBank Hai Ba Trung branch for their dedicated support and assistance during my internship Lastly, I offer my regards and blessings to all of those who supported me in any respect during the completion of the project TABLE OF CONTENTS ABBREVIATIONS LIST OF TABLES LIST OF DIAGRAMS INTRODUCTION CHAPTER I: THEORETICAL BACKGROUND OF CREDIT EXPANSION TO SMES AT COMMERCIAL BANK 1.1 Overview of SMEs in Vietnam 1.1.1 General concepts of SMEs .3 1.1.2 Typical characteristics of SMEs .6 1.1.3 Roles of SMEs in market economy 1.2 Credit operations to SMEs by commercial banks 1.2.1 Roles of credit operations to SMEs with SMEs .8 1.2.2 Roles of credit operations to SMEs with commercial banks 11 1.2.3 Loans classification to SMEs by commercial banks 12 1.3 Key issues on credit expansion to SMEs at commercial banks 13 1.3.1 General concepts of credit expansion to SMEs 13 1.3.2 The necessity of credit expansion to SMEs in current Vietnam economy 14 1.3.3 Assessment ratios 16 1.4 Factors affecting the credit expansion to SMEs 18 1.4.1 Internal factors .18 1.4.2 External factors 20 CHAPTER II: THE REALITY OF CREDIT EXPANSION TO SMES AT VIETINBANK HAI BA TRUNG BRANCH 22 2.1 An introduction to VietinBank Hai Ba Trung branch 22 2.1.1 History of establishment and development 22 2.1.2 Scope of business 24 2.1.3 Organizational structure .24 2.1.4 Business performance of VietinBank Hai Ba Trung branch 29 2.2 The performance of credit expansion to SMEs at VietinBank HBT 40 2.2.1 Number of SMEs customers 40 2.2.2 Total lending balance to SMEs .41 2.2.3 Total outstanding loans to SMEs 42 2.2.4 Overdue debt to SMEs 46 2.3 Evaluation of credit expansion to SMEs at VietinBank Hai Ba Trung 47 2.3.1 Achievement 47 2.3.2 Shortages and limitations .49 2.3.3 Possible causes .50 CHAPTER III: SOLUTIONS FOR CREDIT EXPANSION TO SMES AT VIETINBANK HAI BA TRUNG BRANCH 54 3.1 Key orientation of the future development of the VietinBank 54 3.1.1 Orientation of VietinBank and VietinBank Hai Ba Trung branch 54 3.1.2 The orientation for credit expansion to SMEs at VietinBank Hai Ba Trung 55 3.2 Solution for credit expansion to SMEs at VietinBank Hai Ba Trung 56 3.2.1 Understanding the SME Market 56 3.2.2 Finding new potential customers 56 3.2.3 Improving current products and designing new products that are specific for SMEs .57 3.2.4 Performing well the customer analysis 57 3.2.5 Improving risk management for lending to SMEs .58 3.2.6 Diversification collateral in lending to SMEs 59 3.2.7 Strengthen the consulting activities for SMEs .60 3.2.8 Improving raising capital from deposit activities 60 3.2.9 Building flexible lending interest rate for SMEs 60 3.3 Recommendation 60 3.3.1 Recommendation for government 60 3.3.2 Recommendation for State Bank of Vietnam .61 3.3.3 Recommendation for SMEs 62 CONCLUSION 64 REFERENCES 65 ABBREVIATIONS HBT Hai Ba Trung Incombank Industrial and Commercial Bank of Vietnam SBV State Bank of Vietnam VietinBank Vietnam Joint Stock Commercial Bank for Industry and Trade SMEs Small and Medium Enterprises LIST OF TABLES Table 1.1: Classification of enterprises Table 1.2: The Scoring table to classify the size of enterprise Table 2.1: Result of deposit activities at VietinBank Hai Ba Trung 2009–2011 30 Table 2.2: Structure of total deposit by terms (2009–2011) 33 Table 2.3: Result of credit performances (2009 – 2011) .34 Table 2.4: Credit quality in VietinBank Hai Ba Trung (2009 – 2011) 36 Table 2.5: Collecting loans after settling risks (2009 – 2011) .37 Table 2.6: Trade Finance activities in VietinBank Hai Ba Trung (2009 – 2011) 38 Table 2.7: VietinBank Hai Ba Trung business result over period 2009 – 2011 39 Table 2.8: SMEs customers at VietinBank Hai Ba Trung 40 Table 2.9: Lending balance to SMEs at VietinBank Hai Ba Trung .41 Table 2.10: Outstanding loans to SMEs at VietinBank Hai Ba Trung 43 Table 2.11: Bad debt ratio at VietinBank Hai Ba Trung 46 LIST OF DIAGRAMS Diagram 2.1: Organizational structure of VietinBank Hai Ba Trung 25 Diagram 2.2: Result of deposit activities at VietinBank Hai Ba Trung 2009–2011 30 Diagram 2.3: Structure of deposit by type of customer (2009–2011) 32 Diagram 2.4: Credit Growth Rate (2009 – 2011) 35 Diagram 2.5: Outstanding loan classification by term (2009 – 2011) 35 Diagram 2.6: Number of Card (2009 – 2011) .39 Diagram 2.7: Proportion of SMEs customers and Growth Rate (2009 – 2011) 41 Diagram 2.8: Lending balance to SMEs Growth Rate (2009 – 2011) 42 Diagram 2.9: Outstanding loan to SMEs Growth Rate (2009 – 2011) 43 Diagram 2.10: Outstanding loan to SMEs classification by term (2009 – 2011) 45 Diagram 2.11: Outstanding loan to SMEs classification