Evaluation Results of Cvno Service Quality Criteria and Individual Customer Satisfaction Level for Bidv

BIDV's creditworthiness is still low, because it still has the advantage of lending to businesses (supply side). These loans have a larger loan size (tens of billions of VND or more) than loans to meet the housing needs of businesses, and the appraisal of customers and control of loan use is much easier. On the contrary, CVNO activities incur more costs than loans to finance real estate investment projects of businesses. This activity also has many potential risks when the appraisal of creditworthiness of businesses is difficult, there is no updated information, control and sharing from the system of other commercial banks and credit information providers. In addition, the units in the retail sector as units advising the Board of Directors on the design of retail products including CVNO products, building policy mechanisms and organizing the implementation of CVNO products are sometimes inadequate, not meeting market requirements, not close to business practice. These are the main factors that make BIDV not pay enough attention to this activity compared to the potential that the bank can meet.

The retail business model at branches has not really been standardized and has not promoted retail activities, and the sales organization is not professional. Branches have not arranged staff reasonably, still focusing on operations, and the number of customer service managers is small. The functions and tasks of customer service managers are still linked to bad debt and risk management, which has limited the sales work of staff in terms of both time and motivation. The KPI system for staff is still simple (mainly indicators on credit scale, credit classification, etc.) and has not really created sales motivation for staff.

(2) Credit mechanisms and policies have not yet met the requirements of CVNO operations.

Administrative procedures related to credit granting are still cumbersome (too many signatures, credit granting forms, especially the TSDB file). With strict requirements from the bank, to borrow money at BIDV, customers must meet the loan conditions and must prepare the correct documents, so they have to go back and forth many times and spend a lot of time to complete the loan application. This causes fear, reducing the desire of customers to go to the bank to borrow money. Currently, BIDV's processing time for a complete application is 7 working days, in which ACB only takes 24h - 48h, Ban Viet Bank only needs 4h to decide whether to accept or not. This shows that if BIDV does not care about shortening the decision-making time, it will directly affect the outstanding CVNO debt at BIDV.

Incentive mechanisms for science and technology (through direct channels), brokerage commissions for investors/residential real estate businesses (through indirect channels), and commissions for units in the chain of modern distribution channels in housing credit activities are slow to adjust, not creating motivation to promote the development of CVNO scale.

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The CVNO policy is reflected in the low loan amount and loan term and is not suitable for the needs of customers. With the home repair loan product at BIDV, the common loan term is 5 years, the maximum home purchase loan term is only up to 20 years while many commercial banks have implemented home purchase loans with loan terms up to 25 years. With the form of unsecured loans for employees, the loan amount is still low, the loan term is too short. Meanwhile, with the ACB employee loan product, the loan amount can be up to 250 million VND with a loan term of up to 36 months. For employees, the demand for consumer loans is very large, but with a maximum loan amount of 50 million VND, implementing large spending plans such as buying a house, buying land to build a house and housing-related needs is very difficult. (The maximum loan amount that branches apply to employees is only 50 million VND and the maximum loan term is 36 months). If the bank increases the loan limit and extends the loan term, it will meet a larger number of customer needs, helping to increase sales and outstanding loans.

(3) Limited human resources

This is a significant obstacle to BIDV's market share development. The human factor plays a key role, deciding the success or failure, the development of an industry, a field, an enterprise. Most credit officers, although well-trained in banking, are young officers, have little experience, and have low self-training ability. This will affect the quality of transactions and customer service. The ability to meet staff standards in the context of deep integration is still low. Some branch officers do not have good sales and customer persuasion skills, and branches have not arranged enough departments to advise customers to improve service quality. The branch leadership team still lacks business experience and customer relations, and focuses on operations, leading to limitations in the scale and business efficiency of the branches.

(4) Technology projects are slow to deploy (through many levels of approval), so support for CVNO operations is limited, service quality and labor productivity are not high.

Modern technology projects and distribution channels have not been implemented much, market share is still low, CVNO activities in the form of using short-term capital have not been applied through modern channels through overdraft accounts but mainly still perform loans by item. The Corebanking system is in the process of being considered for replacement, operations at branches must go through many processes affecting labor productivity and customer service quality. Technology increases automation, supports improving labor productivity, and risk management in CVNO activities for customers is still poor.

(5) Underdeveloped bank marketing activities

The method of introducing CVNO products is still passive and unprofessional. Currently, BIDV mainly implements through quite classic methods such as introducing CVNO products through banners at transaction points, billboards on the road, through VOV traffic radio waves, through some popular websites. BIDV has not promoted cooperation with real estate companies and real estate agents as intermediaries in CVNO. BIDV has not yet fully exploited the advantages of internet and media communications that BIDV has invested in, the website interface is not as attractive as that of other commercial banks, such as: the interface on HSBC Vietnam's website helps customers easily satisfy the need for basic information about loans to meet the accommodation needs provided by the bank. This has reduced competitiveness as well as not increased sales and outstanding loans of CVNO.

(6) The quality of CVNO services to meet customers' needs is only average, not commensurate with the expectations of a leading bank in the banking industry regarding CVNO.

