Completing the credit rating system of Bank for Agriculture and Rural Development of Vietnam - 8


the past 12 months


In case the user cannot determine this information, a low value range will be selected



Orient the credit relationship with customers from the customer's point of view.

Subjective assessment of investors.

This indicator can be decided by the investor and can explain more reasons (not included in other non-financial indicators).


Ex: will develop a relationship with this customer because it can take advantage of the customer's business

(a 5-star hotel in Nha Trang) to develop card services...)

IV. External factors


Industry outlook.

Assess the general business environment of the enterprise


Assess the development ability of the industry in which the Client operates.



The ability of new businesses to enter the market in the same business field as assessed by investors.

Assess the possibility of market share sharing with newly established businesses in the same business field as AGRIBANK 's customers

Assess how difficult or easy it is to establish new businesses in the industry/field that customers

work. The rating is based on the following factors:


Are there legal barriers? VD:

Electric power industry


Are there any special conditions required? For example, the oil and gas industry requires a fuel resource area;


There are big requirements on capital and human resources



Are there any special technical requirements?

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Completing the credit rating system of Bank for Agriculture and Rural Development of Vietnam - 8


The ability of a firm's products to be replaced by "substitute products".

Assess the possibility of a complete loss of market share due to the product no longer being suitable for tastes and being replaced by another

other products.

Evaluation is based on the ability to create substitutes.


For example “Substitute Product”.


Black and white TVs are being replaced by color TVs and liquid crystal TVs


Stability of raw materials/input costs (volume and price).

Assess the stability of production and business activities.

Evaluation of the main raw materials and input costs for the production and business activities of the Company



Considering both factors is block

quantity and/or price:


Volume: ability to meet the demand for raw materials for production activities of the enterprise

Business is going on as normal


Price: trend of price fluctuations of raw materials in the market (especially for those

industries where raw materials are mainly imported)


Ex: Petrol…


Government and State policies.

Considering the advantages from the policies of the Government and the State.



Policy of tax


Special support loan


Trade barriers


Investment restriction policies



The influence of policies of countries - the main export markets.

Assess the stability of the export market.



Protection policy for domestic enterprises in countries that are export markets of customers



Encourage face import

the goods are the products of the customer;


Promulgating policies to make it difficult for export activities

customer's password….;


Stability of policies

of countries that are export markets of customers.


The degree of dependence of the enterprise's business activities on natural conditions.

Assess the stability of production and business activities, not subject to abnormal fluctuations due to changes

of natural conditions.




Industry-specific indicators: Influence from policies of foreign transport markets

Assess the sensitivity of production and business activities to changes in policies of

foreign transport market

This indicator applies to road transport, waterways, railways, pipelines and air transport.


Factors affecting the history of flight safety in the last 5 years

Safety assessment in the air transport industry.

This indicator is assessed at the levels

the following degrees:

Positive effect


Bad influence but


Negative influence

V. Other performance characteristics


Dependence on a few suppliers of input materials.

Assess the stability of production and business activities.

Evaluation is based on the availability of raw materials, input costs of suppliers in the market. Is the business dependent on a few houses?

certain offers not;


Is it easy for businesses to find alternative suppliers and/or sources?

substitute materials.


Dependence on a small number of consumers (outputs)

Assess the stability of the output market, ensure revenue sources. Business operations are not interrupted due to not being found


Is your product a special product that only serves a certain group of customers?

certain customers?;


Demand in the market for products

how is that product?;


Is it easy to find consumers with demand for your products?;


Average net revenue growth rate of the business in the last 3 years.

Assess the stability and predict the development trend of


Net revenue is the data taken on the income statement of the enterprise for the last 3 financial years.



Calculation formula:


2nd year net revenue -Net revenue

1st year / 1st year net revenue (1)


3rd year net revenue – 2nd year net revenue / 2nd year net revenue (2)


Average revenue growth in 3 years = (1)+(2)/2


Special case:


- If the client has only 2 years of financial statements, the average growth rate will be calculated

equal to the growth rate of those two years.


- If the customer has a 1-year financial statement (the financial statements only have period-end data), the growth rate is

average growth is assumed to be =0 (no growth)


Average ROE of the enterprise in the last 3 years compared to the ROE target of the industry

Assess the stability and predict the development trend of




(1st year ROE + 2nd year ROE + 3rd year ROE)/3


Number of years of operation of the enterprise in the industry (calculated from the time the product is launched on the market).

Assess the operating experience and stability of the business.

Not counting the time when the business is in the initial process

capital construction investment;


Does not count the time the business has been operating in the industry



Scope of business activities.

Market assessment of


Determined based on the business's product sales range

(only consider main consumption establishments).



Reputation of businesses with consumers.

Market assessment of the business.

Rating based on consumer votes for the product

of the business (through awards).


Popularity of the brand in the market (by many consumers)

known and liked).


Property insurance level.

The ability to maintain operations if there is a risk to the business, the level of damage

failure can happen

Assessment on: Total amount of insurance indemnified from insurance policies / Value of fixed assets of the business + Value of inventory x 100%.



affect the financial position, result

business results of enterprises



Impact of personnel changes on business activities of enterprises in the last 2 years.

Assess the stability/reasonability of the human resources environment and the ability to utilize talents for development

of the enterprise.

Evaluation is based on the results of the company's personnel changes, whether positive or negative.



Access to capital sources.

Ability to maintain and develop business operations.

Takes into account both the amount of capital that can be raised and correlates with the cost required to raise that level of capital (cost to raise capital, interest expense, etc.).




Development prospects of the business according to the assessment of investors.

Subjective views of credit officers


Assessment of the business's production and business prospects in the next 3 to 5 years.



Average age of power plants (Applicable to electricity generation, transmission and distribution industry)

Evaluate remaining capacity of power plants, predict product life cycle, operating time

remains of power plants

This indicator applies only to the electricity generation and distribution industry. The average number of years of operation of power plants is determined from the year of commencement of exploitation to the date of grading.


Business location advantage

Assess the convenience of the geographical location

reason to activity

Evaluation based on criteria


Business location of the enterprise



business activities of enterprises

Comfort level of facilities

the business floor of the enterprise;

Real estate market price in

the business area of ​​the enterprise;

Planning of the state, local authorities related to the business location of the enterprise



Date published: 11/04/2022
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