Tài liệu Situation, solutions to improve the efficiency of credit operation to smes in the sai gon joint stock commercial bank (scb), hong bang branch, hai phong city

1 Graduation Thesis DECLARATION Signed hereby, certiy hereby that this is my own research. The content and the fggres presented in the thesis refected a iair and trge sitgaton oi the internship organizaton. Ha Noi, May 9th, 2016 Stgdent Pham Thi Thgy Hang Pham Thi Thuy Hang CQ50/51.02 2 Graduation Thesis ABSTRACT This thesis is aimed at stgdying sitgaton and solgtons to improve the efficiency oi credit operaton to SMis in Sai Gon Joint Stoce Commercial Bane (SCB), Hong Bang branch, Hai Phong city irom 2012 to 2014. This thesis was clearly analyzed throggh gsing the iollowing methodology: comparing, statstcs, analysis, synthesis, descripton, etc. All data were collected irom the fnancial statement, income statement, anngal reports oi SCB – Hong Bang branch irom 2012 to 2014. It can be said that the branch has gained some achievements in improving the efficiency oi credit operaton throggh iacilitatng loans to SMis in the period oi economic crisis, sgccess in controlling bad debts and overdge loans and implementng some appropriate strategies abogt the strgctgre oi banes' loans and loan secgrity. However, there are stll shortcomings inclgding low loan sales to SMis, low ogtstanding loans to SMis, gnproiessional in lending procedgres, only iocgsing on loans to SMis in the short term. From the resglts, some proposals were given to the Government, the State Bane oi Viet Nam, SMis and SCB's headqgarter. Hopeiglly, this thesis will provide general sgpport ior SCB–Hong Bang branch, Hai Phong city to have a beter resglt in credit operaton to SMis in the near igtgre. Pham Thi Thuy Hang CQ50/51.02 3 Graduation Thesis ACKNOWLEGEMENTS To iglfll this thesis, I wogld liee to give my special thanes to many people ior their signifcant helps, contribgtons, recommendatons and encogragement dgring my writng process. Firstly and ioremost, I wogld liee to give my heartelt thanes to Ms Pham Phgong Oanh, my sgpervisor who has provided me the valgable sgpport, practcal insights and helpigl ieedbace irom the beginning oi iorming thesis’s topic gntl the completon. Secondly, I also express proiognd grattgde to all stafs oi SCB – Hong Bang branch, Hai Phong city, credit department and especially Mr Do Thanh Trgng, my instrgctor ior his enthgsiastc instrgctons and gseigl data that he gave to me. In additon, I highly appreciated indirect sgpport irom Finance - Accogntng Department stafs, who gave me a straightway instrgcton, reminded me oi the internship schedgle, sgpported reierence docgments, and were always available anytme ior help. Finally, I owe my sincere thanes to my iamily and iriends. Their contngogs assistance and encogragement helped me a lot dgring tme oi internship and atempt to fnish this stgdy. Pham Thi Thuy Hang CQ50/51.02 4 Graduation Thesis TABLE OF CONTENTS DECLARATION i ABSTRACT ii ACKNOWLEGEMENTS iii TABLE OF CONTENTS iv LIST OF ABBREVIATIONS vii INTRODUCTION 1 CHAPTER 1 4 LITERATURE REVIEW 4 1.1. Commercial banks 4 1.1.1. Definition 4 1.1.2. Basic activities of commercial banks. 5 1.1.3. Bank credit 1.2. Small and medium - sized enterprises (SMEs) 8 11 1.2.1. Definition 11 1.2.2. Characteristics of SMEs 11 1.2.3. Roles of SMEs 12 1.2.4. Standards of SMEs in the world and Viet Nam 13 1.2.5. SMEs in Viet Nam and Hai Phong 1.3. Credit operations to SMEs 15 16 1.3.1. Definition of lending 16 1.3.2. Features of credit operation 17 1.3.3. Goals of credit operation 17 1.3.4. The efficiency of bank credit 1.4. The necessity of credit efficiency improvement 18 22 CHAPTER 2: CURRENT SITUATION OF CREDIT OPERATION TO SMEs IN SAI GON JOINT STOCK COMMERCIAL BANK, HONG BANG BRANCH, HAI PHONG CITY 23 Pham Thi Thuy Hang CQ50/51.02 5 Graduation Thesis 2.1. Overview about Sai Gon Joint Stock Commercial Bank, Hong Bang branch, Hai Phong city 23 2.1.1. The formation and development of Sai Gon Joint Stock Commercial Bank, Hong Bang branch, Hai Phong city 