Completing the credit rating system of Bank for Agriculture and Rural Development of Vietnam - 7

1.4

Current accommodation status

Assess the stability of the borrower's own place of residence

Borrower's accommodation status is determined based on the information

after:

Certificate of land use right and house ownership or house purchase and sale contract (in case of

legal procedures have not been completed);

Talk to members in

the borrower's family;

Tenancy agreement of the person

get a loan;

Information from households or government agencies where the borrower resides/temporarily resides/works (Example:

police, ward People's Committee...);

Information from the organization where the person

Borrowers are working;

Actual survey of current residence

of the borrower.

1.5

Number of people directly and continuously economically dependent on the borrower (in the family)

Assess the borrower's financial burden.

The number of people directly depends on

Borrower's economy is determined:

- Number of people unable to

labor capacity in household registration;

- Number of people in the family

that the borrower must provide monthly with the borrower's income.

1.6

Family structure

Assess the borrower's possible financial obligations

Assess family structure based on

the following information:

- Talk to the members

in the borrower's family;

- Information from households or government agencies where the borrower resides/temporary residence/business (For example: police, People's Committee)

Ward…)

- Mass media (if any) related to people

Borrowing (press, television, etc.)

1.7

Life insurance

Assess the possibility of getting compensation for losses and damages in case the borrower's life is at risk

Determined based on the insured amount on the borrower's life insurance policy (in effect) (if

yes).

Sources of information consumers need to collect related to life insurance

Borrower's life:

Life insurance policies

of the borrower signed with the insurance company; and

Insurance company confirmation

about the authenticity of these contracts.

1.8

Nature of current job

Assess the stability and economics of the borrower's current job

Consumers determined based on the method

interview, verify information in writing…. VD:

- Management officials, experts and employees of the establishment

business;

- Certificate of the body

office/enterprise workplace;

- Borrower is a business owner

business: Business registration certificate;

- Information from households or government agencies where the person

loan for stay/temporary residence/work (For example: police, ward People's Committee...);

- Survey of the reality of the college.

1.9

Current working time

Assess the stability of the borrower's source of income

Number of years since the borrower started working in the field or industry

current up to the time of the assessment.

The length of employment in the borrower's current field is based on

the following sources of information:

Labor contract signed with the organization

the institution where the borrower is working;

Information from households or

government agency where the borrower resides/temporarily resides/works (Example:

police, ward People's Committee...);

Information from the organization where the person

Borrowers are working;

Actual survey of NCs.

In case, at the time of applying for a loan, the borrower is still working. By the time of reevaluation,

Retired Borrowers:

If the borrower does not generate income other than pensions, the target

This is scored at 20 points;

If the borrower continues to generate income from previous work experience, points will still be calculated as usual (e.g. retired teachers are still

take extra lessons).

1.1

Occupational risk (risk of unemployment, risk of life...).

Assess the borrower's occupational risk, which directly affects the borrower's ability to repay

Evaluation is based on a combination of factors

element:

The complex, safe nature of

current job;

Information from the organization where the person

Borrowers are working;

Type of labor contract signed with the organization where the borrower is working

job (seasonal or long-term..);

Remaining working time of

borrower before retirement (if any);

Declare income from work

of the borrower.

1.11

Personal status of family members

Assess the credibility and reputation of family members in the surrounding community

around, indirectly affect the psyche

Rating based on:

Evaluation through appraisal investigation

of the Credit Officer;

Information from households or government agencies where the borrower resides/temporarily resides/works (Example:

police, ward People's Committee...);

work, debt repayment ability of the borrower.

Family members only consider father, mother, spouse, children of

borrower.

1.12

Consumer's assessment of the borrower-borrower's relationship with family members

The borrower's relationship with family members is assessed

price in 3 levels:

Good

Normal

Bad

II. PAYING OF THE BOORDER

2.1

Stable monthly net income

Assess the stable net cash flow of the borrower's family, determine the borrower's ability to pay principal and interest to have an appropriate debt collection plan

Stable monthly net income = Borrower's total monthly income – expenses

regularly for the whole family.

Regular expenses of the whole borrower's family, including:

Regular living expenses;

Other expenses (if any).

Sources of information determining the borrower's total family income:

Borrower interview;

Information from households or government agencies where the business owner resides/temporarily resides/does business (Example:

police, ward People's Committee...);

Information from the organization where the borrower is working;

Account statement (if salary is paid via account)

The actual survey of the NCD

…

2.2

Ratio between debt repayment source and payable amount in the period (principal + interest) according to the debt repayment plan

Assess the borrower's ability to repay from a stable net income during the period, the appropriateness between the period of income and

repayment schedule (principal & interest) of the borrower.

