2.1.2. Main products and services of VPBank for Small and Medium Enterprises 31
2.1.2.1. Receive savings deposits 31
2.1.2.2. SME Loans 32
2.1.2.3. Guarantee. 33
2.1.2.4. Payment products. 34
2.1.2.5. Card services 34
2.1.2.6. Foreign exchange products. 34
2.1.3. Overview of the operations of Kinh Do 34 branch
2.1.3.1. Some business indicators of Kinh Do branch 34
2.1.3.2. Branch operations in some years 35
2.2. CURRENT STATUS OF CREDIT EXPANSION ACTIVITIES FOR SMALL AND MEDIUM ENTERPRISES AT VIETNAM PROSPERITY BANK, KINH DO BRANCH 46
2.2.1. SME loan products at branch 46
2.2.2. Number of SMEs having credit relationships at Kinh Do Branch 47
2.2.3. Loan turnover for SMEs at Kinh Do branch 50
2.2.4. Outstanding credit balance for SMEs at Kinh Do branch 52
2.2.5. Credit balance structure for SMEs at VPBank Kinh Do branch
................................................................ ................................................................ ..............................55
2.2.5.1. Structure of outstanding loans to SMEs by term 55
2.2.5.2. Structure of outstanding loans to SMEs by currency 56
2.2.5.3. Structure of outstanding loans of SMEs at VPBank Kinh Do by economic sector. ..57
2.2.5.4. Outstanding loan structure for SMEs by industry at VPBank Kinh Do ...58
2.2.6. Profit from credit activities for SMEs 60
2.3. GENERAL ASSESSMENT OF CREDIT EXPANSION ACTIVITIES FOR SME AT VPBANK KINH DO BRANCH 62
2.3.1. Achievements 62
2.3.2. Limitations and causes. 64
2.3.2.1. Limitation 64
2.3.2.2. Cause 65
- Objective reasons 65
- Subjective causes from the branch side. 67
CONCLUSION CHAPTER II 68
CHAPTER III: SOLUTIONS TO EXPAND CREDIT TO SMALL AND MEDIUM ENTERPRISES AT VIETNAM PROSPERITY BANK, KINH DO BRANCH 69
3.1. CREDIT ACTIVITIES ORIENTATION OF VIETNAM PROSPERITY BANK, KINH DO BRANCH FOR SMALL AND MEDIUM ENTERPRISES IN THE COMING TIME 69
3.1.1. Difficulties of SMEs in the current Vietnamese economy 69
3.1.2. State's policy on developing SMEs 72
3.1.3. General operating direction of VPbank Kinh Do branch 74
3.1.4. Investment orientation of SMEs credit of VPbank Kinh Do branch .75
3.2. SOLUTIONS TO EXPAND SME CREDIT AT VPBANK KINH DO BRANCH 76
Direct solution group: 76
3.2.1. Building a separate credit strategy for SME customers 77
3.2.1.1. Perfecting the credit granting process for SMEs 77
3.2.1.2. Diversify credit products for SMEs in the direction of improving the quality of traditional services and developing new services 77
3.2.1.3. Building a flexible interest rate mechanism for SMEs: 79
3.2.1.4. Develop a marketing strategy targeting SMEs, strengthening the close relationship between VPBank Kinh Do branch and SMEs 79
3.2.2. Improve the quality of credit appraisal for SMEs, properly implement credit procedures, enhance consulting activities, and support businesses. 82 Support solution group 83
3.2.3. Organize capital mobilization well at the Branch to meet the capital balance of the entire Bank 83
3.2.4. Perfecting the organizational model, improving the qualifications of credit officers 84
3.2.5. Expand lending to various types of businesses and business lines 85
3.2.6. Perfecting the loan guarantee mechanism for SMEs in an expanding direction. 85
3.2.7. Perfecting the information collection and processing system, developing banking technology. 86
3.3. SOME RECOMMENDATIONS TO EXPAND CREDIT TO SMALL AND MEDIUM ENTERPRISES 87
3.3.1. Recommendations for state management agencies 87
3.3.2. Recommendations for the State Bank 90
3.3.3. Recommendations for VPbank 91
3.3.4. Recommendations for the Association of SMEs 93
3.3.5. Recommendations for SMEs 94
CHAPTER III CONCLUSION 95
CONCLUSION 96
LIST OF REFERENCES 98
INTRODUCTION
1. URGENCY OF THE TOPIC
Accounting for nearly 97% of the total number of enterprises registered to operate under the Enterprise Law, SMEs, together with nearly 3 million individual business households and 133,000 farms and cooperatives, have contributed 60% of the country's GDP. However, SMEs' access to official capital from credit institutions is still limited, not commensurate with their potential and advantages to contribute to socio-economic development.
Established in 1993, Vietnam Prosperity Bank (formerly Vietnam Joint Stock Commercial Bank for Non-State Enterprises (VPBANK) is one of the banks that has accompanied non-state enterprises since the beginning of the economic opening. With the orientation of retail banking and the strategic goal of being in the top 5 leading retail joint stock commercial banks in Vietnam, VPBank's customer base is the group of individual customers and SMEs. Since 2012, according to Directive 01 of the State Bank dated February 13, 2012, controlling the proportion of outstanding loans for discouraged sectors compared to the total outstanding loans, at the same time, the State Bank recommends that banks focus on lending capital to priority sectors such as lending to SMEs, rural agriculture, import and export, etc., expanding outstanding loans to SMEs for VPBank has become even more important to ensure the bank's profits as well as contribute to helping DNV&N, ensuring the interests of both parties.
