Improving the quality of consumer loans at Industry and Trade Bank - 7

In addition to the reasons from the branch, the limitations in credit card activities of the branch are also explained by the reasons belonging to the consumer loan customers themselves.

*For consumer loan customers

The biggest reason is the limited ability of consumers to meet loan conditions. Consumer loan customers are characterized by small capital size, uneven financial capacity, most consumer loan customers do not have good financial situation. Moreover, most consumer loan customers have no guarantor, no collateral, or unqualified collateral. 

The financial inspection of individual customers is much more difficult than that of corporate customers. In addition, the level of individual customers is not high, knowledge of capital and asset management is weak. Moral risk for individual customers is much higher than for corporate customers, the inspection and supervision of loans with this object is costly and complicated because although the loan size is small, the quantity is very large. . All of these make it difficult for consumers to meet the loan conditions set by the branch. However, the level, financial conditions and income of individual customers cannot be improved in the short term, because this is a social factor and depends on the growth of the entire economy. Therefore, accessing the branch's credit capital for individual customers is still very difficult.

*About the business environment

Besides the reasons belonging to the branch and the customer, the reasons from the business environment are also very important and cannot be ignored.

Currently, consumer lending has become the target of credit institutions, especially non-state banks, typically large joint stock commercial banks such as Asia Commercial Joint Stock Bank (ACB). , Saigon Thuong Tin Bank (Sacombank), Technological and Commercial Bank (Techcombank), Hanoi House Bank (HaBuBank)… Competition has become increasingly fierce, making state-owned banks seem to have awakened to the market. This school is full of potential. They increasingly focus on individual and household customers to meet the demand for consumer loans such as Bank for Agriculture and Rural Development of Vietnam (AgriBank), Housing Development Bank in the Mekong Delta ( MHB), Bank for Foreign Trade of Vietnam (Vietcombank), Bank for Investment and Development ( BIDV).). With such fierce competitive pressure, the consumer lending market share will be shared, so the scale of consumer lending at Ba Dinh Branch of Industry and Trade Bank is quite small, which is inevitable. More importantly, the fact that Vietnam officially became a member of the international trade organization WTO led to the opening of the financial market.

International banks and large financial groups appear, providing good quality products and services, which will attract a large number of customers to them. Therefore, activities to improve the quality of credit records of the branch will be more and more difficult.

In addition, the legal environment is not transparent and unhealthy, making it difficult to improve the quality of credit records of the branch. The absurdity, rigidity in administrative work, overlapping and conflicting legal documents cause confusion for customers when applying for loans. The weak management capacity of the management agencies inhibits the development of the economy in general and credit card activities in particular. Therefore, the demand for consumer loans is also very limited. Moreover, the legal regulations governing the operation of commercial banks are too strict. All of these have caused great difficulties for the branch's credit card activities.

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Currently, there are not enough legal regulations to ensure that consumers who need loans can regularly access the bank's credit sources. Measures to support consumption, credit guarantee for people's consumer borrowing needs, financial-credit support policies... have not yet brought about the expected effect. Therefore, getting loans from banks in general and branches in particular is still a difficult problem for customers with consumer loans.

In general, activities to improve the quality of credit records of the branch have achieved great achievements. However, there are still many limitations in this activity. If the branch does not have timely solutions, the above limitations will not only not be resolved but will become more and more serious, threatening the development of the branch in general, and credit card activities in general. exclusively in the future.

Improving the quality of consumer loans at Industry and Trade Bank - 7

CHAPTER 3. SOLUTIONS TO IMPROVE THE QUALITY OF CONSUMER LOANS OF BA DINH BRANCH

3.1 Development orientation of the branch's consumer lending activities in the coming time

3.1.1 Demand for consumer loans in the coming time

In general, in recent years, consumers' living standards have improved significantly, in harmony with the general trend of the region and the world, consumer demand in Vietnam has grown strongly. The tendency to accumulate wealth to a certain extent to spend on expensive consumer needs has gradually changed. In addition, consumers have gradually become accustomed to the modern payment environment and convenient banking financial services. Demand for bank loans to spend on consumption becomes an indispensable need. Meanwhile, the business lending field of banks is becoming increasingly difficult due to competitive pressure, credit portfolio becomes a potential market for banks to diversify investment. Consumer lending activities are enjoying certain benefits that banks bring, the demand for consumer loans is thereby increasing. To meet that demand,commercial banks in general and branches in particular need to improve the quality of credit documents, thereby attracting more customers.

Ba Dinh district is a key economic and cultural area of ​​the capital, the banking and finance sector in general and CVTD in particular has a lot of development prospects. The residential area in Ba Dinh district has a high average standard of living, and the consumer demand, especially the demand for expensive goods, is very large.

Faced with that situation, the branch needs to have an orientation to improve the quality of credit card in order to seize the opportunity, attract more customers, increase profits, and create conditions for the solid development of the branch in the future.

