Factors Affecting Lending Efficiency.

This is an indicator reflecting lending efficiency, allowing to evaluate the efficiency of a bank's lending activities. The larger this indicator is, the more it proves that the bank has effectively used the mobilized capital.

Debt collection turnover

Credit Turnover (turns) =

In there:

Average outstanding balance

Average outstanding balance during the period =

( Beginning balance + Ending balance )

2

This indicator measures the speed of bank credit capital turnover, the time of debt collection of the bank is fast or slow. The faster the capital turnover, the better and the safer the investment. The higher this ratio, the faster the bank credit turnover, this also proves that debt collection is fast and on time, so this high ratio also proves that the credit quality of the bank is very good. On the other hand, fast credit capital turnover proves that the speed of money circulation in the economy is fast, the bank has participated in many production and circulation cycles of goods. With a certain amount of capital but due to the fast credit capital turnover, the bank can meet the credit capital needs of enterprises in business development.

Short-term loan costs

Cost ratio for one dollar of short-term loan =

Total short-term loan turnover.

The smaller this ratio is, the better. This ratio reflects the efficiency of capital disbursement. Short-term lending costs depend on many factors, including input costs such as interest costs for capital mobilization, insurance costs, etc. Output costs include costs for paying workers' salaries, management costs, etc. However, in some cases, this index does not reflect reality: if lending costs increase while the investment portfolio does not increase, this ratio will be large. On the contrary, if there are many short-term loans made in a period (leading to an increase in lending revenue and loan turnover in a period), the cost per unit of capital will decrease.

Short-term debt

Short-term capital utilization efficiency =

Short-term capital

This indicator is very important because it evaluates the efficiency of capital use of the bank, has the bank used all its capacity in short-term lending?

c. Group of indicators reflecting safety.

