In case of natural disasters, epidemics, and fires, the branch can consider extending the debt. For SMEs having difficulty selling their goods, the branch can help the business by introducing buyers to sell their inventory so that the business has money to pay off overdue debts. As for SMEs committing fraud, the branch must find a way to recover the debt as soon as possible.
3.2.8 Diversifying SME customers:
In order to manage professionally and sell effectively, branches need to diversify customers as one of the strategies for banks to grow and expand market share, especially with the customer group of SMEs. Focusing on only one customer group or market is one of the weaknesses of small banks.
In the current competitive environment, to survive and develop, any commercial bank must expand and attract quality customers. To do that, banks need to have appropriate customer policies, put the interests of customers first, the interests of the bank must be linked to the interests of customers and must be based on the principle of mutual benefit. Diversifying customer segments requires meeting the following conditions:
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- For reputable SMEs with effective business and traditional customers, banks need to continue to strengthen and bind these customers with preferential interest rates, fees, foreign currency trading, consulting services, shortening transaction time...
- Continue to focus capital on SMEs in the processing, trade, services and construction industries, and especially target SMEs whose operations are in the supply chains of FDI enterprises because these are customers with great development potential and operating efficiency.
- Regularly organize customer conferences to listen to customers' opinions on credit products and arising needs. Thereby helping the branch to improve credit processes, credit products and customer care policies.
customers, aiming to better satisfy customer needs, contributing to improving and enhancing the quality of credit activities.
3.2.9 Improving the quality of human resources
As mentioned above, human resources are one of the factors that create the strength of the bank. This is the theoretical basis of this solution. The practical basis of the solution to improve the quality of human resources is that at VietinBank Bac Ninh, the number of staff is limited, so one staff has to take on many jobs. This greatly affects the quality of work. Thus, in order to expand lending activities in general and lending to SMEs in particular, the branch needs to have measures to improve the quality of human resources by supporting staff to participate in short and long-term training courses to improve their professional qualifications and service attitude. In addition, because banking is a service industry, VietinBank Bac Ninh also needs to pay special attention to propaganda and education on the communication style of staff.
In addition, the branch needs to have appropriate reward policies for officers who successfully complete the assigned credit plan. At the same time, the branch must also have a strict handling regime for credit officers who violate professional ethics standards, causing damage to the bank. The branch needs to have a suggestion box located in the branch's customer room as well as in the transaction offices. Customers coming to the branch can completely give their comments on the poor service style of the staff towards them as well as some changes that can be made to contribute to improving the service style of the staff.
3.3. Some recommendations
3.3.1. Recommendations to Vietnam Joint Stock Commercial Bank for Industry and Trade:
Diversify products and have appropriate policies and regulations to develop SME lending:
Vietnam Joint Stock Commercial Bank for Industry and Trade needs to research and quickly complete and increase many products and services suitable to the characteristics of each industry.
of the SME customer system, providing criteria and analysis bases suitable for each customer group to apply appropriate policies, further diversifying credit types.
Strengthen training, coaching, and development for staff throughout the system. Create a favorable working environment for staff, have emulation and reward programs to motivate staff, introduce reward and punishment regimes, encourage staff to actively learn and improve their professional qualifications.
Build appropriate credit management systems, minimize processes while still ensuring administrative operations from headquarters to branches and transaction offices. Strengthen inspection and supervision of lending and appraisal activities to promptly prevent and take appropriate and timely handling measures.
Strengthen cooperation, support and information exchange with the association of SMEs, thereby creating more conditions to exploit more and more effectively the strengths of each party, better meet the capital needs as well as provide consulting services for SMEs, at the same time closely coordinate with the State Bank to create credit information programs, improve and expand the scope of information to help branches effectively prevent risks.
There is a mechanism for rotating staff that needs to be changed to be more suitable. With the current regulation, staff working in customer relations must be rotated after a maximum of 2 years, which is not appropriate. The job rotation period needs to be increased to 5 years because this time is enough for staff to feel secure in their work, enough to accumulate experience in work and accompany customers, understand customers, and on that basis, have the conditions to approach, attract and develop new customers on the basis of exploiting existing customers.
Reducing the time to review applications exceeding the Branch's credit judgment: Loans exceeding the Branch's judgment are loans that exceed the Branch's lending authority. Currently, the time to review these loan applications often lasts from 10-15 days or even longer.