Ratio = Amount to be paid in the period (principal + interest) according to the repayment plan/Stable net income in the period (determined from target 2.1)

2.3

Status of repayment of principal and interest with AGRIBANK

Review customer's repayment history for AGRIBANK

2.4

Current services used at AGRIBANK

Assess the customer's relationship with AGRIBANK,

ability to capture information about customers and the ability to market and attract customers to use AGRIBANK's services.

Evaluation based on the level of service use of customers at AGRIBANK is mainly based on

on the list of services that customers use such as:

Payment Service

Guarantee service

Open letter of credit

Forex service…

III

Secured property

In case a loan is secured by many types of assets, it will be

perform independent assessment for each type of collateral, then determine the total score of collateral according to the weighted average method:

Total score of loan collateral = Total [Score of each type of collateral * (Value of each type of collateral / Total value of collateral)]

Where multiple loans are secured by a single asset class, an independent assessment will be carried out for each loan.

first

Type of collateral

Liquidity rating

account of collateral

Identification based on asset class

guaranteed under Decision 18/2007/QD-NHNN

2

Property ownership properties

Assess the legitimacy of the collateral

The rating is based on the following information:

The rating is based on the following information:

tell

Property documents (red book, property purchase contract, certificate of ownership of valuable papers, shares, ...)

Notary's certification (if any);

Fee receipts (land tax, registration fee, ...)

Fee receipts (land tax, registration fee, ...)

3

Value of collateral/Total proposed loan

Assess the level of security of the collateral for the borrower's debt

= Value of collateral (determined at the latest assessment date) / Total proposed loan

In case a loan is secured by many types of assets, this indicator is determined according to the following formula:

= Value of collateral/(Total debt)

Recommended * Ratio of the Value of the collateral/Total value of the collateral)

In case there is a security asset used to secure many loans, this criterion is determined

according to the following formula:

= Value of collateral/Total outstanding loans of loans secured by assets

this

4

Downtrend in value of collateral in the past 12 months according to investors' assessment

Assess the stability of the security's value in the past 12 months

This indicator is evaluated based on

volatility of market value, depreciation rate of security assets.

Assess the trend of asset value decline

products based on the following information:

The market price (quote) of the asset

produce ;

Loss of property due to damage or obsolescence;

Depreciation rate is applicable to

asset;

Accumulated depreciation and remaining useful life of the asset

Eg:

Collateral is securities: the stock index in the past 12 months has continuously declined, the price of the security used as an asset

guaranteed sharp reduction;

Targets

The purpose of

Formula/determining method

targets

I. Liquidity from cash flow

1.1

Medium and long-term debt repayment capacity.

Assess the ability to repay medium and long-term debt in the next year

(200)

= (Expected net income in the Plan year + Expected depreciation expense in the Plan)/ Medium and long-term investment loan

due date to pay Plan

1.2

Ability to repay medium and long-term principal for medium and long-term loans for financial investment

short-term assets

Assessment of medium and long-term repayment ability of medium and long-term loans for short-term asset investment

Only applicable to the shipbuilding industry and the real estate business

(201)

= (Receivables at the beginning of the plan year + Revenue of the plan year - Receivables at the end of the year of the Plan) x Financing ratio of medium and long-term loans, short-term asset investments/Medium loans, long-term

investment in short-term assets that are expected to come due in the plan year

1.3

Trends in net cash flows (can be measured directly or indirectly)

Evaluate the cash flow in the period of the business

Consider the company's net cash flows for the period and the trend of this period's net cash flows compared to

with the previous period

Net cash flow for the period (code 50 - BCLCTT) of this quarter > 0 and Net cash flow for the previous quarter > 0 with a trend

increasing direction.

Net cash flow for the period (code 50 - BCLCTT) of this quarter > 0 and Net cash flow for the previous quarter > 0 but there is a trend

downward direction.

Net cash flow for the period (code 50 - BCLCTT) of this quarter < 0 and Net cash flow for the previous quarter < 0 but tends to

upward direction.

Net cash flow for the period (code 50 - BCLCTT) of this quarter < 0 and Net cash flow for the previous quarter < 0 but tends to

downward direction.

1.4

Sources of debt repayment from customers according to the customer's assessment.

Overall assessment of the customer about the customer's debt repayment ability based on the customer's information about the customer's debt repayment source

The assessment of this indicator requires a clear and provable basis/evidence, for example:

(205)

Current balance of the deposit account;

Economic contracts of enterprises performed with partners (have been, are being implemented and are in the process of waiting for payment - need to further assess the solvency of the partner);

Accounts receivable and it is probable that collection will be made (in full and on time);

Source of support from the parent company (with a solid basis: according to the group plan, according to the official commitment

...)

