NATIONAL ECONOMICS UNIVERSITY BANKING – FINANCE DEPARTMENT BACHELOR THESIS TOPIC: IMPROVING THE CONSUMER LENDING ACTIVITIES AT SAI GON JOINT STOCK COMMERCIAL BANK - DONG DA BRANCH Student Name: Mai Trong Hieu Student ID: 11191946 Class: Bachelor of Financial Investment 61 Intrsucter: Mas Pham Thi Thuy Dung HANOI, 2023 TABLE OF CONTENTS PREFACE CHAPTER 1: THEORETICAL FRAMEWORK ON CONSUMER LENDING ACTIVITIES IN COMMERCIAL BANKS 1.1.1 Definitions of bank credit activities 1.1.2 Categories of bank credit activities 1.1.3 Roles of bank credit activities 1.2 Consumer lending activities in commercial banks 1.2.1 Definitions of consumer lending activities 1.2.2 Categories of consumer lending activities 1.2.3 Characteristics of consumer lending activities 1.2.4 Roles of consumer lending activities 1.3 Improving consumer lending activities 1.3.1 Overview about improving consumer lending activities 10 12 12 1.3.2 The criteria to evaluate the consumer lending activities in commercial banks 13 1.3.2.1 Loan sales 13 1.3.2.2 Outstanding loans 13 1.3.2.3 Number of customers 14 1.3.2.4 Bad debt to outstanding loan ratio 14 1.3.3 Factors affecting the consumer lending activities in commercial banks 15 1.3.3.1 External factors 15 1.3.3.2 Internal factors 17 CHAPTER 2: ANALYZING THE SITUATION OF CONSUMER LENDING ACTIVITIES IN SAI GON JOINT STOCK COMMERCIAL BANK - DONG DA BRANCH 19 2.1 Overview about Saigon Joint Stock Commercial Bank – Dong Da branch 19 2.1.1 General information 19 2.1.2 Organizational structure 20 2.1.3 Business performance in the period 2020-2022 23 2.1.3.1 Results on deposit banking activities 23 2.2 The situation of consumer lending activities in Saigon Joint Stock Commercial Bank – Dong Da branch 29 2.2.1 Overview about the consumer lending activities in the branch 29 2.2.2 Analyzing the categories of consumer lending activities in the branch 30 2.2.2.1 Consumer loans for home repair and buying cars 30 2.2.2.2 Consumer loans for other demands 34 2.2.3 Assessing the criteria of improving consumer lending activities in the branch36 2.2.3.3 Number of customers 39 2.3 Evaluation on the consumer lending activities in Saigon Joint Stock Commercial Bank – Dong Da branch 41 2.3.1 Achievements 41 2.3.2 Limitations 42 2.3.3 Reasons 43 CHAPTER 3: SOLUTIONS TO IMPROVE CONSUMER LENDING ACTIVITIES IN SAI GON JOINT STOCK COMMERCIAL BANK - DONG DA BRANCH 45 3.1 The development goals and orientations of Saigon Joint Stock Commercial Bank – Dong Da branch in the next years 45 3.1.1 Goals and orientations of the branch 45 3.1.2 Goals and orientations of consumer lending activities 46 3.2 Solutions to improve consumer lending activities in Sai Gon Joint Stock Commercial Bank – Dong Da branch 47 3.2.1 Improving marketing activities in the branch 47 3.2.2 Strengthening risk management and recovery of overdue debts and bad debts 49 3.2.3 Improving the quality of human resources 3.3 Recommendations 51 52 3.3.1 Recommendations for SCB 52 3.3.2 Recommendations for State Bank of Vietnam 54 CONCLUSION 55 REFERENCES 56 LIST OF ABBREVIATIONS Abbreviations Full meaning CIC Credit Information Center KPIs Key Performance Indicators SCB Sai Gon Joint Stock Commercial Bank - Dong Da branch VND Vietnam Dong LIST OF TABLES Table 2.1 The deposit banking activities of SCB Dong Da branch in 2020-2022 23 Table 2.2 The lending amount of SCB Dong Da branch in 2020-2022 .25 Table 2.3 Consumer loan for home repair and buying cars at SCB Dong Da Branch 31 Table 2.4 Consumer loans for other demands at SCB Dong Da Branch 35 Table 2.5 Loan sales of consumer lending activities at SCB Dong Da branch 37 Table 2.6 The outstanding loans of consumer lending activities in SCB Dong Da branch 38 Table 2.7 The outstanding loans of consumer lending activities in SCB Dong Da branch 40 Table 2.8 Debt classification of SCB Dong Da branch 40 LIST OF FIGURES Figure 2.1 Process of indirect consumer lending Figure 2.2 Process of direct consumer lending Figure 2.1 Organizational structure of SCB Dong Da branch .20 Figure 2.2 The scale of deposit banking activities in SCB Dong Da branch (Unit: billion VND) .24 Figure 2.3 The structure of deposit banking activities in SCB Dong Da branch (Unit: million VND) 25 Figure 2.4 The scale of lending activities in SCB Dong Da branch (Unit: Billion VND) 26 Figure 2.5 The structure of lending activities in SCB Dong Da branch (Unit: billion VND) .27 Figure 2.6 Results on financial performance of SCB Dong Da branch in 20202022 (Unit: billion VND) 28 Figure 2.7 Consumer loans for home repair in the period 2020-2022 32 Figure 2.8 Consumer loans for buying cars in the period 2020-2022 33 Figure 2.9 The market share of outstanding loans (Unit: %) .39 Figure 3.1 The recommended risk management process for SCB Dong Da branch 49 Document continues below Discover more from: Fixed Income CCPS221_BFI61 51 documents Go to course Measurement, Valuation, and Disclosure Liabilities 18 Fixed Income 100% (1) Khuất Thị Kim Chi Team - noèaffrgrgeafregrg Fixed Income None Characteristics of EM bonds Fixed Income None EBM Report - Academic 20 Fixed Income None Tong quan ve cac linh vục phat trien CNTT 90 Fixed Income None FIN 485 Fixed Income Syllabus - 2022 Session 12 Fixed Income None PREFACE Rationale to the research In Vietnam, consumer