23 2.1.2. Structure of SCB, Hong Bang branch, Hai Phong city 24 2.2. Current situation of business operation in SCB, Hong Bang branch, Hai Phong city in 2012-2014 25 2.2.1. Capital mobilization activity 25 2.2.2. Lending activity 28 2.2.3. Business result of SCB, Hong Bang branch, Hai Phong city 30 2.3. Current situation of credit operation efficiency to SMEs in SCB, Hong Bang branch, Hai Phong city. 32 2.3.1. Credit products and services to SMEs in SCB, Hong Bang branch, Hai Phong city 32 2.3.2. The process of granting credit terms to SMEs in SCB, Hong Bang branch, Hai Phong city 32 2.3.3. Scales and the situation of credit operation efficiency to SMEs in SCB, Hong Bang branch, Hai Phong city 36 2.4. Evaluation of credit operation efficiency to SMEs in SCB, Hong Bang branch, Hai Phong city in 2012-2014 47 2.4.1. Achievements in credit operation efficiency to SMEs in SCB, Hong Bang, Hai Phong city 47 2.4.2. Limitations of credit operation efficiency in SCB, Hong Bang branch, Hai Phong city 49 2.4.3. Reasons for limitations of credit operation efficiency in SCB, Hong Bang branch, Hai Phong city 50 CHAPTER 3: SOLUTIONS TO IMPROVE THE EFFICIENCY OF CREDIT OPERATION TO SMEs IN SCB, HONG BANG BRANCH, HAI PHONG CITY 52 Pham Thi Thuy Hang CQ50/51.02 6 Graduation Thesis 3.1. Development orientation of SCB, Hong Bang branch, Hai Phong city 52 3.1.1. General orientation of SCB, Hong Bang branch, Hai Phong city 52 3.1.2. Orientation towards the improvement of credit operation efficiency to SMEs in 2015-2020 53 3.2. The experience of some countries in Asia about credit operation to SMEs and lessons learned to Viet Nam 54 3.2.1 The experience of some countries in Asia about credit operation to SMEs 54 3.2.2. Lessons learned to Viet Nam 55 3.3. Solutions to improve the efficiency of credit operation to SMEs in SCB, Hong Bang branch, Hai Phong city 55 3.3.1. Focusing on the quality of capital mobilization activity. 55 3.3.2. Building a flexible lending rate mechanism to SMEs 56 3.3.3. Improving the efficiency of appraisal to SMEs 56 3.3.4. Simplifying loan procedures, loan profile to SMEs 57 3.3.5. Regular monitoring of credit to SMEs 57 3.3.6. Completing the information system 58 3.3.7. Improving the level of credit officers 58 3.4. Recommendations to the government, State Bank of Vietnam, SMEs and SCB's headquarter 59 3.4.1. Recommendations to the Government 59 3.4.2. Recommendations to the State Bank of Viet Nam 59 3.4.3. Recommendations to SCB's headquarter 60 3.4.4. Recommendations to SMEs CONCLUSION 61 62 REFERENCE 63 Pham Thi Thuy Hang CQ50/51.02 7 Graduation Thesis LIST OF ABBREVIATIONS AOF Academy Oi Finance iBT iarnings Beiore Tax iCU igropean Cgrrency Unit iSAF inhanced Strgctgral Adjgstment Facility iU igropean GDP Gross Domestc Prodgct GSO General Statstc Office JPY Japanese Yen No Ngmber ODA Official Development Assistant SCB Sai Gon Joint Stoce Commercial Bane SISMi Science Insttgton oi Small and Medigm - sized interprise SMis Small and Medigm - sized interprises US United States VND Viet Nam Dong Pham Thi Thuy Hang CQ50/51.02 8 Graduation Thesis LIST OF FIGURES AND TABLES Figure 1: Organizational structure of SCB, Hong Bang branch, Hai Phong Table 1: Types oi loans in commercial banes 7 Table 2: Standards of SMEs in some countries 13 Table 3: Standards of SMEs in Viet Nam 14 Table 4: Total mobilized capital of SCB, Hong Bang branch, Hai Phong city from 2012 to 2014 26 Table 5: Lending situation of SCB, Hong Bang branch, Hai Phong city from 2012 to 2014 29 Table 6: Business results of SCB, Hong Bang branch, Hai Phong city from 2012 to 2014 31 Table 7: Loan sales to SMEs in SCB, Hong Bang branch, Hai Phong city from 2012 to 2014 36 Table 8: The outstanding loans to SMEs in SCB, Hong Bang branch, Hai Phong city from 2012 to 2014 38 Table 9: The outstanding loans situation to SMEs was classified by term in SCB, Hong Bang branch, Hai Phong city from 2012 to 2014 39 Table 10: The situation of outstanding loans to SMEs was classified by collateral in SCB, Hong Bang branch, Hai Phong city from 