MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY
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DO THI THU HIEN
D
RESEARCH ON FACTORS AFFECTING LENDING DECISIONS FOR SMALL AND MEDIUM ENTERPRISE CUSTOMERS AT BANKS
TRADE IN THE NORTHWEST REGION OF VIETNAM
DOCTORAL THESIS
FINANCE - BANKING INDUSTRY
HANOI, 2020
MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY
---- ----
DO THI THU HIEN
D
RESEARCH ON FACTORS AFFECTING LENDING DECISIONS FOR SMALL AND MEDIUM ENTERPRISE CUSTOMERS AT BANKS
TRADE IN THE NORTHWEST REGION OF VIETNAM
Major: FINANCE - BANKING Code: 9340201
DOCTORAL THESIS
Scientific supervisor: Associate Professor, Dr. NGUYEN HUU TAI
HANOI, 2020
COMMITMENT
I have read and understand the academic integrity policy. I declare on my personal honor that this research was conducted by me and does not violate the requirements of academic integrity.
I hereby certify that the thesis topic: " Research on factors affecting lending decisions for small and medium-sized enterprise customers at commercial banks in the Northwest region of Vietnam " is my own research work.
Hanoi, date month year 2020
PhD student
Do Thi Thu Hien
ACKNOWLEDGEMENTS
First of all, I would like to sincerely thank the Board of Directors of National Economics University for creating favorable conditions for me to complete this thesis.
I would like to sincerely thank Associate Professor Dr. Nguyen Huu Tai - the scientific supervisor of the thesis, for helping me with the standards of content, knowledge and research methods to complete this thesis.
I would like to sincerely thank the teachers of the Institute of Finance - Banking, the Institute of Postgraduate Training for always accompanying, guiding me professionally, and helping me throughout the process of completing my thesis.
Finally, I would like to sincerely thank my family, friends, and colleagues at the Faculty of Economics - Tay Bac University for their enthusiastic support and help during my study and research.
Thank you very much everyone!
Hanoi, date month year 2020
PhD student
Do Thi Thu Hien
INDEX
COMMITMENT i
ACKNOWLEDGEMENTS ii
TABLE OF CONTENTS iii
LIST OF ABBREVIATIONS vi
LIST OF TABLES vii
LIST OF CHARTS AND DIAGRAMS ix
CHAPTER 1: GENERAL INTRODUCTION TO THE THESIS 1
1.1. Reasons for choosing topic 1
1.2. Overview of research situation related to topic 2
1.2.1. Concept and classification of hard information - soft information 3
1.2.2. The role of two types of information in commercial banks' lending decisions 5
1.2.3. The role of credit officers in bank lending decisions 9
1.2.4. Research Gap 11
1.3. Research objectives 13
1.4. Research question 13
1.5. Research object and scope 13
1.6. Research methods and procedures 14
1.6.1. Thesis research process 14
1.6.2. Research methods 15
1.7. Contributions of the thesis 18
1.7.1. New contributions in terms of academics and theory 18
1.7.2. New practical contributions 20
1.8. Thesis layout 20
CHAPTER 2: THEORETICAL BASIS OF FACTORS AFFECTING THE DECISION TO LEND SMALL AND MEDIUM ENTERPRISES IN COMMERCIAL BANKS 23
2.1. Theoretical basis for lending decisions for SME customers at commercial banks..23
2.1.1. Concept of small and medium enterprises 23
2.1.2. Lending to SMEs in commercial banks 24
2.1.2. Difficulties in accessing bank loans for SMEs 30
2.1.3. Loan Process and Decision for SMEs 37
2.1.4. Internal credit rating of commercial banks before making decisions
credit rating 41
2.1.5. Criteria for evaluating lending results of commercial banks 44
2.2. Theories related to lending decisions in commercial banks 45
2.2.1. Asymmetric Information Theory 45
2.2.2. Adverse selection theory of credit markets (Adverse selection) 46
2.2.3. Moral hazard in banking operations (Moral hazard) 48