This greatly affects the quality of lending. Therefore, the Vietnam Joint Stock Commercial Bank has improved the way of coordinating with branches in handling loan applications beyond its authority, such as: online meetings so that branches can continue to explain issues related to the application and customers. On the other hand, the coordination between departments at the headquarters of the Vietnam Joint Stock Commercial Bank also needs to be smoother so as not to affect the application review time.
There is a mechanism to attract cheap capital to get competitive lending interest rates : To attract cheap capital, the mechanism for capital mobilization and use of mobilized capital must be very flexible. Along with the development of technology 4.0, NHCT needs to focus on technological innovation to launch electronic banking products and services with many outstanding features to attract users, thereby attracting and using them to open payment accounts, thereby attracting Casa capital (non-term capital) to get low-cost capital.
3.3.2. Recommendations to SMEs
Firstly, SMEs need to be proactive in improving their management capacity, quickly grasp market development trends to find suitable directions to improve business performance. Be transparent in accounting and financial management as well as strictly fulfill obligations to the state budget to build reputation for their businesses.
Second: SMEs need to create connections with each other and support each other in their operations. SMEs actively participate in supply chains and become satellite companies of large corporations. The current trend is that businesses often link together to develop distribution networks and promote marketing.
Third : Enterprises constantly innovate and adapt to change to adapt to the ongoing deep integration process. Innovation is based on four perspectives: enhancing product benefits, enhancing customer benefits, developing distribution systems, enhancing marketing efforts, and improving the operational efficiency of business organizations.
3.3.3. Recommendations to the People's Committee of Bac Ninh province
Regarding administrative reform and improvement of the investment and business environment: In order to help SMEs easily access and develop in the context of a high wave of foreign investment in Bac Ninh, Bac Ninh province needs to have effective administrative reform policies and improve the investment and business environment. Effectively implement administrative reform programs and plans, strengthen discipline, focus on administrative reform, shorten the time to handle administrative procedures for each field, especially administrative procedures that directly affect the interests of enterprises such as land, tax, customs, etc.; periodically organize direct dialogue activities between the government and enterprises; strengthen the reception of information and handling of feedback from enterprises through hotlines, the provincial Electronic Information Portal, etc.; continue to implement the plan to improve provincial competitiveness on the basis of substantially improving the PCI, PAPI, PAR Index, ICT Index, and DCI Bac Ninh. Strengthening the operational capacity of the Public Administration Center; Center for investment promotion, trade, tourism, industrial promotion, and employment services.
Regarding information, consulting and legal support: Bac Ninh province promptly updates the province's electronic information portal and component electronic information portals with information items according to regulations and related to business support such as: Legal documents and policies related to production and business activities; online public services; activities of state agencies; information on bidding and public procurement; information on resolving recommendations, difficulties and problems for businesses; introducing certified products and brands; information on connecting businesses in the area. Synchronously deploy legal support activities for businesses, publish legal aid situations to help small and medium-sized enterprises on the Electronic Information Portal for businesses to refer to and apply; form a legal support network for small and medium-sized enterprises; propose solutions to long-standing problems and recommendations, issues that have been resolved by departments, branches, businesses and localities but are not satisfactory, and businesses still need to continue to make recommendations.
Regarding support for access to finance, credit and improving the efficiency of capital use for small and medium enterprises: Improve and enhance the capacity of the Bac Ninh Development Investment Fund; supplement the capital of the Development Investment Fund; implement a support mechanism through the form of entrusted capital management, actively mobilize medium and long-term capital from domestic and foreign organizations and enterprises. Develop regulations on credit guarantee activities and a credit guarantee plan for small and medium enterprises. Implement policies and regulations of the Government and the State Bank of Vietnam on: Supporting credit institutions to increase outstanding loans to small and medium enterprises; encouraging credit institutions to lend to small and medium enterprises based on enterprise credit ratings and appropriate measures. Regarding providing information to support small and medium enterprises and promoting market expansion for small and medium enterprises: Establishing a network of information systems to support small and medium enterprises to provide information on legal documents regulating business operations, policies and programs to support the development of small and medium enterprises, information on bidding and other information to support business operations. Completing and announcing the Urban Planning Project to 2035, with a vision to 2050; projects, core urban planning, functional areas in the urban system of the whole province... Surveying information needs to support business operations; comprehensively upgrading; connecting with information pages and portals of ministries, branches and localities. Developing and announcing annual publications on providing information on the small and medium enterprise sector in the province. Support the implementation of investment, trade, tourism promotion, partner search and market expansion, organize trade and investment fairs with maximum support for the participation of small and medium enterprises. Regularly provide information and support small and medium enterprises to participate in providing services to enterprises in industrial parks. Organize programs connecting small and medium enterprises with large domestic enterprises, SME enterprises and multinational corporations in the province, Vietnam. Periodically organize assessments of the effectiveness of the Program implementation to grasp
grasp the needs of businesses, as a basis for amending and supplementing appropriate support mechanisms.