2012 to 2014 41 Table 11: The situation of the outstanding loans to SMEs was classified by economic sectors in SCB, Hong Bang branch, Hai Phong city in 2012-2014 42 Table 12: The rate of SMEs' overdue loans in SCB, Hong Bang branh, Hai Phong city from 2012 to 2014 44 Table 13: The rate of bad debts of SMEs in SCB, Hong Bang branch, Hai Phong city from 2012 to 2014 45 Table 14: Income ratio of SCB, Hong Bang branch, Hai Phong city from 2012 to 2014 46 Pham Thi Thuy Hang CQ50/51.02 9 Graduation Thesis INTRODUCTION 1, Ratioale if study Small and medigm – sized enterprises (SMis) play an important role ior Viet Nam's economy, especially in the period oi indgstrializaton, modernizaton as well as internatonal economic integraton. The iact shows that SMis have contribgted nearly 40 percent oi GDP and 50 percent oi jobs ior the society. Thereiore, this type oi enterprises receives a lot oi interest and sgpport irom the government. It is confrmed that the bane credit greatly contribgtes to the sgccess oi SMis. The reason is that commercial banes are considered as a ignding channel oi natonal and global economy. They are very important positon in fnancial intermediaton system. In commercial banes, lending actvity is one oi the most basic and practcal actvity. However, commercial banes are cagtogs when deciding to maee loans to SMis becagse this type oi enterprises has potental rises afectng the contngity oi bgsiness operaton oi the banes and leads to the loss oi banes' solvency now. As a resglt, SMis are difficglt to access to capital oi commercial banes and not many chances to innovate technology. It cagses that the credit operaton to SMis oi commercial banes is limited. Commercial banes in general and Sai Gon Joint Stoce Commercial Bane (SCB), Hong Bang branch, Hai Phong city in partcglar also maee eforts to enhance the qgality oi credit to SMis, bgt in iact, these banes only iocgs on loans to SMis in the short term with high interest rates to limit rises, give complex loan procedgres and resolgtely say no to cgstomers who do not meet the lending conditons. As a resglt, it signifcantly afects commercial banes' profts and SMis miss investment Pham Thi Thuy Hang CQ50/51.02 10 Graduation Thesis opportgnites. Clearly, improving the efficiency oi credit operaton to SMis is very important. Based on this viewpoint and cgrrent sitgaton oi credit operaton to SMis in SCB, Hong Bang branch, Hai Phong city, I chose the topic: "Situatio, silutios ti imprivee the effieofy if fredit iperatio ti SMEs io the Sai Gio Jiiot Stifk Cimmerfial Baok (SCB), Hiog Baog braofh, Hai Phiog fity" to stgdy. 2, Aims if the study The stgdy iocgsed on the efficiency oi credit operaton to SMis and solgtons to improve the efficiency oi credit operaton to SMis in SCB, Hong Bang branch, Hai Phong city. The research aimed at three main pgrposes. Firstly, the thesis gave theoretcal bacegrognd abogt credit operaton efficiency to SMis in commercial banes. Secondly, the thesis analyzed and evalgated cgrrent sitgaton oi credit operaton to SMis in SCB, Hong Bang, Hai Phong city. Finally, the thesis gave solgtons and recommendatons to improve the efficiency oi credit operaton to SMis in SCB, Hong Bang branch, Hai Phong city. 3, Sfipe if study Stgdying the issges that clearly refect the efficiency oi credit operaton to SMis inclgding the process oi grantng credit to SMis, credit prodgcts and services to SMis, the cgrrent sitgaton oi lending actvity to SMis, debt collecton to SMis, bad debts and overdge loans to SMis oi SCB, Hong Bang branch, Hai Phong city in the period oi 2012-2014. From that, giving solgtons to improve the efficiency oi credit operaton to SMis in the branch. 