by collateral (2009 – 2011) 46 INTRODUCTION Rationale Small and medium enterprises are central to economic development, particularly in emerging markets In order for SMEs to grow and their positive impact on the economy to continue, they need access to financial services, which has historically been severely constrained According to Vietnam Chamber of Commerce and Industry (VCCI), SMEs comprise 97% of all registered business in Vietnam, employ approximately 50% of the workforce, and contribute 40% for GDP; however, only 30% of SMEs can access to bank loans Many SMEs often rely on informal sources of capital, such as from relatives, or even in unofficial market to meet their financial needs But in many cases, these sources of capital cannot meet the capital need of SMEs, and also have high cost, while commercial banks have been considered a steady, abundant and safe capital resource That’s why SMEs always look to bank loans as the primary source for their financial needs Currently, SMEs still face a lot of difficulties in accessing to bank loans Commercial banks recognize that SMEs are potential customers; create growth opportunities and competitive advantage However, commercial banks have traditionally viewed SMEs as a challenge because of information asymmetry, lack of collateral, and the high cost of serving smaller transactions As the result, SMEs are largely underserved when it comes to basic financial services With such limited access to financing, SME owners struggle to make the investments they need to increase productivity and competitiveness of their business, develop new markets, and hire more people Therefore, finding the solution for credit expansion to SMEs draws considerable attention Interested in this concern, during two-month internship in Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) Hai Ba Trung branch, I had opportunity to learn and find out more about the credit operations for SMEs I found that the lending to SMEs has improved but profit from this activity still accounts for a small proportion in total profit of branch Stemming from above reasons, I decided to choose the topic “Solutions for credit expansion to small and medium enterprises at VietinBank Hai Ba Trung branch” for my thesis Research objectives Through this thesis research, I aim to study the concepts of SMEs, the problems on credit expansion to SMEs; and importantly, the situations of credit expansion to SMEs at VietinBank Hai Ba Trung branch over the past years, figure out the strength and weakness The thesis also profoundly proposes any recommendations to expand credit for SMEs in Hai Ba Trung branch Research methodology The thesis research is applied both primary data from interview with staffs and secondary data from VietinBank Hai Ba Trung branch annual report, the Internet in order to analyze, make comparison over the years Based on these, I can draw conclusions about situation of credit expansion in the branch and suggest some recommendation Research structure Thesis research comprises of three main parts: Chapter I: Theoretical background of credit expansion to SMEs at commercial banks Chapter II: The reality of credit expansion to SMEs at VietinBank Hai Ba Trung branch Chapter III: Solutions for credit expansion to small and medium enterprises at VietinBank Hai Ba Trung branch 51 bank’s credit activities The branch has to raise more capital so it can expand lending and diversify the products Marketing has big effect to sell bank’s products, including lending Commercial bank has a good marketing plan means it does well in market research, build a reasonable strategy, price, distribution for banking productions The result of good marketing is attracting more customers, creating difference in fierce competition among commercial banks today, and facilitating the credit expansion for SMEs However a lot of enterprises not receive any promotion, marketing about product, and they only know the products when come to branch Qualification of the branch’s staffs is another cause for inefficient expansion In any business, human resource is critical element for the development of this business Qualified staffs will help bank anticipate the potential risks, so they can give customer wise advices, bring to them best products and build reputation for the branch At Hai Ba Trung branch, some staffs at SMEs department are inactively in finding new customers, they are not trained properly in sales skills, customer evaluation Thus, unqualified staffs interfere partly for credit expansion 2.3.3.2 External causes There are some external causes for inefficient credit expansion