II

Management qualifications and internal environment

2.1

Criminal record of the head of the business and/or chief accountant

Assess the legal risks of the head of the business and/or the chief accountant affecting the business activities of the enterprise.

Karma

Criminal background assessment will be based on past legal background as well as current status

(210)

2.2

Management experience of the person directly managing the business

Assess the ability to lead and manage the business of the direct manager (for example, understand the business / field of operation of the business, have a management method suitable to the characteristics of the enterprise).

enemies of the industry/enterprise

Calculated in: Number of years as a business leader in the industry.

(215)

(Including the leadership period at other enterprises, but only those operating in the same industry/field are counted)

2.3

Education level of the person directly managing the business

Assess the education level of the manager

Evaluation on the basis of degrees of

Persons directly managing the business:

(220)

Graduate

University

Colleges

Intermediate

Below Intermediate

2.4

Executive capacity of the person directly managing the business according to assessment

Assess the ability to run the business, take advantage of talents and the ability to be sensitive to the market

Evaluation is based on the following:

(225)

Dynamic, responsive to

market;

The ability to attract and use

talent;

of NCD

take over business management

Enterprise management capacity;

Role/imprint for development

enterprise development.

2.5

Relationship of the Board of Directors with relevant agencies

Assess the ability to take advantage of opportunities to create conditions for enterprises to operate and develop (bidding for large projects, entrusted by relevant authorities to companies)

key projects…)

Assess the reputation of the business with the relevant authorities (gain trust), is it a business?

reputable industry in the locality, region, region, region.

(230)

Businesses are prioritized for local development and are facilitated by interested agencies.

2.6

The dynamism and sensitivity of the Board of Management to market changes as assessed by investors

Assess adaptability and sensitivity to the market

Evaluated on the basis of:

(235)

The ability to predict and capture coins

the direction of the market;

Ability to adapt to market fluctuations/changes

school;

Be able to take advantage of the opportunities presented by market changes and facilitate the growth of

enterprise.

2.7

Internal control environment and organizational structure of the enterprise according to the assessment of shareholders

Evaluation of the internal control environment and organizational structure of the enterprise. Ensure business operations are controlled, avoiding risky decisions. The enterprise has a good organizational structure, creating favorable operating conditions for the enterprise

The internal control environment is assessed based on:

(240)

Completeness and completeness of operating procedures;

Completeness and completeness of internal control procedures.

Implement processes in practice;

There is an internal inspection department that operates regularly.

A good organizational structure should meet the following requirements:

enterprise.

The functional department has been

fully established, with a reasonable assignment of duties;

The coordination mechanism between departments is well implemented.

2.8

Internal human resources environment of the enterprise according to the assessment of investors

Assess the ability to manage human resources, utilize human resources as well as the ability to attract talent of business leaders

Evaluation criteria:

(245)

A healthy and fair competitive working environment;

Human resource policy: recruitment, training and treatment of talents, working conditions, welfare regime, policies on reward, discipline, salary, promotion;

The implementation of policies is transparent, effective and tight

are not?

2.9

Vision, business strategy of the enterprise in the next 2 to 5 years

Assess the possibility of long-term stable development of the enterprise based on the feasibility of the business vision and strategy

Consider the feasibility of the vision of the business strategy in

reality:

(250)

Compare with financial strength.

Current status of business

Karma;

Industry development orientation of the State;

Trends of the market, of the background

economy;

Specific solutions of war

Is the strategy feasible?

Credit officers must keep documents about the business plan of the business in the credit file of the customer as a basis for

credit scoring.

III. Relationship with banks (AGRIBANK and other banks)

3.1

Debt repayment history (including debt)

Review loan repayment history as well as review

Due to the historical relationship factor, it will be considered for

(255)

Customer's principal and/or interest for 12 months

via

customer's goodwill to repay

loans that have been paid off/or have not been paid in full in the past 12 months

3.2

Number of times of debt restructuring (including principal and/or interest) in the past 12 months

Assess the stability of the source of debt repayment

The number of restructuring times is calculated on each debt and the total number of restructuring times will be the cumulative number of all restructuring times of all loans.

customer's debt;

(257)

Due to historical factors, the number of restructuring times will be calculated for loans that have been restructured in the past 12 months and have paid off and/or have not yet paid.

off debt.

3.3

Debt ratio (original)

Assess the quality of the current outstanding balance.

This ratio is determined based on the restructured principal balance at the rating date

customers /Total outstanding balance at the customer rating date.