Regarding support for production and business premises: Based on the actual land fund conditions in the locality, the Provincial People's Committee shall submit to the Provincial People's Council to arrange land funds to form and develop industrial clusters; agricultural processing zones, ... focusing on small and medium-sized enterprises in accordance with the approved land use planning, and decide to support rental prices for small and medium-sized enterprises in industrial parks, high-tech parks, and industrial clusters in the area. The maximum support period is 05 years from the date of signing the rental contract. Support for rental prices for small and medium-sized enterprises is implemented through price compensation for investors in infrastructure of industrial parks, high-tech parks, and industrial clusters to reduce rental prices for small and medium-sized enterprises. The compensation amount is deducted from the land rent or supported from the local budget (not applicable to small and medium-sized enterprises with foreign investment capital, small and medium-sized enterprises with state capital). Synchronize and regularly update the electronic information system to provide a master map of planning projects approved by the Provincial People's Committee; planning information, land use plans inside and outside industrial parks in the districts. Every 6 months and every year, review the land fund inside and outside industrial parks, resolutely reclaim cases where land is allocated but not implemented or implemented slowly to arrange for other enterprises with land needs. Review and adjust industrial cluster planning; propose measures to invest in infrastructure construction, attract investment to fill industrial zones, clusters, and points, meeting the needs of production and business premises of small and medium enterprises. Review and support the development of trade and service centers and clusters, retail network systems, civilized commercial streets according to suitable products such as: Fashion, cuisine, urban walking streets, etc.
About supporting craft villages:
Review and classify craft villages according to specific criteria to support and develop craft villages to ensure harmony between growth, production, environmental protection, and job creation.
Increase income; study and propose production conversion and labor transfer in some polluting craft villages, moving towards complete production conversion according to the roadmap. For competitive craft villages, support to improve management capacity, information, market, land, human resource training associated with converting individual business households into enterprises according to the Law on Support for Small and Medium Enterprises.
To effectively implement the Plan, the Provincial People's Committee assigns local departments and branches to specify tasks, contents and specific implementation roadmaps. The Department of Planning and Investment is the focal unit, coordinating with relevant departments, branches and branches to implement the Law on Support for Small and Medium Enterprises; effectively implementing the Plan, is responsible for monitoring and supervising the implementation of the Plan by agencies, branches and branches, advising the Provincial People's Committee on issues arising during the implementation of the plan; recommending the Provincial People's Committee to make necessary changes and adjustments to the program, groups of solutions that encounter difficulties during the implementation process, are difficult to implement and do not achieve the set goals.
3.3.4. Recommendations to the State Bank of Vietnam
Firstly, Completing legal documents in the banking sector, improving the capacity to operate and supervise the commercial banking system.
The State Bank of Vietnam needs to issue regulations to operate monetary policy in a stable and long-term manner, ensuring the goal of stabilizing the macro economy and curbing inflation, creating conditions for commercial banks and enterprises to be proactive in planning their operational strategies.
In order to improve the operational efficiency of commercial banks in general and Vietinbank in particular, the State Bank of Vietnam needs to quickly and effectively implement the reform and restructuring program of the Vietnamese banking industry, create a competitive environment for banking activities, and help SMEs have easier access to loan capital.
In addition, the State Bank needs to direct commercial banks to step up propaganda and dissemination to SMEs about credit mechanisms and policies and interest rates to avoid credit brokers in order to focus capital on production, trade and service industries that the State is encouraging to develop.