to SMEs: Firstly, it has been very difficult year for all economy; banking industry and enterprises are not outside of that picture When economy is going down, SMEs are forced to narrow their business; poor business performance leads to delay payment for bank loans; so commercial banks are also very cautious in lending to SMEs Secondly, number of commercial banks increases every year Until now, there are more than 60 commercial banks in Vietnam, in which many banks have high financial capacity, high level of management, modern technology All of these things are making a fiercer competition between commercial banks VietinBank Hai Ba Trung 52 branch located at a crowded street, with many other commercial banks nearby Just the branch has to be competed fiercely about interest rate, service fee, etc… The most important cause comes from SMEs themselves The financial capacity of SMEs is limited Commercial banks not assess financial capacity based on the charter capital; enterprise with small capital does not mean it has limit financial capacity However, the problem is that the debt ratio of SMEs is too high compared to their equity A lot of SMEs have total debt equal their total asset, even several times their equity It explains why commercial banks not trust when lend to SMEs According to analysis of global competitiveness 2011 – 2012 by World Economic Forum, the competitiveness of Vietnam still has a lot of problems To illustrate, the competitive advantage of Vietnam ranks at 134/142, the intelligence of production process at 108/142; all are located near the bottom Besides, the corporate government has not been adequate attention Especially the distance from business idea to making business projects is too far apart and not feasible Without feasible project, the branch has to reject lending to enterprises In addition, while the branch puts collateral requirement at high priority, SMEs with little collateral must have a feasible plan to persuade the branch approving the lending The SMEs’ ability of making a business plan, project is not high since SMEs often lack of talented, experienced, qualified staffs Equally important, the capacity of using capital of SMEs is still low Finally, the transparency of SMEs is limited In the SME market, these statements are often unaudited, incomplete, or missing entirely In the least developed markets, this problem is further compounded by a lack of information bureaus to provide credit history Many companies are unable to provide reliable or less accurate financial information for the branch Meanwhile, even though SMEs have not established a foothold in the market yet, the proportion of SMEs spends for branding 53 promotion activities is very low, accounts for less than 1% of total revenue, while this figure with foreign companies up to 10-20% revenue SMEs and VietinBank Hai Ba Trung branch have their own difficulties which require the effort of both sides SMEs need to improve to meet the branch’s requirement, and the branch should also help enterprises complete the procedure in order to guarantee the interests of both sides 54 CHAPTER III: SOLUTIONS FOR CREDIT EXPANSION TO SMEs AT VIETINBANK HAI BA TRUNG BRANCH 3.1 Key orientation of the future development of the VietinBank 3.1.1 Orientation of VietinBank and VietinBank Hai Ba Trung branch 2012 is assessed that it is still have many challenges for the economy, particularly for the banking sector VietinBank Board is very careful in making long term plan for bank VietinBank plans to become the financial holding companies, including commercial banks, investment banks, insurance, and real estate The long term plans of overall VietinBank system include:  Assets increased by an average 20-22% per year  Credit is the main business activities Ensuring bad debt rate under 3%  Development and increasing income from banking service fees  Building information technology systems synchronized, modern, safe, consistent – integrated – high stability  Expanding its business network to all provinces and cities nationwide  Developing a strong retail banking system  Constructing VietinBank become finance and banking corporation which is highly competitive and strong under the motto: "Safety - Efficiency - Modern Sustainable Growth” In 2012, VietinBank Hai Ba Trung branch continues plan about rising capital, credit growth to ensure safe operations, innovating technology, modernization banking, standardization overall activities Here is the branch’s goal in 2012: - Total amount from deposit activities: 9,700 billion VND - Credit activities: 4,640 billion VND 55 - Credit quality: increasing