Overdue short-term loans

Current debt ratio overdue	=	*100%
	Total short-term loans

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• Qos Assurance Methods for Multimedia Communications zt2i3t4l5ee zt2a3gs zt2a3ge zc2o3n4t5e6n7ts low. The EF PHB requires a sufficiently large number of output ports to provide low delay, low loss, and low jitter. EF PHBs can be implemented if the output port's bandwidth is sufficiently large, combined with small buffer sizes and other network resources dedicated to EF packets, to allow the router's service rate for EF packets on an output port to exceed the arrival rate λ of packets at that port. This means that packets with PHB EF are considered with a pre-allocated amount of output bandwidth and a priority that ensures minimum loss, minimum delay and minimum jitter before being put into operation. PHB EF is suitable for channel simulation, leased line simulation, and real-time services such as voice, video without compromising on high loss, delay and jitter values. Figure 2.10 Example of EF installation Figure 2.10 shows an example of an EF PHB implementation. This is a simple priority queue scheduling technique. At the edges of the DS domain, EF packet traffic is prioritized according to the values ​​agreed upon by the SLA. The EF queue in the figure needs to output packets at a rate higher than the packet arrival rate λ. To provide an EF PHB over an end-to-end DS domain, bandwidth at the output ports of the core routers needs to be allocated in advance to ensure the requirement μ > λ. This can be done by a pre-configured provisioning process. In the figure, EF packets are placed in the priority queue (the upper queue). With such a length, the queue can operate with μ > λ. Since EF was primarily used for real-time services such as voice and video, and since real-time services use UDP instead of TCP, RED is generally not suitable for EF queues because applications using UDP will not respond to random packet drop and RED will strip unnecessary packets. 2.2.4.2 Assured Forwarding (AF) PHB PHB AF is defined by RFC 2597. The purpose of PHB AF is to deliver packets reliably and therefore delay and jitter are considered less important than packet loss. PHB AF is suitable for non-real-time services such as applications using TCP. PHB AF first defines four classes: AF1, AF2, AF3, AF4. For each of these AF classes, packets are then classified into three subclasses with three distinct priority levels. Table 2.8 shows the four AF classes and 12 AF subclasses and the DSCP values ​​for the 12 AF subclasses defined by RFC 2597. RFC 2597 also allows for more than three separate priority levels to be added for internal use. However, these separate priority levels will only have internal significance. PHB Class PHB Subclass Package type DSCP AF4 AF41 Short 100010 AF42 Medium 100100 AF43 High 100110 AF3 AF31 Short 011010 AF32 Medium 011100 AF33 High 011110 AF2 AF21 Short 010010 AF22 Medium 010100 AF23 High 010110 AF1 AF11 Short 001010 AF12 Medium 001100 AF13 High 001110 Table 2.8 AF DSCPs The AF PHB ensures that packets are forwarded with a high probability of delivery to the destination within the bounds of the rate agreed upon in an SLA. If AF traffic at an ingress port exceeds the pre-priority rate, which is considered non-compliant or “out of profile”, the excess packets will not be delivered to the destination with the same probability as the packets belonging to the defined traffic or “in profile” packets. When there is network congestion, the out of profile packets are dropped before the in profile packets are dropped. When service levels are defined using AF classes, different quantity and quality between AF classes can be realized by allocating different amounts of bandwidth and buffer space to the four AF classes. Unlike EF, most AF traffic is non-real-time traffic using TCP, and the RED queue management strategy is an AQM (Adaptive Queue Management) strategy suitable for use in AF PHBs. The four AF PHB layers can be implemented as four separate queues. The output port bandwidth is divided into four AF queues. For each AF queue, packets are marked with three “colors” corresponding to three separate priority levels. In addition to the 32 DSCP 1 groups defined in Table 2.8, 21 DSCPs have been standardized as follows: one for PHB EF, 12 for PHB AF, and 8 for CSCP. There are 11 DSCP 1 groups still available for other standards. 2.2.5.Example of Differentiated Services We will look at an example of the Differentiated Service model and mechanism of operation. The architecture of Differentiated Service consists of two basic sets of functions: Edge functions: include packet classification and traffic conditioning. At the inbound edge of the network, incoming packets are marked. In particular, the DS field in the packet header is set to a certain value. For example, in Figure 2.12, packets sent from H1 to H3 are marked at R1, while packets from H2 to H4 are marked at R2. The labels on the received packets identify the service class to which they belong. Different traffic classes receive different services in the core network. The RFC definition uses the term behavior aggregate rather than the term traffic class. After being marked, a packet can be forwarded immediately into the network, delayed for a period of time before being forwarded, or dropped. We will see that there are many factors that affect how a packet is marked, and whether it is forwarded immediately, delayed, or dropped. Figure 2.12 DiffServ Example Core functionality: When a DS-marked packet arrives at a Diffservcapable router, the packet is forwarded to the next router based on Per-hop behavior is associated with packet classes. Per-hop behavior affects router buffers and the bandwidth shared between competing classes. An important principle of the Differentiated Service architecture is that a router's per-hop behavior is based only on the packet's marking or the class to which it belongs. Therefore, if packets sent from H1 to H3 as shown in the figure receive the same marking as packets from H2 to H4, then the network routers treat the packets exactly the same, regardless of whether the packet originated from H1 or H2. For example, R3 does not distinguish between packets from h1 and H2 when forwarding packets to R4. Therefore, the Differentiated Service architecture avoids the need to maintain router state about separate source-destination pairs, which is important for network scalability. Chapter Conclusion Chapter 2 has presented and clarified two main models of deploying and installing quality of service in IP networks. While the traditional best-effort model has many disadvantages, later models such as IntServ and DiffServ have partly solved the problems that best-effort could not solve. IntServ follows the direction of ensuring quality of service for each separate flow, it is built similar to the circuit switching model with the use of the RSVP resource reservation protocol. IntSer is suitable for services that require fixed bandwidth that is not shared such as VoIP services, multicast TV services. However, IntSer has disadvantages such as using a lot of network resources, low scalability and lack of flexibility. DiffServ was born with the idea of ​​solving the disadvantages of the IntServ model. DiffServ follows the direction of ensuring quality based on the principle of hop-by-hop behavior based on the priority of marked packets. The policy for different types of traffic is decided by the administrator and can be changed according to reality, so it is very flexible. DiffServ makes better use of network resources, avoiding idle bandwidth and processing capacity on routers. In addition, the DifServ model can be deployed on many independent domains, so the ability to expand the network becomes easy. Chapter 3: METHODS TO ENSURE QoS FOR MULTIMEDIA COMMUNICATIONS In packet-switched networks, different packet flows often have to share the transmission medium all the way to the destination station. To ensure the fair and efficient allocation of bandwidth to flows, appropriate serving mechanisms are required at network nodes, especially at gateways or routers, where many different data flows often pass through. The scheduler is responsible for serving packets of the selected flow and deciding which packet will be served next. Here, a flow is understood as a set of packets belonging to the same priority class, or originating from the same source, or having the same source and destination addresses, etc. In normal state when there is no congestion, packets will be sent as soon as they are delivered. In case of congestion, if QoS assurance methods are not applied, prolonged congestion can cause packet drops, affecting service quality. In some cases, congestion is prolonged and widespread in the network, which can easily lead to the network being "frozen", or many packets being dropped, seriously affecting service quality. Therefore, in this chapter, in sections 3.2 and 3.3, we introduce some typical network traffic load monitoring techniques to predict and prevent congestion before it occurs through the measure of dropping (removing) packets early when there are signs of impending congestion. 