4, Methidiligy Pham Thi Thuy Hang CQ50/51.02 11 Graduation Thesis To achieve the pgrpose oi research, the thesis gsed some instrgments as iollow: The frst is data analysis method. Specially, the thesis analyzed the sitgaton oi credit operaton to SMis in the branch throggh comparing data in the period oi 2012-2014 to show the growth oi credit operaton to SMis. Besides, the thesis also gsed fnancial ratos to evalgate the efficiency oi credit operaton to SMis in the branch. The second is comparing method. The thesis compared standards oi SMis between some cogntries and Viet Nam, SMis sitgaton between Hai Phong and Viet Nam and the credit operaton between theory and practce in order to improve the persgasiveness oi thesis and gave reasonable solgtons. The third is statstcal and descriptve method. The pgrpose oi these methods is to measgre, describe, present data, and then give conclgsions irom the data. With these methods, cgrrent credit sitgaton to SMis in the branch clearly pointed The iogrth is synthetc method throggh analyzing ratonale oi stgdy in chapter 1 and data in chapter 2. 5, Orgaoizatio if the study Besides introdgcton and conclgsion, the thesis is divided into three main chapters as iollowing: Chapter 1: Ratonale oi credit operaton efficiency to small and medigm – sized enterprises in commercial banes. Chapter 2: Cgrrent sitgaton oi credit operaton ior small and medigm – sized enterprises in Sai Gon Joint Stoce Commercial Bane, Hong Bang branch, Hai Pham Thi Thuy Hang CQ50/51.02 12 Graduation Thesis Phong city. Chapter 3: Solgtons and recommendatons to improve credit operaton efficiency ior small and medigm – sized enterprises in Sai Gon Joint Stoce Commercial Bane, Hong Bang branch, Hai Phong city. CHAPTER 1 LITERATURE REVIEW 1.1. Cimmerfial baoks 1.1.1. Definiti Commercial banes have considered as circglaton system oi capital to the natonal and global economies. Their main actvity is to mobilize the temporarily idle ignds in the economy and provide ior the people who need money in order to ensgre contngogs bgsiness process and maee proft. Discgssing the concept oi commercial banes, each cogntry has its own defniton. For example, according to the Danish baneing law in 1930, commercial banks are essental banks including deposit operatonss trading in gold and silvers practcing commercial or real estate feldss credit facilites and the draf to transfer funds and insure . According to US's asserton, commercial banks are companies specializing in providing fnancial services and operatng in fnancial service industry. In Vietnam, according to Decree No 59/2009/ND - CP dated on Jgly 16, 2009 by Government abogt the organizaton and operaton oi commercial banes, a commercial bank is a bank performing all bank actvites and other Pham Thi Thuy Hang CQ50/51.02 13 Graduation Thesis business actvites so as to make proft under the provisions of the Credit Insttutons Law and other provisions of law. From above three defnitons, it is confrmed that all commercial banes have three main ieatgres. Firstly, commercial banes accept deposits with the responsibility to repay. Secondly, commercial banes gse deposits to maee loans, invest and discognt. Finally, these banes implement payments and provide services to their clients. 1.1.2. Basnc aciinies t ctmmercnal baiks. In consonance with Artcle 4, Secton 12 oi Credit Insttgtons Law dated on Jgne 16, 2010 by the XII Natonal Assembly, banking operaton is the business and the regular supply of one or more transactons as follow: a) Acceptance of deposits; b) Grantng credits c) Providing payment services through accounts. Nowadays, bane actvity maees signifcant progress; however, it stll contains three main actvites. According to Mr Pham Ngoc Dgng and Dinh Xgan Hang, 2011 in Finance and currency, commercial banes' actvites inclgdes: 1.1.2.1. Capital mobilizaton actvity of commercial banks It is a basic operaton and afects the qgality oi the baneing operaton. Commercial banes raise capital irom the iollowing sogrces: The frst source is bank owners. Capital consists oi agthorized capital, reserved ignds and other debt assets gnder the regglatons oi central bane. It is a decisive iactor and liie preserver ior banes' bgsiness scale, especially as banes iaced the loss oi solvency and banergptcy. The second source is economic enttes. This is the most important capital Pham Thi Thuy Hang CQ50/51.02 14 Graduation Thesis sogrce refectng