Dak Lak province's planning on soil, natural conditions and forecasting development trends, therefore the promulgation of planning and recommendations for coffee production development by departments and agencies is really necessary for the future development of the coffee industry.
The coffee area grown and managed by the people themselves is up to 85%, the remaining 15% of the coffee area is managed by coffee companies under the Vietnam Coffee Corporation and foreign companies, so people lack many resource factors to produce coffee, in which credit capital plays an important role.
The State Bank's restructuring of commercial banks is still unstable, causing psychological instability for bank employees and greatly affecting people using bank services.
2.2. Research approach and bank credit analysis framework for coffee producing households
2.2.1.Research approach
The research process of bank credit for coffee producing households is approached from two aspects: access to bank credit and use of bank credit capital by coffee producing households. Factors affecting the process of accessing bank credit capital of coffee producing households and barriers to accessing credit capital of coffee producing households. After having credit capital for production, what is the impact of credit capital on the economy and society of coffee producing households?
Research on bank credit for coffee producing households is related to the relationship between lenders and borrowers, specifically commercial banks and coffee producing households, so starting from the household approach with the participatory rural assessment method, it fully reflects the process of accessing credit capital and using credit capital of coffee producing households. Bank credit for coffee producing households requires increasing income for coffee producing households, ensuring family life, improving the quality of life of coffee growers, especially ethnic minorities in the area. Therefore, it is not necessary to invest capital to develop coffee anywhere, but it must be in suitable ecological areas, because investing capital in suitable ecological areas will lead to guaranteed credit quality, contributing to increasing value for coffee growers, improving techniques for coffee producing households.
2.2.2.Bank credit analysis framework for coffee producing households
ACCESS TO CAPITAL
Credit capital supply of commercial banks: Lending policy ; Loan turnover; Outstanding loans; Bad debt Access to credit capital
Household production: Ability; Form; Approach
USE OF CAPITAL
Economy:
Average loan capital; Profit; Product yield; Output value; Profit/cost ratio; Return on capital.
Society:
Employment, knowledge and technical equipment
RESEARCH METHODOLOGY
Economic statistics | Cobb - Douglas production function |
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Heckman model | Expert method | Scoring method |
Group of factors on characteristics of coffee producing households
Group of factors on characteristics of commercial banks
Solutions to improve access to and use of credit capital of coffee producers in Dak Lak province | |||||
From the coffee producer side | From the banks | From the Government | |||
Other factors
-Natural conditions
-Consumer market
-Other factors.
Government Policy Factors
Figure 2.1: Bank credit analysis framework for coffee producing households
2.3. Research method
2.3.1. Select research site
Dak Lak is a province with strengths in coffee production. In 2014, the total coffee cultivation area of the province was 204,390 hectares, with an output of 453,441 tons, accounting for 39% of the total coffee output of the Central Highlands and 36% of the country's coffee output. Research on bank credit for coffee-producing households is related to credit institutions, which are commercial banks and coffee-producing households. Therefore, the research subjects include commercial banks and coffee-producing households. To conduct in-depth research on bank credit for coffee-producing households, we selected 3 districts and Buon Ma Thuot city, which are key coffee production areas of Dak Lak province. The main criteria for selecting research sites are the coffee production area, coffee output, coffee productivity of the research districts and the credit scale of commercial banks in the area [Appendix 6].
+ For commercial banks
The author selected five commercial banks including 01 100% state-owned commercial bank (Agribank Dak Lak), 02 state-owned joint stock banks (Vietinbank Dak Lak and BIDV Dak Lak) and 02 joint stock commercial banks (Dong A bank Dak Lak and Sacombank Dak Lak), representing the group of banks with large lending turnover to households out of a total of 30 commercial bank branches in Dak Lak province. These are banks with large market shares in rural agricultural lending, especially lending for coffee production [Appendix 13]. When interviewing credit officers at five commercial banks, the author will base on the number of transaction offices and branches of the banks to distribute appropriate interview questionnaires. Each transaction office will interview two credit officers lending in the field of coffee production households, the sample size of the credit officer interviews is 136 observations.
COMMERCIAL BANK
Banks
Agribank Dak Lak
Vietinbank Dak Lak
BIDV
Dak Lak
Sacombank Dak Lak
East Asia Dak Lak
Number of transaction offices
44 rooms x 2 tickets
7 rooms x 2 tickets
7 rooms x 2 tickets
6 rooms x 2 tickets
4 rooms x 2 tickets
Sample size: 88 + 14 + 14 +12 + 8 = 136 observations
Figure 2.2: Sample size of Dak Lak Provincial Commercial Bank survey
+ For coffee producers
Data were collected through direct interviews with coffee growing households in the area, the number of surveyed households was 320 households in 30 communes and wards representing 4 coffee growing districts and cities of Dak Lak province. The selected districts have different development conditions and represent coffee production in the whole Dak Lak province.
- Cu Mgar district is a purely agricultural district, coffee is considered one of the main crops of the district, with a coffee growing area of 36,001 hectares, accounting for 17.82% of the coffee growing area of the whole province.
-Krong Pak district is a district with a high urbanization rate, an important traffic hub, with strengths in developing coffee production as well as commercial business activities.
- Cu Kuin district was established just over 4 years ago, is a district mainly focused on agricultural activities, still has many difficulties in accessing credit capital to develop coffee production, however, it is a district with potential in developing agricultural production.