lending has a lot of potential due to its good economic growth and young population Consumer lending provides financing for personal, family, or household purposes The banking system is increasingly developing and diversifying its operations towards modernity in line with international practices Accordingly, consumer lending becomes a fundamental and vital activity to meet people’s needs and contribute to the development of the country Currently, the structure of consumer lending products in Vietnam is quite diverse Many types of consumer lending products have appeared and are deployed with both groups of providers, namely commercial banks and consumer finance companies In this context, Sai Gon Joint Stock Commercial Bank - Dong Da branch with the advantage of large capital, extensive transaction system and longstanding experience, the bank’s promotion of consumer lending activities with customers will bring many benefits to the bank However, there are still some shortcomings and limitations which facilitate the need to further improve the process, regulations and policies to ensure the safety of credit while promoting more forms of consumer lending In order to have a basis for improving consumer lending activities at SCB Dong Da branch to achieve the organizational goals, it is necessary to conduct an on the consumer lending activities of the branch Stemming from the importance of consumer lending in the commercial banks and the practical situation of SCB Dong Da branch, I have chosen the topic: “Improving the consumer lending activities at Sai Gon Joint Stock Commercial Bank - Dong Da branch” for my graduation paper Research objectives The study is conducted to fulfill the following objectives: ● Provide an overview of business activities of SCB and SCB Dong Da branch ● Investigate the current situation of consumer lending activities in SCB Dong Da branch in the period 2020-2022 ● Propose and suggest the solutions and recommendations to improve the consumer lending activities of SCB Dong Da branch in 2020-2022 Research subject and scope Due to the limitation in data collection, the research will focus on consumer lending activities for Hanoi customers of Sai Gon Joint Stock Commercial Bank - Dong Da branch from 2020 to 2022 Research methodology In this study, the qualitative method will be applied to collect and analyze data The method is used to study the current situation of consumer lending activities in SCB Dong Da branch in the period 2020-2022 including the techniques: Collecting data on consumer lending reports over the years; Processing data by statistics, description and synthesis methods; Analyzing and evaluating the data Research structure The research structure can be divided into three chapters as follows: Chapter 1: Theoretical framework on consumer lending activities in commercial banks Chapter 2: Analyzing the situation of consumer lending activities in Sai Gon Joint Stock Commercial Bank - Dong Da branch Chapter 3: Solutions to improve consumer lending activities in Sai Gon Joint Stock Commercial Bank - Dong Da branch CHAPTER 1: THEORETICAL FRAMEWORK ON CONSUMER LENDING ACTIVITIES IN COMMERCIAL BANKS 1.1 Overview about credit activities in commercial banks 1.1.1 Definitions of bank credit activities Credit is the most important activity of financial institutions as well as banks, accounting for the highest proportion of total assets, generating the largest income from interest and also the activity bringing the highest risk (Pham Thi Thu Ha, Commercial Bank, The National Economic University of Publisher in 2007) According to Peter (2004), credit is generally considered to refer to a bank’s funding of customer-related activities (sometimes referred to as bank credit), which primarily influences the existence and growth of the banks However, because diverse research views also result in differing understandings, it is challenging to define credit precisely In general, bank credit is described as a method of transferring money (capital) from lenders to borrowers, or from the subject of a surplus of savings to the subject of a deficit of saving (Pham Thi Thu Ha, Commercial Bank, The National Economic University of Publisher in 2007) As stated by Trinh Thi Mai Hoa, textbook of Banking and Finance, The National University of Publisher, a bank credit transaction is an exchange of assets between two parties with the expectation of repayment The most typical is a loan transaction between banks and other financial organizations, between companies and individuals, where banks lend to the borrowers, and they then have a certain amount of time to pay back the principal and interest Bank credit is another term for the sum of money that financial institutions lend to their clients Thus, bank credit is defined as a transaction involving the transfer of assets (such as money or products) from a lender (such as banks and financial organizations) to a borrower for use over a certain period of time When the payment is due, the borrower must pay both the principal and interest to the lender (Ho Dieu, Textbook of Bank Credit, The Statistic Publisher in 2000) and cause the losses for SCB Dong Da branch In addition, the provisions for credit losses have not been considered and paid attention