2.2.4. Judgment and perception theory in decision making 49
2.2.5. Social capital theory 50
2.2.6. Applied theory in bank credit management 52
2.3. Overview of factors affecting lending decisions to SMEs 57
2.4. Research model and hypothesis 67
Chapter 2 Summary 68
CHAPTER 3: RESEARCH METHODOLOGY 69
3.1. Research design 69
3.2. Qualitative research 72
3.2.1. Objectives of qualitative research 72
3.2.2. Subjects and methods of qualitative research 72
3.2.3. Qualitative research results 74
3.3. Quantitative research 82
3.3.1. Quantitative research objectives 83
3.3.2. Quantitative research design 83
3.3.3. Formal quantitative research 91
CHAPTER 4: RESEARCH RESULTS 97
4.1. Current status of commercial banks' lending to small and medium enterprises in the Northwest sub-region 97
4.1.1. Criteria for classifying SMEs at commercial banks in the Northwest sub-region 97
4.1.2. Lending process and lending limit for SMEs at the Northwest Sub-regional Commercial Bank of Vietnam 99
4.1.3. Credit scoring process for SME customers in the Northwest sub-region ...101
4.1.4. Banking services of commercial banks for SMEs in the Northwest sub-region..103
4.1.3. Loan scale of commercial banks for SMEs in the Northwest sub-region...105 4.1.4. Credit structure of SMEs in the Northwest sub-region 108
4.1.5. Profit from lending to SMEs in the Northwest sub-region 110
4.1.6. Credit quality of loans to SMEs in the Northwest sub-region 111
4.1.7. Credit rating of SMEs at commercial banks in the Northwest sub-region 112
4.2. Descriptive statistics of survey results 115
4.2.1. Statistics on characteristics of surveyed subjects 115
4.2.2. Descriptive statistics of information affecting lending decisions of commercial banks 116
4.3. Testing the reliability of the scale 122
4.3.1. Testing the suitability of the scale 122
4.3.2. Exploratory factor analysis 125
4.3.3. Results of analysis of the importance of the information used in the appraisal
loan 130
4.4. Multivariate regression of factors affecting lending decisions of commercial banks 131
4.4.1. Multivariate regression of influencing factors 131
4.4.2. Summary of regression coefficients for lending decisions 132
Chapter 4 Summary 134
CHAPTER 5: DISCUSSION OF RESULTS AND RECOMMENDATIONS 135
5.1. Discussion of research results 135
5.1.1. Results of answering the first research hypothesis 135
5.1.2. Results of answering the second research hypothesis 141
5.2. Some recommendations 142
5.2.1. Recommendations for Commercial Banks - Head Office 142
5.2.2. Recommendations for Commercial Banks - Branches in the Northwest sub-region 145
5.2.3. Recommendations for SMEs in the Northwest sub-region 147
5.2.4. Recommendations to relevant organizations 149
5.3. Limitations of the thesis and future research directions 150
Chapter 5 Summary 151
CONCLUSION 152
LIST OF PUBLISHED WORKS RESEARCH RESULTS OF THESIS 154
REFERENCES 155
APPENDIX 166
LIST OF ABBREVIATIONS
ABL
Asset Based Lending | |
Real Estate | Real estate |
CBTD | Credit Officer |
CIEM | Central Institute for Economic Research |
CRE | Commercial real estate lending |
DN | Business |
SMEs | Small and Medium Enterprises |
EFA | Exploratory factor analysis |
EFA | Exploratory factor analysis |
FSL | Loan Financial Statements |
LEASE | Lease |
MV | Motor Vehicle Loans |
NH | Bank |
State Bank of Vietnam | State Bank |
Commercial Bank | Commercial Bank |
Central Bank | Central Bank |
RELATE | Relationship lending |
RRE | Residential real estate loans |
SBCS | Small Business Credit Scoring |
Sig. | Significance level |
TC | Finance |
TCTD | Credit institution |
TSDB | Collateral |
TSDB | Collateral |
VCCI | Vietnam Chamber of Commerce and Industry |
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