3.1.2 Development orientation of the branch's consumer lending in the coming time

Regarding loan quality: Ba Dinh Branch of Industrial and Commercial Bank always determines the quality of the loan as the top criterion when considering loan approval, so the Bank focuses on loans where the borrower has a high income. , stable, has a good relationship with the Bank.

About service quality: The branch tries to improve the quality of customer service, create a sustainable relationship with customers in the credit relationship. This is a very important factor to help the Branch improve its competitiveness in the market. Because credit card activities have very little difference in interest rates, customers choose banks to borrow mainly based on brand reputation, service quality and previous relationships. Besides, the service style for customers of credit officers must also be improved based on basic improvements in the lending process, how to communicate with customers, etc.

Regarding Improving the quality of human resources of the Bank: always looking for new and highly qualified officers; conduct training and retraining for new employees with little experience; have a better remuneration policy in terms of salary and bonus with experienced employees who make great contributions to the Branch. This is the innovation driving force of the Bank in the coming time.

Regarding customer policy: in the near future, a series of new urban areas and apartments will be built in the area, so the branch will continue to develop residential customer groups here, especially the customer group. customers with average income and above, young and successful. In addition, it is necessary to further develop existing consumer credit products, with special focus on financing for apartment purchases, home repairs and car purchases.

3.2 Solutions to improve the quality of consumer loans of Ba Dinh Branch of Industry and Trade Bank

3.2.1 Strengthening capital mobilization

Abundant capital is the leading condition for the branch to improve the quality of credit card. All efforts to improve loan quality are meaningless if the branch's capital mobilization activities are inefficient. Therefore, the first solution that the branch must implement to improve the quality of credit card is to increase capital mobilization. To do this, the branch needs to take specific measures as follows:

Diversify forms of mobilization: especially forms of deposit mobilization. For payment deposits, branches can issue many different types of cards to suit the diverse needs of customers. As for savings deposits, different types of deposits with different terms and interest rates will give customers more choices. From there, customers will have a comfortable mind because they can actively choose the most suitable deposit method among the many deposit products offered by the branch.

Increase the attractiveness of deposit mobilization methods: for payment deposits, branches need to bring customers more convenience when using payment cards or payment services of branches. For savings deposits, branches can increase the attractiveness of this form of mobilization by raising interest rates, applying inflation-compensating interest rates or tiered interest rates, etc. In addition, other forms of promotion such as loading and unloading. Sweepstakes, gifts... for customers when they open a payment account or when sending money are also very necessary.

Improve the quality of deposit deposit products: deposit mobilization products are characterized that their quality depends very much on the service style of those who provide it, in particular the transaction staff . Once a customer has a bad impression of a teller, they also have a bad impression of the bank where that employee works and this impression is difficult to change. Therefore, in addition to good professional skills, the bank's transaction staff need to have good communication skills and a professional service style... Thanks to that, the image of the branch in the hearts of customers will be a beautiful image. . Depositors will become loyal customers of the branch. This not only increases the capital for the branch but also helps the branch to mobilize more stable sources. Besides human factors, technology factors also greatly affect the quality of deposit mobilization products.Outdated technology will cause trouble for customers, especially customers who use payment cards or other payment services. Therefore, the branch needs to invest and modernize machinery and technology so that the products and services provided by the branch are of higher and higher quality.

Strengthening medium and long-term capital mobilization: By offering attractive interest rates for medium and long-term deposits, and issuing more long-term valuable papers, the branch can rapidly increase its medium and long-term capital. mine. The increase in medium and long-term capital is a condition for the branch to improve the quality of medium- and long-term loans for credit institutions.

3.2.2 Strengthening marketing activities to improve the quality of consumer loans

Currently, the competition in the financial - banking sector is taking place very fiercely. Through marketing activities, commercial banks must actively understand the needs of the market, find customers and entice them to their side. Marketing activities have a decisive influence on the number of customers as well as their loyalty to the bank. Therefore, in order to improve the quality of credit CV, branches need to strengthen marketing activities, focusing on potential customers. The most important task of this activity is to identify the needs and desires of customers who have consumer loan needs and how to meet those needs more effectively than the branch's competitors.

To strengthen marketing activities, the first thing that the branch needs to do is to set up a separate marketing department. For many years, the traditional strength of the branch has been business loans. However, in recent years, the branch has oriented to improve the quality of credit card, thereby expanding the market for this type of service. Consumers are not only new customers, but their understanding of banking services in general and credit card services in particular is still limited. Therefore, in order to improve the quality of loans for this group of customers, the branch must learn about their actual consumption needs. At the same time, the branch must promote its image to customers so that they know the high-quality products and services that the branch is providing. This requires the branch to have a separate marketing department.The establishment of a specialized marketing department must be done quickly. The marketing department with a team of professional marketing staff is responsible for implementing the contents of marketing NH. Moreover, it is necessary for the branch to establish a close coordination mechanism between the activities of the marketing department and the activities of the credit department. Only then, the branch's marketing activities will really be effective.