by the Branch And third, the scalee of consumer lending activities is still limited, which is not commensurate with the financial capability of SCB Dong Da branch Furthermore, the Branch have not focused on the expansion of different consumer loans to meet the changing needs of customers Fourth, the marketing activities for consumer lending of SCB Dong Da branch is not effective In comparison with other competitors such as VPBank, Shinhan Bank, etc., the marketing mix strategies of SCB Dong Da branch are still limited, especially the price and promotion strategies Hence, it is difficult for the Branch to attract and reach the potential customers who have actual consumer loan demands And fifth, the market share of consumer lending activities in SCB Dong Da branch is also limited in compared with other commercial banks in Dong Da such as VIB Dong Da branch, Techcombank Dong Da branch, etc Last but not least, the efficiency of using consumer loans is not high Besides, SCB Dong Da branch also has limitations in its human resources Human resource training has not been prepared in a timely manner, and staff qualifications are not high to carry out the services for consumers quickly and accurately 2.3.3 Reasons The limitations in consumer lending activities of SCB Dong Da branch is due to the following reasons: The first reason is the limited number of credit officers who are in charge of providing consumer lending services to the customers in SCB Dong Da branch Currently, there are only credit officers directly participating the process of consumer lending, whereas the number of customers’ loan application forms has increased rapidly This has caused a lot of working pressure for the credit officers, leading to the low work performance Another reason is that the risk management process is not strictly implemented by SCB Dong Da branch A risk management process should consist of five steps including: Risk identification, Risk assessment, Risk mitigation, Risk monitoring and Risk reporting However, SCB Dong Da branch 47 has not established an effective risk management process As a consequence, the Branch has still faced with the risks of bad debts and losses Third, the competitive pressures from other branches of SCB and different commercial banks which have strengths in consumer lending activities like VPBank, Techcombank, etc are also one of the main reasons for the difficulties of SCB Dong Da branch in attracting the customers And fourth, the reasons from economic factors: Due to the influences of the Covid-19 pandemic on the economy, the prices of essential commodities have increased continuously such as gasoline, electricity, water, food prices, etc The social distancing measures for prevention of Covid-19 has also caused a significant decline in the income of customers, and also affect the customer’s ability to pay debts The currency market fluctuates greatly, interest rate changes, and high inflation had negative impacts on the bank’s consumer lending activities Last but not least, the political – legal factors: The Government’s legal framework on consumer lending activities have not been completed The legal regulations in consumer lending activities are still general, and the loan application documents still have many unnecessary procedures Currently, banks only rely on the laws and decisions to provide general guidance on lending and assurance when providing credit to customers issued by the State Bank 48 CHAPTER 3: SOLUTIONS TO IMPROVE CONSUMER LENDING ACTIVITIES IN SAI GON JOINT STOCK COMMERCIAL BANK - DONG DA BRANCH 3.1 The development goals and orientations of Saigon Joint Stock Commercial Bank – Dong Da branch in the next years 3.1.1 Goals and orientations of the branch The SCB Dong Da branch needs to concentrate on safe and effective credit growth in the near future, prioritizing the promotion of retail credit and SME clients; carefully controlling preferential loans; evaluating efficiency; and balancing customer advantages Additionally, they must tightly regulate credit quality, which will greatly enhance debt management and collection Focusing on key industries and large, worthwhile initiatives that can grow quickly in scale and efficiency while laying the groundwork for long-term success is another issue In order to continue to restructure its customer base and boost operational effectiveness, the bank should give good customers priority for short-term credit (VND); broaden its clientele by luring good clients from the neighborhood; concentrate on handling bad debts; tighten up credit quality control; and ensure branch safety, specifically: - Handling customer debts severely; enhancing credit quality control; maintaining the branch’s bad debt ratio of 1% and group debt ratio of 1% in 2023 - Handling collateral severely in line with the law to collect debts, reduce bad debts, and manage future bad debts while doing so; drafting litigation against clients with bad debts, as well as debts sold to VAMC from clients unwilling to settle their debts - Preserving and expanding market share - Extending the credit market to all areas and economic sectors; Using relationships to approach and convince small and medium-sized businesses to borrow money from the branch while continuing to provide