the banes' natgre "borrow money to lend money". The capital was mainly iormed throggh payment deposits and enown as cgrrent accognt, termed deposits, savings deposits The third source is borrowing. Commercial banes can borrow irom the central bane or other credit insttgtons in domestc and ioreign. The last is other sources. Commercial banes can raise capital irom other sogrces sgch as sgpport capital, investment and development capital, investment trgst ignds to lend gnder the program or constrgcton project, deposits oi other banes, etc. 1.1.2.2. Asset specializaton - using funds Asset specializaton- gsing ignds involves gsing the capital raised irom debt asset specializaton. It inclgdes three main actvites. They are lending actvity, investment, joint ventgre capital contribgton and bgdgetary operaton. The frst actvity is lending. Lending operaton is the most important actvity oi commercial banes. This actvity provides variety oi loan types to cgstomers: ● Short - term loan is the type oi loan with less - than- one - year terms and high lending tgrnover. This type is necessary ior the bgsiness to ofset the shortage oi woreing capital oi bgsinesses as well as capital demand oi individgals in short term. ● Medigm - term loan is the type oi loan with one - year to fve - year terms. These loans are gseigl to investng and pgrchasing fxed assets, improving or renovatng eqgipment and expanding prodgcton ● Long - term loan is the type oi loan with a term oi more than fve years or Pham Thi Thuy Hang CQ50/51.02 15 Graduation Thesis a maximgm term oi 20-30 years, even 40 years. It is gsed to fnance capital ior constrgcton, transportaton, programs and projects oi socio-economic development with large scales. In table 1, the natgre oi each type oi loan is indicated: Pham Thi Thuy Hang CQ50/51.02 16 Graduation Thesis Table 1: Types if liaos io fimmerfial baoks Targets Term Shirt-term ≤ 1 year Medium-term 1 year < loans ≤ Liog-term ≥ 5 years 5 years Loan ofset the invest and pgrchase fnance capital ior pgrpose shortage oi fxed assets, improve, constrgcton, woreing capital renovate eqgipment transportaton, and expand programs and projects prodgcton oi socio-economic development with the large-scale Interest low high highest Liqgidity high low lowest Rise low high highest The second actvity is securites investment. Commercial banes play the role as investors and sponsors to help bgsinesses invest secgrites. Commercial banes maee profts throggh yield secgrites and stoce mareet price diferences on the mareet. The third actvity is joint venture capital contributon. Commercial banes invest an amognt oi capital to associate with other commercial banes, credit insttgtons and enterprises in the feld oi prodgcton, trade and services with determinaton to increase eqgity partcipaton and create compettve positon on the mareet. The last actvity is budgetary operaton. This actvity contains cash reserve demand so as to pay ior clients, deposits in other banes and deposits in the central bane. Althoggh it doesn't directly create proft, it plays an extremely Pham Thi Thuy Hang CQ50/51.02 17 Graduation Thesis important role in the process oi payment ior clients, liqgidity rise redgcton. 1.1.2.3. Service operaton of commercial banks Apart irom credit actvites, commercial banes also constantly improve services sgch as payment services, ggarantee, ioreign cgrrency, trgst ignd actvites, iniormaton actvites, consgltancy to earn additonal income. 1.1.3. Baik crednt 1.1.3.1. Defniton There are many defnitons oi bane credit. For example, credit is a property transacton between borrowers and lenders on the basis of borrowers' repayment promise in the future. Another defniton is that credit is a contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some date in the futures generally with interest However, we will have a igll and briei defniton in fnance and cgrrency textbooe oi AOF Press. According to Mr Pham Ngoc Dgng and Dinh Xgan Hang, 2011 in Finance and currency, credit is the credit relatonship between lenders and borrowers based on the principle of repayment. From the above defniton, bank credit defned as the credit relatonship between banks and economic enttes (businessess individualss organizatons) in the natonal economy based on the principle of repayment. 