lending with collateral (only 17% outstanding loans with no collateral), - Service fees and trading foreign exchange: 21,514 million VND - Profit: 280,329 million VND The first priority of the branch is completing the target profit sets up by head office With the current economic situation, deposit activities, collecting debt after settling risk, service fee and credit quality are placed on top The branch also does not encourage credit growth in medium and long term loans 3.1.2 The orientation for credit expansion to SMEs at VietinBank Hai Ba Trung The credit expansion to SMEs at VietinBank Hai Ba Trung branch has to stick with target and supporting SMEs policy of head office Firstly, the branch needs to raise the number of SMEs, the outstanding loans to SMEs, find new customers, potential enterprises Moreover, the branch needs to step up promotion, create new products that specific for SMEs VietinBank Hai Ba Trung branch prioritizes providing credit to SMEs in high economic efficiency, such as hydropower, mining, exports, textiles, etc… The branch also implements flexible interest rate for SMEs, makes sure the lending interest rate for SMEs is lower at least 1%/year compared to normal rate With enterprises are facing difficulties, it will consult for financial restructure, debt structure to increase financial capacity of enterprises, help them overcome the difficulties and maintain their business Further, Hai Ba Trung branch also has preferential policies for the service fee It has plan to develop all-in financial services for SMEs, for example: advisory issued corporate bonds, consulting business, e-banking services, account management, cash management, foreign exchange at preferential rates, etc…VietinBank Hai Ba Trung 56 branch goal is becoming the top finance and banking SMEs service which is highly competitive 3.2 Solution for credit expansion to SMEs at VietinBank Hai Ba Trung 3.2.1 Understanding the SME Market Firstly, in order to expand credit to a group of customers, the first step is to develop a clear, quantifiable view of the SME market size, segmentation, defining characteristics, needs, and preferences This detailed knowledge enables a bank to answer two big questions: which segments to prioritize and how best to serve them Unlike large businesses, individual customers in their needs and preferences, SMEs also differ in what it takes to serve them In addition, since a small business in one context may be a relatively large one in another, a clear definition is essential to effectively understand the market Secondly, the branch needs to understand clearly the characteristics of SMEs and which economic situation SMEs in, so bank can provide accurate products and advices 3.2.2 Finding new potential customers Credit officers need to be proactive in the way find new customers You cannot sit at your office and wait for customer coming to you This way called walk-in customers They should take a proactive approach to generating sales, which means focusing on outreach rather than responding to walk-ins Since the owner of an SME is often also the decision maker, he or she may be very busy and less likely to take time away from work to look for banking services In such situations, credit staffs should rely on direct visits to SMEs’ office to present the product to prospective customers Although labor-intensive, such outreach is necessary to deliver information and build trust among SMEs, especially those who have not previously dealt with the branch 57 In addition to building a proactive, dedicated sales staff, branch had better also diversify the channels through which it acquires clients For instance, for smaller businesses with a lower relationship value, branch may use mass communication techniques such as direct mail and telemarketing to reach new clients Banks experts report that one of the most cost effective ways to reach new clients is through existing clients Based on this principle, the branch has found way to structure their approach to customer acquisition to maximize quick and inexpensive gains generated from the current portfolio When the branch can effectively identify prospective SME clients in the existing portfolio, credit officers may be in best position to cross sell to these clients To ensure this capacity, branches should be equipped as one-stop shops that offer the full range of the bank’s products 3.2.3 Improving current products and designing new products that are specific for SMEs The most important factor when VietinBank Hai Ba Trung branch designs new products is the balance between SME demand for products and the cost to