3.1. DropTail method DropTail is a simple, traditional queue management method based on FIFO mechanism. All incoming packets are placed in the queue, when the queue is full, the later packets are dropped. Due to its simplicity and ease of implementation, DropTail has been used for many years on Internet router systems. However, this algorithm has the following disadvantages: − Cannot avoid the phenomenon of “Lock out”: Occurs when 1 or several traffic streams monopolize the queue, making packets of other connections unable to pass through the router. This phenomenon greatly affects reliable transmission protocols such as TCP. According to the anti-congestion algorithm, when locked out, the TCP connection stream will reduce the window size and reduce the packet transmission speed exponentially. − Can cause Global Synchronization: This is the result of a severe “Lock out” phenomenon. Some neighboring routers have their queues monopolized by a number of connections, causing a series of other TCP connections to be unable to pass through and simultaneously reducing the transmission speed. After those monopolized connections are temporarily suspended, Once the queue is cleared, it takes a considerable amount of time for TCP connections to return to their original speed. − Full Queue phenomenon: Data transmitted on the Internet often has an explosion, packets arriving at the router are often in clusters rather than in turn. Therefore, the operating mechanism of DropTail makes the queue easily full for a long period of time, leading to the average delay time of large packets. To avoid this phenomenon, with DropTail, the only way is to increase the router's buffer, this method is very expensive and ineffective. − No QoS guarantee: With the DropTail mechanism, there is no way to prioritize important packets to be transmitted through the router earlier when all are in the queue. Meanwhile, with multimedia communication, ensuring connection and stable speed is extremely important and the DropTail algorithm cannot satisfy. The problem of choosing the buffer size of the routers in the network is to “absorb” short bursts of traffic without causing too much queuing delay. This is necessary in bursty data transmission. The queue size determines the size of the packet bursts (traffic spikes) that we want to be able to transmit without being dropped at the routers. In IP-based application networks, packet dropping is an important mechanism for indirectly reporting congestion to end stations. A solution that prevents router queues from filling up while reducing the packet drop rate is called dynamic queue management. 3.2. Random elimination method – RED 3.2.1 Overview RED (Random Early Detection of congestion; Random Early Drop) is one of the first AQM algorithms proposed in 1993 by Sally Floyd and Van Jacobson, two scientists at the Lawrence Berkeley Laboratory of the University of California, USA. Due to its outstanding advantages compared to previous queue management algorithms, RED has been widely installed and deployed on the Internet. The most fundamental point of their work is that the most effective place to detect congestion and react to it is at the gateway or router. Source entities (senders) can also do this by estimating end-to-end delay, throughput variability, or the rate of packet retransmissions due to drop. However, the sender and receiver view of a particular connection cannot tell which gateways on the network are congested, and cannot distinguish between propagation delay and queuing delay. Only the gateway has a true view of the state of the queue, the link share of the connections passing through it at any given time, and the quality of service requirements of the traffic flows. The RED gateway monitors the average queue length, which detects early signs of impending congestion (average queue length exceeding a predetermined threshold) and reacts appropriately in one of two ways: − Drop incoming packets with a certain probability, to indirectly inform the source of congestion, the source needs to reduce the transmission rate to keep the queue from filling up, maintaining the ability to absorb incoming traffic spikes. − Mark “congestion” with a certain probability in the ECN field in the header of TCP packets to notify the source (the receiving entity will copy this bit into the acknowledgement packet). Figure 3. 1 RED algorithm The main goal of RED is to avoid congestion by keeping the average queue size within a sufficiently small and stable region, which also means keeping the queuing delay sufficiently small and stable. Achieving this goal also helps: avoid global synchronization, not resist bursty traffic flows (i.e. flows with low average throughput but high volatility), and maintain an upper bound on the average queue size even in the absence of cooperation from transport layer protocols. To achieve the above goals, RED gateways must do the following: − The first is to detect congestion early and react appropriately to keep the average queue size small enough to keep the network operating in the low latency, high throughput region, while still allowing the queue size to fluctuate within a certain range to absorb short-term fluctuations. As discussed above, the gateway is the most appropriate place to detect congestion and is also the most appropriate place to decide which specific connection to report congestion to. − The second thing is to notify the source of congestion. This is done by marking and notifying the source to reduce traffic. Normally the RED gateway will randomly drop packets. However, if congestion If congestion is detected before the queue is full, it should be combined with packet marking to signal congestion. The RED gateway has two options: drop or mark; where marking is done by marking the ECN field of the packet with a certain probability, to signal the source to reduce the traffic entering the network. − An important goal that RED gateways need to achieve is to avoid global synchronization and not to resist traffic flows that have a sudden characteristic. Global synchronization occurs when all connections simultaneously reduce their transmission window size, leading to a severe drop in throughput at the same time. On the other hand, Drop Tail or Random Drop strategies are very sensitive to sudden flows; that is, the gateway queue will often overflow when packets from these flows arrive. To avoid these two phenomena, gateways can use special algorithms to detect congestion and decide which connections will be notified of congestion at the gateway. The RED gateway randomly selects incoming packets to mark; with this method, the probability of marking a packet from a particular connection is proportional to the connection's shared bandwidth at the gateway. − Another goal is to control the average queue size even without cooperation from the source entities. This can be done by dropping packets when the average size exceeds an upper threshold (instead of marking it). This approach is necessary in cases where most connections have transmission times that are less than the round-trip time, or where the source entities are not able to reduce traffic in response to marking or dropping packets (such as UDP flows). 3.2.2 Algorithm This section describes the algorithm for RED gateways. RED gateways calculate the average queue size using a low-pass filter. This average queue size is compared with two thresholds: minth and maxth. When the average queue size is less than the lower threshold, no incoming packets are marked or dropped; when the average queue size is greater than the upper threshold, all incoming packets are dropped. When the average queue size is between minth and maxth, each incoming packet is marked or dropped with a probability pa, where pa is a function of the average queue size avg; the probability of marking or dropping a packet for a particular connection is proportional to the bandwidth share of that connection at the gateway. The general algorithm for a RED gateway is described as follows: [5] For each packet arrival Caculate the average queue size avg If minth ≤ avg < maxth div.maincontent .s1 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 15pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 15pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .s4 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s5 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s6 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .s7 { color: black; font-family:Wingdings; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s8 { color: black; font-family:Arial, sans-serif; font-style: italic; font-weight: bold; text-decoration: none; font-size: 15pt; } div.maincontent .s9 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .s10 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 9pt; vertical-align: 6pt; } div.maincontent .s11 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 13pt; } div.maincontent .s12 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 10pt; } div.maincontent .s13 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-d
• Discussion on Causes, Limitations and Existing Problems of Short-Term Loan Service Quality Khdn