1.1.3.2. The nature of bank credit Bane credit has iogr principal characteristcs: The frst nature is that bane credit is a transacton between banes and borrowers based on eqgity and mgtgal beneft. The second nature is that the iorm oi loans is cgrrency which is temporarily Pham Thi Thuy Hang CQ50/51.02 18 Graduation Thesis transierred irom banes to borrowers. Nevertheless, banes only exchange the right to gse loans rather than ownership. The third nature is that borrowers mgst be responsible ior paying both principal and interest ior banes afer exploitng the valge oi loans at a prescribed tme. This characteristc refects the natgre oi credit movement to be distnggished irom other economic categories. The last nature is belief. Credit is beliei that is refected throggh its name. The confdence is bgilt irom both commercial banes and borrowers. 1.1.3.3. Characteristcs of bank credit Bane credit has iollowing characteristcs: Firsts capital mobilizaton actvity and lending oi commercial banes mainly condgct in the iorm oi cgrrency. Nexts commercial banes are intermediary credit insttgtons. When borrowing irom the pgblic, commercial banes implement diferent methods. Afer that, demands ior capital oi borrowers are satsfed by means oi grantng credit with loan accognt or combinaton oi accognts ior loans and deposits, etc. Besidess the process oi movement and development oi bane credit is in relatve independence with the process oi social reprodgcton movement and development. Finallys bane credit accelerates the process oi concentraton and harmonizaton oi capital among enttes in the economy becagse commercial banes can solve sgpply and demand relatons in term oi loan volgme as well as loan credit term. 1.1.3.4. Functons of bank credit Pham Thi Thuy Hang CQ50/51.02 19 Graduation Thesis Bane credit contains two eey ignctons: Firstlys bane credit iocgses and redistribgtes capital basing on repayment principle. Bane credit operaton is essental. Bane credit helps regglate the amognt oi capital irom the sgrplgs place to the defcit place and satsfes both the lenders and the borrowers. Secondlys bane credit controls economic actvity in cash. Commercial banes mgst ensgre loans paid on tme. Controlling oi economic actvity is meaningigl to enhance solvency, tmely recover capital and raise awareness in gsing oi capital oi borrowing gnits. 1.1.3.5. Roles of bank credit In the frst places bane credit boosts the prodgcton and circglaton oi commodites. All the bgsiness cycle starts with cash and ends with a larger volgme oi cgrrency. In this cycle, bgsinesses and hogseholds have to concentrate on increasing the capital rotaton. As a resglt, enttes are able to re-expand prodgcton, improve and innovate technology eqgipment. Moreovers bane credit is the economic lever pgshing the circglaton oi natonal commodites. To develop both the width and depth oi an economy, a cogntry needs to expand economic relatons with other cogntries. Many developing cogntries liee Viet Nam have chances to access high-tech mangiactgring while the more developed cogntries have spent hgndreds oi years to establish. The iorm oi gnit investment trgst, ggaranteeing import and export oi goods, ODA and iSAF credit sgpport, etc are typical demonstraton. Furthermores bane credit encograges the process oi cash fow, regglate the money in the circglaton and cgrb infaton. Commercial banes give interest Pham Thi Thuy Hang CQ50/51.02 20 Graduation Thesis rate and credit limit to balance the amognt oi money in the circglaton. It is vital ior price and cgrrency stability. Finallys bane credit redgces the cost oi prodgcton and circglaton. In general, capital rotaton is iast throggh credit operaton. For this reason, money in the circglaton declines and capital tmely provided ior sgbjects. Pham Thi Thuy Hang CQ50/51.02