provide them The branch might analyze what current products are popular among different client segments, thus enabling the bank to target other clients in the segment with the appropriate products Once learning what SMEs need, the branch is able to develop new products In designing and selecting offering product process, Hai Ba Trung branch need to ensure that SME products are cost-effective and are aware of the point at which the reward for providing a service is no longer worth the investment 3.2.4 Performing well the customer analysis Determining credit-worthiness is still made difficult by SMEs’ lack of reliable financial information Some of the most common approaches to effectively screening clients include (1) separating credit underwriting from sales and other bank functions, (2) utilizing credit rating and scoring tools, and (3) relying on transparent external data on the enterprise or owner 58 Separating credit underwriting from sales diminishes or eliminates the role of the credit officers in credit approval As the result, a bank is not dependent on an individual staff’s ability to screen loan applicants Banks around the world have overwhelmingly rated the financial assessment of the business as their most important basis for the lending decision However, with the small business sector, financial statement is limited by the reliability of the information provided The branch may supplement financial statement data with credit rating and scoring tools, an approach that complements the independent underwriting structure These tools can range from risk-level ratings of loans based on credit analyst expertise to statistically validated scorecard approaches Even without scoring models, branch can address the information asymmetry question by relying on transparent external data Sources for this external data include credit bureau reports on the firm or the owner In developing countries with poor credit bureau coverage, banks may develop their own databases of external information; gather information by directly visiting firm premises or speaking with customers and suppliers 3.2.5 Improving risk management for lending to SMEs Risk management is always a critical bank function, but it becomes especially critical in SME sector because there is less information on how to reduce risks for this sector There are two main prioritizing risks to SMEs: credit risk and the risk of excessive cost to serve the client Credit risk is the risk of loss of principal or loss of a financial reward stemming from a borrower's failure to repay a loan It is an important concern in SME banking because unlike larger enterprises, financial information of SMEs is not verifiable As a result of this nontransparent data, most bank loans to SMEs require collateral Since SMEs often lack the collateral required, this limits the size of the market Therefore, 59 branch that can find other ways to manage credit risk without requiring collateral have a potential competitive advantage when serving SMEs Another potential risk is the risk of excessive cost to serve smaller transactions SMEs often require more transactions at lower values In this way, SMEs are very much alike to individual retail customers, but SME transactions may comprise a higher degree of customer interaction because of extensive and varied needs of SMEs Managing the risk of excessive cost to serve means managing the prospect of higher transaction costs incurred on a lower revenue base Managing the risk of excessive cost to serve SMEs is closely related to selecting effective and efficient approaches at each stage of the lending process 3.2.6 Diversification collateral in lending to SMEs Lacking collateral needed to secure loans and insufficiency of available information about their creditworthiness is traditionally common to almost SMEs Thus, unsecured lending is extremely important because it is heavily demanded by SMEs Collateral is often needed as incentive for repayment and as remuneration in case of default To overcome this, the branch has to find new ways to lend using nontraditional, growth-oriented means of securing loans At the simplest level, the branch can use collateral that is linked directly to the investment of an enterprise, as in equipment leasing, or using accounts receivable as collateral A more sophisticated product is factoring — a form of trade credit where a financial institution actually purchases an enterprise’s accounts receivable at a discount that includes interest plus service costs Factoring combines a credit and transaction product that enables SMEs to better manage cash flow and outsource