This is an indicator to assess the level of short-term credit safety as well as the lending efficiency of commercial banks. If a commercial bank has too many overdue debts, the bank is at risk of not being able to recover the loans, causing capital loss affecting the payment of overdue debts. It will be assessed as having low lending efficiency and high risk. Therefore, banks always want this ratio to be low.

Short-term bad debt

Short-term bad debt ratio	=	*100%
	Short-term loan balance

Bad debt is debt classified into groups 3, 4, 5. The ratio of bad debt to total outstanding short-term loans is the ratio to evaluate the quality of short-term lending activities of commercial banks. Therefore, the lower this ratio, the higher the quality of the bank's lending activities.

Outstanding short-term loans with collateral

Short Loan Rate Limited liability	=	*100%
	Short-term loan balance

Lending efficiency must include both safety factors and collaterals that contribute to the safety of that loan. Most bank loans have collaterals because collaterals limit the bank's capital loss. In case the bank's customers cannot repay the debt, the bank will sell the collaterals to compensate for the loss of that loan. Therefore, to increase efficiency and safety of loans, banks need to limit lending without collaterals.

Loan portfolio structure:

Diversification of loan portfolio according to the principle: “Don't put all your eggs in one basket”, maintaining a diversified loan portfolio, with many components

With different economic sectors and business lines, commercial banks will avoid unsystematic risks. Depending on the scale, potential and development of the market, commercial banks build a reasonable loan portfolio, ensuring safety and profitability in the bank's lending activities.

d. Group of indicators reflecting profitability.