excellent service and uphold positive relationships with traditional clients 49 - Ensuring growth in both size and credit quality; bolstering strategies for credit quality improvement; applying Decree 55/2015/ND-CP of the government, dated 9/6/2015, more deeply in lending activities; expanding consumer loans and overdraft loans to grow outstanding loan balance; and fully utilizing various bank guarantees - Diversifying capital-raising methods to guarantee the stability of lending capital - To adapt to the demands of the consumer, diversify credit kinds and credit products - Contributing to the co-financing of significant projects by offering syndicated loans - Completing legal and policy frameworks to control lending activities in accordance with SCB's guiding principles and best practices around the world, with a particular emphasis on risk management - Concentrating on improving the amount and quality of the bank workforce 3.1.2 Goals and orientations of consumer lending activities The Bank has established numerous guidelines for credit activities as follows in an effort to expand and improve consumer lending activities in accordance with the plans: - Actively looking for and contacting clients with sound financial standing; choosing investment ideas, workable company strategies, highly effective payback sources for loans, to guarantee growth with quality, safety, and efficiency On the other hand, the bank should scale back and eventually stop extending loans to clients that have a history of losing money, having bad financial standing, and operating inefficiently They must increase the amount of loans outstanding to individuals with stable incomes, adequate financial means, and successful businesses; they must also improve credit quality and diversify their client base to spread risk - Being proactive in working with customers to complete loan security documentation and processes to strengthen the borrower's obligations; developing a financial and legal foundation for debt recovery; and restricting lending without collateral 50 - Strictly and aggressively promoting debt collection following risk management; analyzing each debt already handled; assigning bad debt collection KPI to every department and credit officer; and requiring monthly outcomes reports In order to get the greatest results, the bank should also support a motivating mechanism like awards The bank will halt all credit relationships with clients and take appropriate steps to enforce debt collection - Monitoring each customer’s outstanding principal and interest to ensure prompt collection and prevent past-due debts Both credit officers and connected individuals will be liable to the appropriate punishment for officers who permit bad debts and debts that must go through risk processes owing to subjective reasons - Organizing the inspection, capitalizing all loans, carefully enforcing the policy of supporting lending interest rates, and dealing with violators harshly; giving credit in accordance with the SCB Vietnam announcement about balancing additional capital sources Lending terms cannot be loosened under any circumstances - Continually raising professional credentials, risk management capability, and market analysis capability in accordance with set requirements for credit officers and operational support departments To effectively perform the role of evaluating and authorizing the loans, credit officers must have good professional ethics, be trustworthy, accountable, and committed to their work They must completely adhere to the loan use procedures, strongly collect principal and interest for each period as specified in the credit agreements and make every effort to prevent accruing more past-due debts - Firmly evaluating, creating a plan for handling bad debts, and trying to collect bad debts after processing Strictly scoring, classifying clients and debts Provisioning and managing credit risks in compliance with legislation 3.2 Solutions to improve consumer lending activities in Sai Gon Joint Stock Commercial Bank – Dong Da branch 3.2.1 Improving marketing activities in the branch - With product policy In order for the product to meet the needs of consumers, the Bank needs to survey, study, and study models of consumer lending products from abroad, and improve and develop product strategies to suit the needs of consumers demand 51 of the Vietnamese market and the needs of customers Because in terms of shortterm benefits, the Bank sells its own benefits in the short term, but the Bank that cares about customer needs will have a long-term advantage And SCB Dong Da branch needs to pay attention to the following issues: Firstly, expand existing consumer loan products such as home loans, car loans, study abroad loans, etc with more flexible terms, especially loans for employees is a type of loan with a low rate of overdue debt because customers are usually government employees or civil servants Banks need to promote, expand, and find customers from joint ventures and associates although the value is small, this is a relatively safe loan product Secondly, with the type of joint venture and association lending, the bank is not without risks So, in order to limit risks, the bank re-evaluates the customers that companies