financial functions 3.2.7 Strengthen the consulting activities for SMEs In order to expand credit, VietinBank Hai Ba Trung branch need to build its reputation, so new customers come for lending and become traditional ones A way to build recognition, and at the same time expand the potential demand for lending is that 60 the branch can provide SMEs with financial advisory services The branch needs to see these investments as supporting a critical sector of the national economy and a critical market for its long-term strategies 3.2.8 Improving raising capital from deposit activities Capital is one of the most important factors for expanding credit to SMEs In order to increase the capital, especial medium and long-term deposit, Hai Ba Trung branch improves cross-selling products, implements preferential interest rate policy, increasing marketing to potential customers In addition, the branch also needs to provide diversified products to attract more customers In fact, SMEs are potential customers who often deposit their money 3.2.9 Building flexible lending interest rate for SMEs In fact, VietinBank Hai Ba Trung branch already applies preferential lending interest rate for some enterprises, but this issue does not receive proper attention Interest rate depends on monetary policy of government in different period of time The lending interest rate policy for SMEs can be: diversified interest rate based on business cycle of enterprises; flexible interest rate suits to different borrowers, especial in some focused fields of Hai Ba Trung branch, such as hydropower, mining, exports, textiles, etc…; and preferential interest rate for traditional customers 3.3 Recommendation 3.3.1 Recommendation for government State should establish adequate, synchronous, tightly legal environment to borrowers and lenders fulfill their rights and their obligations, contribute to improving quality of lending to SMEs Accounting, auditing regulations and information disclosure regime of SMEs should be issued and completed In addition, State needs to examine and consult the current accounting regime of the enterprise to improve the authenticity, reliability of the information provided by enterprises 61 A model that many countries have applied successful is to set up financial leasing companies to serve the lending demand of SME Because not all SMEs can access to bank loans, so financial leasing companies will finance for medium and long term capital of enterprises This method is both safe and consistent with the ability of SMEs We can learn the ways other countries have applied to help SMEs In China, one solution was building a financial institutions system nationwide on guarantee for SMEs Besides, the government also established monetary fund for SMEs In addition, Chinese government also had rewards for enterprises that have efficient solution to overcome difficulties as well as efficient reforming management, raising capital in crisis period At present, commercial banks and enterprises fall in the situation at which one side is excessive capital but afraid of lending, one is lacking of capital to maintain production Government is the only one who can remove this bottleneck, through the buy back all the bad debts (through debt purchasing companies, or through the joint stock commercial bank with State’s capital dominates) to clean up the balance sheet for commercial banks and also clean (relatively clean) a balance sheet of enterprises Still know that to solve this problem, the question of capital and inflation fears will come back However, it needs to be conducted immediately, because the slower the proceeding is, the more expensive price to pay in the future 3.3.2 Recommendation for State Bank of Vietnam SBV needs to promulgate documents guiding the implementation of laws clearly and accurately Moreover, SBV should raise more autonomy for commercial banks, create free competition environment for them SBV avoids intervention too deep in commercial banks activities SBV would apply flexibly these tools: discount interest rate, refinancing interest rate, open market operation, to regulate the supply-demand of money and 62 unexpected changing in the market It needs to frequently capture the changing in economy to give direction in time, ensure the safe and effective operation of commercial banks SBV should also continuously improve the quality of macroeconomic forecasting Besides, SBV needs to upgrade and expand credit information system, frequently update and care about quality of information in order to make this information center become a database for preventing risks in lending