Short term lending profit

Short-term profitability	=	*100%
	Short-term loan balance

This indicator reflects the profitability of short-term lending activities. The higher this ratio, the more effective the short-term loans are, bringing in more revenue for the bank. Therefore, the bank always wants this ratio to be as high as possible. To achieve this, the bank needs to strictly follow the lending process, collect debts and resolve overdue debt issues well.

1.6 Factors affecting lending efficiency.

Short-term lending activities take place between two entities: commercial banks and customers. In addition, lending activities are in an environment regulated by law, macroeconomic policies... are the conditions of the economy. Therefore, to have a highly effective loan, it is necessary to have favorable conditions from the parties involved.

1.6.1 On the Bank side

Credit policy: A commercial bank's credit policy is a system of documents reflecting a bank's financing platform, aiming to provide general guidance to credit officers and bank employees, enhance specialization in credit analysis, create general unity in credit activities to limit risks and increase profitability.

For each bank, lending is always the activity that accounts for the highest proportion in the asset structure and income structure, but at the same time it is also the most complex and potentially risky activity. Therefore, to ensure the goal of improving efficiency, controlling risks, sustainable development, and meeting legal standards, it is necessary to

It is necessary to build a consistent and reasonable credit policy, suitable to the internal characteristics and specificity of the system, promoting strengths, overcoming and limiting weaknesses with the goal of safety and profitability.

An appropriate credit policy must harmoniously combine the interests of depositors and borrowers with the bank's goals, which will help the bank's lending activities minimize risks, improve quality and thus increase the effectiveness of loans. On the contrary, an inaccurate and unreasonable credit policy can push the bank into a state of loss or worse, bankruptcy.

A credit policy is considered complete if it is built in accordance with the overall goals of the bank in each period, plays the role of guiding the bank's credit activities, and meets the capital needs of the economy. Therefore, a commercial bank that wants to have good credit quality and high efficiency must have a clear credit policy that is suitable for its bank and suitable for the economic situation.

Customer policy: allows the bank to determine a suitable loan portfolio for each type of customer in each specific period. Including content about customer objects, legal requirements. Thereby, the bank will identify key customer objects, establish preferential policies as well as restrictions for each customer object.

Loan appraisal ability: In the credit process of banks, loan appraisal is the first and important step. Appraisal is the assessment, examination, and prediction of the accuracy, safety, and effectiveness of a credit contract. The results of the appraisal process will be used to decide whether to make a loan or not. Although it is impossible to avoid all errors, doing this step well will create the premise for the full and timely recovery of both principal and interest. The appraisal process not only requires strict compliance with records and information security, but also requires professional qualifications and flexible judgment of staff. For short-term loans, due to the specific nature of "regularity" and timeliness, the appraisal step also requires speed to meet

customer capital needs, while ensuring accuracy and safety for the loan.

Loan monitoring and bank situation handling: Because business activities always have many potential risks that businesses and banks cannot foresee. Therefore, loan monitoring plays an important role in helping banks overcome this factor. Monitoring activities often focus on whether customers comply with the purpose of the loan, the business situation of the business, the situation of assets, and the process of repaying bank loans. If the bank does this well, it will help detect customer violations in a timely manner so that it can come up with measures to help the business's production activities achieve the highest efficiency, contributing to improving loan efficiency.

Banking staff qualifications: In the business activities of commercial banks in particular as well as all other sectors and fields of the economy, people always play the most important role, the subject of all actions . In credit activities as well, credit officers are the ones who play a decisive role in the accuracy of lending decisions because they are the ones who directly understand the customers best. Therefore, credit officers will affect the quality of loans and thus affect lending efficiency . The quality of credit officers is assessed on two criteria: professional qualifications and professional ethics:

The professional level of credit officers is one of the necessary conditions to ensure the effectiveness of lending. Professional level includes professional knowledge and practical experience. Thereby, it affects the ability to assess credit and make lending decisions.

Professional ethics of credit officers is a prerequisite to ensure highly effective lending activities.

In the context of a developing economy, industries and sectors are increasingly complex and the intellectual factor is increasing. In addition, the banking industry is a special business sector of the economy, where the most modern technologies are used along with the complexity and sophistication in handling transactions.