DAK LAK COFFEE PRODUCTION HOUSEHOLD
Criteria: Coffee area
Buon Ma Thuot City
Cu Mgar District
CuKuin District
KrongPak District
Criteria: Soil conditions according to planning
EuTur Commune
Hoa Thuan Commune
Quang Tin Commune
Eatar Commune
EaTieu Commune
EaTua Commune
EaPhe Commune
EaKenh Commune
Village 1
Village 7
Village Village Village Village Village Village
3
2 1
Adore Market
Village Village
Village
Village
Village
3
4
8 9
Village 18
Phuoc Phuoc Village
11
Trach Trach Thanh
New
1
2
Tan My Village
Sample size: 40 households x 8 communes x 16 villages/hamlets
= 320 observations
Figure 2.3: Sample size of coffee production households in Dak Lak province
-Buon Ma Thuot City is the political, economic, cultural and social center of the province and the Central Highlands region. The city center is the intersection of National Highway 14 with National Highway 26 and National Highway 27 connecting Buon Ma Thuot with the cities of Nha Trang, Da Lat and Pleiku. This is considered an important traffic hub, promoting the economic development of the entire province as well as the Central Highlands.
The samples were selected by stratified random method according to the criteria of coffee growing area and soil conditions according to the planning of Dak Lak province, without repeating the list. For farming households, households with coffee growing area of 0.5 ha or more and in the business period were selected from 2 representative communes of each district (because only households with a scale of 0.5 ha or more are eligible for bank loans). Each commune selected 2 representative villages/hamlets for in-depth research on coffee production at the household level. The number of households selected for interviews included 320 households from Cu M'gar district, Krong Pak district, Cu Kuin district and Buon Ma Thuot city.
The survey sample was selected using a stratified random sampling method. Specifically, based on our own time and financial conditions, in each district we randomly selected coffee producing households to conduct interviews using a pre-written questionnaire that was revised after the pilot survey. In case we could not contact the household head, we would interview the next household to ensure sufficient sample size for observation. The basis for determining and distributing the sample was based on the specific situation of the households in the districts.
The discussion survey questions include closed and open questions, information collected includes:
-Basic information about the surveyed household: Full name of household head, age of household head, gender, number of workers, population, educational level, main and secondary occupations, status, and ethnicity of the household.
- Household borrowing situation: Loan amount, loan term, loan interest rate, type of lending credit institution, repayment period, household borrowing purpose.
- Households' access to bank credit: Households' access to credit, advantages and difficulties in accessing bank credit of coffee producing households.
- Household capital use: Capital cost, loan purpose, productivity, income, profit, level and skills of coffee producing households after using credit capital.
- Households' awareness of bank credit: service attitude of CBTD, loan interest rate, limit and term of coffee production loan, coffee production loan process of commercial banks.
After completing the questionnaire, the author conducted a pilot survey in two districts in the area, then edited and completed the questionnaire and conducted an official survey of districts in Dak Lak province.
Step 2
Official survey questionnaire | Reliability Assessment | |
Preliminary investigation: Bank: n1=50; Coffee production households n2= 150
Step 1
Step 3
Research documents
Draft survey questions
Focus group (n= 10)
Step 4
Step 5
Policy suggestions, proposals
Official survey: Bank n1 = 136; Coffee production households n2 = 320
Data processing and analysis
Regression model
Discuss the results
Adjust the questionnaire
Building an investigation method
Figure 2.4: Thesis research process
2.3.2. Methods of collecting information and data
* Secondary information and data
+ Collected from central and local agencies. Credit policy documents related to agricultural and rural development, especially credit policies for coffee production, were also collected for research purposes.
+ Statistical yearbooks of provinces and districts over the years; Summary reports of the provincial State Bank, commercial banks in the province, documents published in specialized magazines...
* Primary data
Primary data were collected from representative samples of coffee producers and credit officers of commercial banks.
+ Coffee producing households include information on resources for coffee production, methods and forms of accessing bank credit, using bank credit, limitations in accessing credit and coffee cultivation practices and techniques... Data sources are surveyed and interviewed directly.
+ Credit officers at commercial banks include information on limitations and management in providing credit to coffee producers. This information is collected by interview method and survey form.
2.3.3. Methods of data synthesis and processing
- For secondary documents after collection, they are processed to eliminate unreliable documents and recalculate the necessary data to serve the research process.
- For primary documents after cleaning, they are compiled and processed using Excel and SPSS data processing software through statistical grouping. The grouping criteria are based on production scale, production type, credit limit, and credit period.
2.3.4. Analysis method
2.3.4.1. Economic statistical methods
+ Descriptive statistics: Assess the ability of commercial banks to provide credit capital for coffee production; Current status of access to credit capital of coffee producing households, use of credit capital of coffee producing households in Dak Lak province.
+ Comparative statistics: Compare indicators over time and space. Specifically, the changes in area and coffee output over the years; capacity and ability to meet credit capital such as loan turnover for coffee production households, outstanding loans for coffee production households, bad debts for coffee production households of commercial banks in the province.
2.3.4.2. Expert method
During the thesis research, the author participated in seminars on credit for coffee production organized by the State Bank of Dak Lak province, commercial banks in the province, the Department of Agriculture and Rural Development of the province, and the Trade Promotion Center of Dak Lak province. In addition, the author also consulted with leading experts of the province in the fields of finance, credit, and agriculture to contribute scientific comments to the thesis. This is the basis for the author to build a theoretical framework and perfect the solution for the thesis.