Through the survey and analysis of primary data of NCS on CVNO quality criteria according to SERVQUAL (see Appendix 4), the results obtained show that the evaluation scores of CVNO service quality criteria do not differ much between factors. The highest evaluation score belongs to TG (transaction time) (µ = 3.2; SD = 0.83278) and the lowest is DC (empathy) (µ = 3.0738, SD = 0.70179); the level of customer satisfaction with BIDV CVNO service is quite good (µ = 3.1411, SD = 0.59616) (Table 3.10).

Table 3.18. Results of evaluation of CVNO service quality criteria and individual customer satisfaction with BIDV

Research variables

Average (µ)	Standard deviation (SD)
TC	3.3223	.67524
DC	3.0738	.70179
NL	3.1238	.65620
TG	3.2000	.83278
HL	3.1411	.59616

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Source: Analysis results from SPSS, Appendix 4

The research results show that the satisfaction level of the Science and Technology group is above average, with an average rating of 3.1411 points on the 5-point Likert scale.

The low standard deviation shows that there is a similarity in customer perceptions in different areas of BIDV's operations. The quality criteria groups of reliability (TC), empathy (DC), staff capacity (NL) and transaction time (TG) of BIDV are all rated above average by customers. This is also consistent with the current status of these loans at BIDV, which is still very modest. However, the DC factor is rated at near average (3.0738 points), which shows that BIDV has not created empathy with customers. The NL criterion is also rated by customers at above average (3.1238), which is also an issue that BIDV needs to pay attention to when coming up with solutions.

Regarding the level of influence of factors on customer satisfaction, it shows that the greatest influence belongs to the TC factor, followed by the DC factor. Accordingly, the TC and DC factors have the same impact on the level of customer satisfaction.

b/ Causes from the customer side

(1) Customers are still hesitant to approach the lender to access loans. In addition, satisfying the necessary conditions makes it difficult for many customers.

(2) The financial capacity of customers is often unpredictable and can fluctuate highly because most customers have little asset management skills, income is greatly affected by health, the business situation of the hiring unit, unusual spending and marital status.

(3) Customers tend not to disclose their income and health status, because if their income is too low/health status is not guaranteed, they will not be able to borrow money from the bank. Therefore, if the credit officer is inexperienced, the possibility of moral hazard and adverse selection is very high.

c/ Causes from the business environment

(1) The economic environment has not escaped recession, growth is poor

Vietnam's economy has been affected by the global economic crisis, since 2008 our country has fallen into deflation and economic recession. The real estate market has frozen, prices have increased and real income of the people has decreased. Although the Government, the State Bank and the authorities have taken many positive measures to get the economy out of the crisis and the real estate market back to normal. However, the response of the market and the economy has not really improved. Prices of essential goods such as gasoline, electricity, water, gas have fluctuated continuously, the USD and gold prices have increased and fluctuated abnormally... affecting people's lives and the whole economy. Therefore, real income of the people has decreased. In addition, the cut

lending to the real estate investment sector under the Government's directive has caused many residential real estate projects to fall into an "unfinished" state for many years due to lack of capital. Along with that, individuals/households have cut spending, no longer considering housing investment as a top priority due to "belt tightening". They also see the prospect of "unfinished" real estate projects for a long time, so individuals/households do not have the need to use housing credit from banks. Therefore, although BIDV's CVNO outstanding debt has grown, it is still at a low level.

(2) Socio-cultural environment

Socio-cultural factors are one of the main factors affecting the credit activities of banks, especially CVNO activities. The low scale of CVNO activities, the difficulty in developing new products... are due to many reasons, but one of them is the habits and consumer psychology of Vietnamese people. Vietnamese consumers often do not like to be in debt and bear the heavy psychological burden of debt when investing in buying/building houses. Most people still think that when borrowing money from banks, they become debtors, making them feel uncomfortable and skeptical about the benefits that banks bring to them through their funding.

Vietnamese people tend to accumulate and save to buy and repair their houses rather than buying/repairing their houses first and then saving to pay off debts. When banks develop CVNO, they often encounter the above habits of the people. Therefore, to develop CVNO effectively, the first thing BIDV must do is to influence the psychology and consumption habits of the people, convince them by bringing them many benefits from CVNO activities, and dispel the above conservative and inherent psychology and habits.

In addition, the population distribution in our country is uneven, big cities such as Hanoi, Ho Chi Minh City, Da Nang... have limited land area but concentrate a large number of people. At the same time, the living standards, income and spending ability of people between regions have large differences, creating an increasingly large gap between rich and poor. The population in the middle and high income groups is concentrated in urban areas, accounting for a small proportion (about 25% of the population), the remaining 75% of the population lives in rural areas (where income levels are still low), so the demand for housing is uneven between areas. Therefore, the CVNO customer segment that the bank targets is only within the above 25% of the population, somewhat limiting BIDV's CVNO market share.