activities of commercial banks system Finally, SBV must step up inspection and supervision commercial banks’ activities; ensure the transparence of lending activity, and penalty for violations 3.3.3 Recommendation for SMEs The reality is enterprises lack of capital while commercial banks have money but not lend to SMEs, because they fear the enterprises cannot afford the payments Therefore, SMEs need to overcome their weakness in order to get closer to bank loans I already point out unfavorite conditions of SMEs to commercial banks in the part external causes part Firstly, SMEs need to balance their capital structure, not rely on too much debt Besides, the corporate government has not been adequate attention SMEs should hire talented, experienced, qualified staffs to build feasible projects Enterprises also need to increase their capacity of using capital Finally, since the transparency of SMEs is limited, so their financial statement should be checked by reputable audit firm Enterprises can build their reputation by investing in branding promotion activities, whereby they gradually establish a foothold in the market In brief, SME has to constantly self-improvement, both in terms of technology, products and its size in order to enhance competitiveness in the market So the doors to access not only bank loans but also other sources will wide open for small and medium enterprises 63 CONCLUSION The thesis has again confirmed the utmost important role and position of small and medium enterprises to the economy and commercial banks The thesis also shows the extremely necessary of expanding credit to SMEs in current economic situation Now this problem is highly concerned by government, ministries, VietinBank Vietnam and VietinBank Hai Ba Trung branch However, in fact the credit performance to SMEs of Hai Ba Trung branch is not good It has not matched the potential of the branch, has not met the capital needs of the enterprises, and has not solved the problems and difficulties Therefore, let's expect more positive changes in the credit expansion to SMEs of VietinBank Hai Ba Trung branch in the near future With the analysis of credit operations situation for SMEs of the branch and thereby providing some solutions as well as recommendations in the thesis, I would like to contribute a small part in improving credit expansion to SMEs, which helps SMEs develop stronger It is a complex problem to solve and requires a comprehensive system of solutions and conditions Due to the limitation of time, knowledge and experience, shortcomings and mistakes of my thesis are inevitable Therefore, for further development, I look forward to all comments and supplements from lecturers and those who are interested in this thesis Thank you! 64 REFERENCES Vietnamese: Phan Thị Thu Hà (2007) Ngân hàng thương mại Nhà xuất Đại học Kinh tế quốc dân, Hà Nội Tô Ngọc Hưng (1993) Tiền tệ, Ngân hàng Thị trường Tài Nhà xuất Khoa học kỹ thuật, Hà Nội English: Peter S Rose (Fifth edition) Commercial bank Managerment MacGraw-Hill Irwin Financial statement of VietinBank and VietinBank Hai Ba Trung branch annual report 2008, 2009, 2010, and 2011 IFC The SMEs Banking Knowledge Guide 2009 Website: - VietinBank official website: http://www.vietinbank.vn - Vietnam economy: http://vneconomy.vn http://www.google.com.vn/url?sa=t&rct=j&q=5.%20ifc.%20the%20smes %20banking%20knowledge%20guide %202009&source=web&cd=1&ved=0CFAQFjAA&url=http%3A%2F %2Fwww.ifc.org%2Fifcext%2Fgfm.nsf%2FAttachmentsByTitle %2FSMEBankingGuidebook%2F%24FILE %2FSMEBankingGuide2009.pdf&ei=9hPYT8fAEMvtrQeEy_XnDw&usg=AF QjCNEhwjAPD4ge0H15BLs9bJESoa1BJw - http://www.themanager.org/strategy/global.htm -http://www.vnbusiness.vn/index.php?q=articles/dnnvv-kh%C3%B3-ti %E1%BA%BFp-c%E1%BA%ADn-v%E1%BB%91n-ng%C3%A2n-h 65 %C3%A0ng-ngh%E1%BB%8Bch-l%C3%BD-thi%E1%BA%BFu-th%E1%BB %AB - http://agro.gov.vn/news/tID16244_Giup-von-cho-Doanh-nghiep-nho-va-vua- Kinh-nghiem-tu-Trung-Quoc-.htm - http://vnexpress.net/gl/kinh-doanh/2012/05/ap-tran-lai-vay-15-mot-nam-voi-4linh-vuc-1/ ... Hai Ba Trung branch 54 3.1.2 The orientation for credit expansion to SMEs at VietinBank Hai Ba Trung 55 3.2 Solution for credit expansion to SMEs at VietinBank Hai Ba Trung 56 3.2.1 Understanding... domestic and international finance and banking corporation 2.1.1.2 History of VietinBank Hai Ba Trung branch VietinBank Hai Ba Trung is a branch of VietinBank, located at 285 Tran Khat Chan street, Hai. .. Outstanding loans to SMEs at VietinBank Hai Ba Trung 43 Table 2.11: Bad debt ratio at VietinBank Hai Ba Trung 46 LIST OF DIAGRAMS Diagram 2.1: Organizational structure of VietinBank Hai Ba