(260)

restructured on total outstanding (principal) balance at the present time

In case the customer has overdue debt but no principal

If the customer is restructured at the customer rating date, the system will automatically calculate the customer with 100% of the restructured outstanding balance and calculate the score at

lowest score

3.4

Overdue status of current outstanding balance

Evaluation of loan quality at the customer rating date

The past due status of the current outstanding balance is assessed based on the number of days past due of the loans

outstanding balance at customer rating date

(265)

Since the evaluation is currently done by customer, the number of days past due will be counted as the highest number of overdue days of all

overdue debts of customers.

3.5

Debt ratio

Debt quality assessment

This ratio is determined based on

(266)

(principal) overdue on the total outstanding balance (principal) at time

current point

loan at customer rating date

based on the overdue principal balance at the customer rating date /Total outstanding balance as of date

customer ratings.

3.6

Relationship history of off-balance sheet commitments (letter of credit, guarantee, other payment commitments...) of

customer.

Assess the customer's off-balance sheet transaction relationship with AGRIBANK (customer reputation in commitments with 3rd parties).

Evaluation based on the number of times AGRIBANK has to perform on behalf of customers and off-balance sheet commitments must be converted into compulsory loans

(270)

3.7

Status of providing information of customers at the request of AGRIBANK

in the past 12 months.

Assess the customer's honesty and cooperation in providing information as the basis for customer analysis and tracking

by AGRIBANK.

Evaluate the completeness, timeliness and quality of financial, non-financial and collateral information provided by customers to the Bank.

(275)

3.8

Average balance of deposits in the past 12 months /Average outstanding balance of enterprises in the past 12 months at AGRIBANK

Assess the stability and certainty of the source of debt repayment.

= Average monthly deposit balance (in the last 12 months) / Average monthly loan balance of enterprises at AGRIBANK (in the past 12 months)

last 12 months).

(280)

Average deposit balance and average loan balance 12 months

past is calculated on a daily average or

Average monthly deposit balance

determined by the total deposit balance at the end of each month/12 months

Average monthly loan balance is determined by the total amount of loan outstanding at the end of the month at the Bank/12

month

In case the investor can exploit the information of Average Deposit Balance, Average Debt balance on a daily basis, then apply

using the average criterion

day

3.9

Proportion of sales transferred to AGRIBANK

previous year in the total revenue of the previous year compared to the proportion of capital financing of AGRIBANK

of the total loan amount financed.

Assess the stability and certainty of the source of debt repayment.

Proportion of deposit sales transferred to AGRIBANK in total

previous year's revenue) is calculated using the following formula:

(284)

Formula: Incurred on the customer's previous year's checking account at AGRIBANK/Revenue of the previous year + Receivable

Beginning of the period - Receivables at the end of the period

For example: The date of grading is June 22, 2007 The employee has the following information:

believe the following:

Total net revenue of customers

(on the financial statements of the previous year: 110 billion;

Receivables from customers at the beginning of the period (data on financial statements- 31/3/2007) is: 20

Billion;

Receivables from customers at the end of the period (data on financial statements -31/3/2007) is: 25

Billion;

Turnover sales

AGRIBANK last year

==> Proportion of sales transferred to AGRIBANK last year =

60/ (110 + 20-25) = 57%

* Proportion of AGRIBANK's funding in total capital

The loan is calculated using the following formula:

Average outstanding balance (including short-term, medium-term and long-term loans) of customers at AGRIBANK/Total outstanding loans (including short-term, medium-term and other loans)

Average of Enterprises in

AGRIBANK

Example: The average loan balance of customer A at AGRIBANK is 60 billion, of which the total average loan balance of customer A is 100 billion (AGRIBANK 60 billion, other banks and debt 40 billion) -- >

The ratio of AGRIBANK's capital financing is 60%;

Target 3.7 = 57%/60%*100= 95%

3.1

The level of use of AGRIBANK's services.

Assess the relationship of customers with AGRIBANK, ability to capture information about customers of customers.

Evaluation is based on the level of service usage of customers at AGRIBANK compared to other banks. The evaluation is mainly based on the service category that

Customers use as:

-285

Payment Service

Guarantee service

Open letter of credit

Forex service…

3.11

Time credit relationship with AGRIBANK.

Evaluation of traditional customers and customer understanding (in terms of business activities, repayment history and goodwill) of

NCD.

Determined as the time period from the time the customer begins to have a loan relationship with AGRIBANK to the time of assessment.

-290

3.12

Overdue debts at other banks in the past 12 months.

Quality rating

This information can be identified through the Credit Information Center

use (CIC);

-295

the amount of the customer's debts with the

Other banks in

However, this is not the only source of information;