(3) Incomplete legal environment

Housing credit for science and technology is still a new activity in Vietnam, so the legal conditions for the existence and development of this business are

are still general and not clearly specific. Currently, banks only rely on Laws, Decisions, and General Guidelines on lending operations and guarantees when granting credit to customers such as the Law on Credit Institutions, Decision 1627/2001/QD - NHNN on lending regulations of credit institutions to customers and documents amending and supplementing Decision 1627... Because there is no specific, unified legal document guiding the implementation of CVNO operations, banks are not confident in investing and developing this activity strongly, but are only operating very cautiously because banks are afraid that mechanisms, policies, and legal regulations may change unexpectedly. Furthermore, Vietnam's legal documents are overlapping, the latter document negates the former, such as before 2008, CVNO activities in particular and lending activities in the residential real estate sector were encouraged by the Government and the State Bank, but by the end of 2009 and early 2010, investment in this sector was suddenly restricted because it was considered a non-production sector, which needed to be cut to fight the crisis. This has caused banks to be confused, disoriented, and limited their initiative in business, which is an important factor determining the success or failure of a business strategy.

(4) Competitive factors

The fierce competition in the market of banks has caused the "cake" of services to finance the housing development needs of the industrial sector to be divided into many parts. On the threshold of integration, the domestic market has heated up a lot. With the loosening of credit mechanisms in recent years, many banks have penetrated into most new business fields with high income rates to attract more and more customers. Most joint stock commercial banks provide CVNO services because they grasp the rapidly increasing needs of customers in this field. Many banks minimize procedures in loan appraisal and have attractive brokerage and customer introduction commission mechanisms, so BIDV branches face many difficulties in competition due to the reward mechanism, uncompetitive customer policies, and complicated administrative procedures.

Chapter 3 Conclusion

In chapter 3, the thesis has introduced an overview of the current situation of the housing credit market in Vietnam, drawing some conclusions about the housing credit activities of commercial banks such as the outstanding balance of CVNO tends to increase, commercial banks play an important role in credit financing for corporate customers and gradually increase their influence on the private customers. However, the quality of CVNO is not high, this activity only focuses on the private customers who have high and stable income. The lending interest rate is relatively high, the loan term is not long, commonly limited to 15 years.

Based on the theoretical basis mentioned in chapter 2, in chapter 3, the thesis collected and analyzed the current situation of BIDV's CVNO in the 5 years from 2010 to 2016 on the following aspects:

(1) Current status of organization and management of CVNO;

(2) Current status of applying CVNO development methods;

(3) Current status of applying CVNO risk control measures.

The thesis has surveyed and collected primary data on the assessment of the impact of factors causing RRCVNO; evaluated the CVNO service quality criteria according to the SERVQUAL model. The synthesis of primary and secondary data analysis results helps the researcher draw assessments of the current situation on two aspects with 2 (two) successes and 3 (three) limitations, with 13 causes in CVNO activities for BIDV's KHCN.

The research results on the current status of CVNO development in Chapter 3 are important practical arguments for proposing solutions to develop CVNO activities for BIDV's science and technology in the coming time.

CHAPTER 4

ORIENTATION AND SOLUTIONS FOR DEVELOPING HOUSING LOANS FOR INDIVIDUAL CUSTOMERS OF THE JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND

VIETNAM DEVELOPMENT

4.1. Orientation and viewpoints on housing lending development for individual customers of Vietnam Joint Stock Commercial Bank for Investment and Development in the period of 2016 - 2020, vision to 2025

4.1.1. Forecasting housing credit demand in Vietnam

In recent times, commercial banks have actively contributed to financing the housing real estate market and helped this market develop. However, by stopping, reducing and limiting housing real estate loans, refusing new loan contracts... with the aim of curbing the "overheating" development of the market, focusing on debt collection measures has negatively impacted the real estate market, causing the housing real estate market to decline and "freeze". However, the reality shows that, although the current market situation is gloomy, high-end housing real estate projects are still being implemented. Mid-range and low-end housing real estate is still at a high price (although the price has decreased by 50-60% compared to before), making the ability to buy a house of those with real needs very low. This shows that speculation in the housing real estate market is very high, about 80% of housing real estate investors (Ho Chi Minh City) and about 70% of housing real estate investors (Hanoi) are for speculative purposes. While the housing needs of the majority of consumers are still not really satisfied, the demand for real estate credit is still growing. Furthermore, on the part of commercial banks, housing real estate loans are still an important business segment in the structure of commercial bank loans, so in the coming time, commercial banks will continue to pay attention to developing it. However, the demand for housing credit will have some changes as follows:

(1) The demand for housing and residential land of Vietnamese people is still very large, especially in urban areas, suburban areas and industrial zones. However, due to the low income of individuals and households, the budget for investing in residential real estate is small. Currently, the trend of people with real needs is to choose residential real estate such as affordable apartments and townhouses with a cost of less than 2.5 billion VND. This shows that the residential real estate market will develop strongly in the mid-range and low-end segments; the liquidity of goods in this segment will be high.

(2) To satisfy the demand for residential real estate, individuals/households have now changed their perspective of only using their own savings and borrowing from relatives by increasing the use of commercial bank loans. According to VNR's report [33], the rate of choosing

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