The profession always requires bank officers to have sufficient professional qualifications and professional ethics. The qualifications of credit officers directly affect the effectiveness of lending activities, first of all in the work of credit appraisal, credit analysis, and credit management. On the other hand, the bank's customers are increasingly diverse, operating in many different fields. Therefore, credit officers must also have qualifications and understanding of many fields to be able to evaluate customers and business plans.

Credit Information: Information is a sensitive issue and is decisive for the success or failure of a business. This is increasingly evident in a developing economy. Commercial banks operate in a field that is very sensitive to changes in the economy and is highly risky. Therefore, information is extremely important to banks. In the process of their operations, banks cannot obtain all the necessary information: about customers, customers' credit relationships with other credit institutions, collateral, other relationships of customers, customers' production and business situation... All information affects the decisions of credit officers in the loan appraisal process. Lack of information creates great risks for banks, creating adverse selection risks. Therefore, the more accurate information a bank has, the more competitive advantage it will have.

Organization and management: Organization and management are important steps in all activities in general. In banking activities, organization and management play a decisive role in the professionalism and efficiency of lending activities. Organization and management, if closely coordinated, will contribute to minimizing risks and improving the efficiency of lending activities in particular and the business activities of commercial banks in general.

Internal control work: This is a work that banks must always carry out regularly to maintain the efficiency of the bank's business operations in accordance with the bank's goals, policies and regulations set by the State. To do this work well, the bank needs a good team.

In terms of expertise, work objectively, honestly and have a strict reward and punishment system. Only then can lending activities ensure that they follow the required procedures to improve the effectiveness of the loan.

Level of application of banking technology: Nowadays, the application of technological advances in banking activities has brought many positive results to banks as well as better satisfied the diverse needs of customers. In lending activities, technology also plays a very important role, especially in evaluating and analyzing financial indicators. Thanks to modern software, it is possible to accurately and objectively calculate financial indicators, from which credit officers can correctly assess the financial situation of customers and make accurate and quick lending decisions. Modern technology also helps shorten transaction time, simplify procedures, bring more convenience to customers, thereby attracting more customers to use banking services.

1.6.2 On the customer side.

Customers are partners or debtors of the bank in lending activities. Therefore, customers have a great influence on the effectiveness of the bank's lending activities. When the lending has not yet taken place, the role of the bank's conditions is important. However, when the loan contract is signed, the customer has borrowed capital from the bank, it is the customer who decides the effectiveness of the loan, thereby affecting the repayment of the debt to the bank. The customer's ability to repay is determined by the following factors:

Financial situation of the enterprise: When reviewing customer profiles, only customers with good financial status are considered for loans. Banks use financial statements of enterprises as the most important information channel to assess the financial situation of customers. Through balance sheets, business performance reports, cash flow reports... Banks build groups of indicators on: Customers' ability to pay debts, operating capacity, capital balance index, groups of indicators reflecting profitability... and thereby assess debt repayment ability, analyze risks, quality and efficiency.

customer's business performance. If the customer's financial potential is good and meets the bank's conditions, the loan will be less risky.

Loan usage plan: A good business production plan will bring high profits to customers, thereby ensuring full and timely repayment to the bank. At that time, the loan has brought income to both customers and the bank, meaning it has been used effectively and improved the efficiency of the loan.

Business owner's management, operational capacity and business ethics: One of the important requirements when considering lending to customers is that the credit officer meets directly and negotiates with the business owner. Through this meeting and exchange process, the credit officer can understand more about the loan object, about experience, knowledge, awareness and determination to do business. Although this is a non-financial factor, it is extremely important for the business and affects the quality of credit. When the business owner has high professional qualifications and good leadership capacity, right from the first step of establishing an investment project, it shows the possibility of success of the project and the ability to use bank loans effectively. On the contrary, if the business owner does not have the necessary management qualifications and experience, the loan will not be effective, the quality of the loan will not be guaranteed and the worst result is that the bank will lose capital.

Customer ethics: In addition to considering the customer's professional qualifications, credit officers must also evaluate customers on the ethical aspect. Honesty and the level of compliance with commitments in the credit contract are prerequisites to ensure the safety and effectiveness of the loan.

1.6.3 On the economic side.

Economic environment: All activities of both enterprises and banks cannot be separated from the general fluctuations of the market. Any fluctuations of the macro economy can have an impact on the performance of banks and enterprises. A stable economic growth is a favorable condition.