A specialized marketing department was established with the task of implementing NH marketing contents. The first content is to study the business environment. The marketing department must collect and research information on macro factors including: geographical environment, population environment, economic environment, socio-cultural, political and legal environment. The changes of these environmental factors have a great impact on the operation of both the branch and credit card activities in the locality. Therefore, the marketing department must forecast their fluctuations, help branch leaders promptly adjust the branch's activities in general and credit card activities in particular to suit changes in the environment.

Not only that, the marketing department also has to learn about the needs of customers, specifically the consumption trends of society and the region. The marketing department must research the market, determine what customers want from banking services in the present and in the future. Based on the input information provided by the marketing department, the new branch can improve service quality and develop new services in line with market needs. In addition, the marketing department is also responsible for learning about the branch's current and potential competitors, in order to build a suitable competitive strategy, creating an advantage for the branch in improving the quality. CVTD products and services.

In the current marketing strategy of the branch, the strategy to promote the brand image has not been given due attention. To overcome this, the branch needs to take some measures as follows:

- Organize press conferences and customer conferences to introduce the orientation to improve the quality of their credit portfolio. Here, information about existing products, plans to deploy new high-quality products will be provided to the press and customers by the branch. At the same time, the branch collects feedback and answers customers' questions when borrowing at the branch. This is a very effective measure for branches and customers to have a deeper understanding of each other, helping to expand and strengthen the credit relationship between the two parties.

- Use the media such as television, newspapers, Internet... to introduce the branch and preferential policies for customers who need consumer loans, advertise new products, especially products coming to market. This measure not only helps the branch's image become more popular, but also helps to convey goodwill messages from the branch to customers.

- Sponsor typical events to attract consumers' attention. All events that attract social attention should be used to make the affiliate brand more familiar. However, the branch also needs to have a choice when sponsoring, avoiding sponsoring events that are not suitable for banking activities, not worthy of the position of the branch of Industry and Trade Bank of Vietnam.

- Actively looking for new customers. Branches can hold press conferences to introduce their products, or organize events to promote new products, guide and advise customers in choosing the right products and services for them. This is a direct measure to increase the number of customers taking loans at the branch, thereby improving the quality of credit cards.

- Besides focusing on building relationships with new customers, branches should not neglect maintaining and developing relationships with old customers. Customer care department must continuously collect feedback from customers to make reasonable adjustments to the product. The marketing department must research and come up with promotional programs and preferential policies for consumer loan customers to encourage them to continue borrowing at the branch.

- Besides the brand promotion strategy, the product strategy also needs to be paid more attention by the branch. Currently, the branch's credit products are quite diverse but not much different from the products and services that other commercial banks are providing. That creates a familiar mentality of customers that even if they go to different banks, they also receive the same types of services, with the same quality. Therefore, in order to improve the quality of credit card, the branch must promptly grasp the needs of the market, diversify the credit portfolio to meet the increasingly diverse needs of customers. Moreover, branches need to make a difference for their products, with attached utility services, with a dedicated and professional service style. This will create a separate mark for the branch's products and services. On the one hand, perfecting its products,on the other hand, the branch needs to find out what services rival banks are deploying, how are the quality and what new services are about to be launched in the market. Since then, the branch has responded to be able to compete with other banks in attracting customers to their side.

All of the above measures, from studying the business environment to promoting the brand, must be carried out regularly, regularly or periodically by the branch. Marketing activities of the branch are not only increased in scale but also improved in quality. Thanks to that, improving the quality of credit CV can be done easily.

3.2.3 Diversify types of consumer lending products easily and effectively

Diversifying the types of credit card products and services is an important activity for Ba Dinh Branch of Industry and Trade Bank. Because the consumption needs of individuals and households are very rich, they not only borrow to buy land, repair houses, and buy cars, but also borrow to pay for goods and services, for shopping. household goods or the need for funding for study abroad, medical examination and treatment, etc. However, the branch only focuses on the needs of buying housing, buying living supplies, means of transportation and building and repairing houses. Doors are the main thing, while other needs such as education, medical treatment, tourism, or other convenient consumption needs have not yet been paid attention. Branches need to focus on expanding new product types and improving the quality of old products to meet the diverse needs of consumers.Only in this way can new branches attract more customers, increase competition among banks in the same area, and serve the purpose of improving credit quality.

However, to do that is not easy, the number of customers with the above needs is often less than the traditional types. Branches should actively approach these customers through marketing activities, promoting new products. In addition, the Branch still has to maintain and develop existing services such as home loans, home repair and car loans because this demand of consumers is still extremely high. big.

3.2.4 Develop customer policy towards more openness towards consumer borrowers

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