Seeing the urgency of the topic: "Expanding credit for small and medium enterprises at Vietnam Prosperity Bank, Kinh Do branch", I chose this topic to research for my master's thesis.
2. RESEARCH PURPOSE OF THE TOPIC.
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- Firstly, the topic systematizes knowledge about credit for SMEs, thereby seeing the importance of expanding credit for SMEs in commercial banks.
- Second, the topic examines in a general and systematic way the current status of credit activities for SMEs at Vietnam Prosperity Bank, Kinh Do branch in recent times.
- Finally, propose some solutions and recommendations to expand credit for SMEs at Vietnam Prosperity Bank, Kinh Do branch.
3. OBJECTS AND SCOPE OF RESEARCH
The thesis studies the current situation of credit expansion for SMEs at VPBank Kinh Do branch in the period 2011-2014.
The mobilized capital mentioned in the article is the capital mobilized by the branch through deposits, excluding forms of mobilization such as equity capital, bonds... because the topic is limited to the scope of the branch, not all sources of bank capital.
Another limitation is that lending to small and medium enterprises is not in foreign currency.
4. RESEARCH METHODS
Collect data and documents on credit activities, main products and services, lending products for small and medium enterprises (SMEs), the number of SMEs with credit relationships, loan turnover for SMEs, outstanding credit balance, credit balance structure for SMEs of VPBank - Kinh Do Branch in the period of 2011-2014 through the following indicators: Sales, Outstanding credit balance, credit balance structure, profit from credit activities for SMEs... to have solutions and recommendations to expand
Credit activities for SMEs at VPBank - Kinh Do branch in particular and at the Vietnamese banking system in general.
5. THESIS STRUCTURE
In addition to the introduction, conclusion, list of abbreviations, list of tables, list of references, the thesis structure consists of 3 chapters.
Chapter 1: General theoretical basis for expanding bank credit to small and medium enterprises in the current economic context.
Chapter 2: Current status of credit activities for small and medium enterprises at Vietnam Prosperity Bank, Kinh Do branch.
Chapter 3: Credit expansion solutions for small and medium enterprises at Vietnam Prosperity Bank, Kinh Do branch.
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CHAPTER I: GENERAL THEORETICAL BASIS ON EXPANDING BANK CREDIT TO SMALL AND MEDIUM ENTERPRISES IN THE CURRENT ECONOMIC CONTEXT
1.1. OVERVIEW OF SMALL AND MEDIUM ENTERPRISES IN TODAY'S ECONOMY.
1.1.1. Concept of small and medium enterprises
To understand what a small and medium enterprise is, we first need to understand what an Enterprise is. In Vietnam, according to the Enterprise Law 2014: “An enterprise is an economic organization with its own name, its own assets, its stable transaction office, and is registered for business in accordance with the provisions of law for the purpose of carrying out business activities”.
Concept of Small and Medium Enterprises:
Each country has different socio-economic conditions and has its own characteristics. The classification of enterprises is therefore not uniform in countries around the world. The concept of enterprise size in general and the concept of small and medium enterprises in particular only has meaning within the national territory, at certain times. However, defining SMEs for oneself plays an important role in the development strategy of each country, helping the support policies to be highly effective at each stage of economic development.
In general, in the world, the determination of SMEs is mainly based on two common groups of criteria: qualitative criteria and quantitative criteria.
Qualitative criteria : this group of indicators is based on basic characteristics of enterprises such as: low level of specialization, unprofessional management level... Using this criterion is very difficult to determine accurately on the basis of
realistic and subjective so it is for reference only, rarely used in practice.
Quantitative criteria : This group of indicators reflects quantitative indicators used independently or in combination, including: number of employees, asset value, business capital, revenue, profit. Many countries use quantitative indicators and each country uses different standards.
Table 1.1: Criteria for identifying SMEs in some countries
Nation/
Area
Classification of small and medium enterprises | Number of employees average | Investment capital | Revenue | |
A. GROUP OF DEVELOPED COUNTRIES | ||||
1. United States | Small and medium | 0-500 | No rules determine | Not specified |
2. Japan | For manufacturing For trade For the service industry | 1-300 1-100 1-100 | ¥ 0- 300 million ¥ 0- 100 million ¥ 0- 50 million | Not specified |
3. EU | Super Small Small Fit | < 10 < 50 < 250 | Not specified | Not specified < €7 million < €27 million |
B. DEVELOPING COUNTRIES GROUP | ||||
1. Thailand | Small and medium | No rules determine | < 200 Baht million | Not specified |
2. Malaysia | Small and medium | 0-150 | No rules determine | RM 0-25 million |
3. Philippines | Small and medium | < 200 | Peso 1.5- 60 million | Not specified |
C. GROUP OF ECONOMIC COUNTRIES IN TRANSITION | ||||
1. Russia | Small Fit | 1-249 250-999 | No rules determine | Not specified |
2. Middle Country | Small Fit | 50-100 101-500 | No rules determine | Not specified |
3. Hungary | Super Small Small Fit | 1-10 11-50 51-250 | Not specified | Not specified |
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Source: 1) Small and Medium Enterprises, APEC, 1998
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