and agents introduce In order to limit damage to banks, it is necessary to choose reputable companies and agents to provide indirect credit, and still have to regularly monitor these debts - With price policy Although the bank has come up with pricing strategies, it is still not really reasonable Interest rates on consumer loans are quite high Therefore, banks must have more flexible prices for all customers, meeting all customers' needs - With distribution channel For consumer loans, the best distribution channel policy is the traditional distribution system, with the expansion of transaction offices, branches and combination with other modern distribution channels - With promotion strategies At present, the economy is quite stable, people have stable incomes and consumer demand will increase, the number of customers will also increase The bank also needs to take measures to meet the needs of customers in the coming time: Firstly, build a specialized marketing department to introduce the image and reputation of SCB - Dong Da branch professionally to attract customers in general and individual customers in particular Secondly, regularly update information on SCB’s website, publish specific information about consumer loan products on the website, and build advertising 52 strategies in newspapers and television when providing a new consumer loan product Third, regularly poll customers to find feedback from customers, find out customer's evaluations of the bank about its products to improve products, and satisfy customer needs 3.2.2 Strengthening risk management and recovery of overdue debts and bad debts Risk management is very important for banks, especially credit risk, because risks are created by many factors, especially the human factor inside the bank and customers applying for it get a loan Therefore, one measure that can be taken to reduce the risk stemming from the human factor is to use face-to-face interviews The bank establishes a loan application appraisal council, the credit officer directly accepts the application, and the customer must defend his/her loan repayment plan before the appraisal council The bank only decides to lend when there is an approval result from the Appraisal Council It is also for the Branch to strengthen internal control In the past, SCB Dong Da branch has effectively overcome the cases of loan irregularities, minimized risks and losses, and ensure safe operation, including a significant contribution of the internal inspection and control department During the inspection, it was timely to detect shortcomings, drawbacks and unreasonableness in the operating mechanism, and at the same time check the debt classification of the customer’s department to calculate the provision for risks Risk identification Risk reporting Risk assessment Risk monitoring Risk mitigation 53 Figure 3.12 The recommended risk management process for SCB Dong Da branch To better the risk control and management, SCB Dong Da branch should establish an effective risk management process with five steps including: Risk identification, Risk assessment, Risk mitigation, Risk monitoring and Risk reporting The diagram is shown in Figure 3.1 In specific, the stages in the recommended risk management process for Dong Da branch can be presented as follows: Risk identification: Finding the risks to which the Bank is exposed in its operating environment is the first step in the risk management process There are many different kinds of hazards, including: Regulatory risks, market risks, environmental risks, and legal risks The majority of these risk variables should be found, if at all possible In a manual setting, these risks are manually recorded All of this information is entered immediately into the system if the firm is using a risk management solution The benefit of this strategy is that any organization stakeholders who have access to the system can now see these risks Risk reporting: A risk must be examined after being detected Determine the risk's extent first Understanding the relationship between risk and various organizational characteristics is also crucial It is necessary to look at how many banking operations the risk affects in order to gauge the risk’s degree and severity While some risks will just result in minor annoyances in the analysis, others have the potential to bring the Bank to a complete halt if they come to pass Risk assessment: It is necessary to rank and prioritize risks Depending on the risk’s intensity, the majority of risk management solutions have multiple types of risks Risks that could result in little discomfort are ranked lower than risks that could cause significant loss, which are rated highest Ranking risks is crucial because it gives the business a comprehensive understanding of its overall exposure to risk Risk mitigation: It is essential to minimize or completely eliminate any risks Connecting with subject matter experts in the area where the risk is present enables this In a manual setup, this requires getting in touch with each and every stakeholder before scheduling meetings where everyone may express their concerns 54 Risk monitoring: Not all risks can be eliminated – some risks are always present Market risks and environmental risks are just two examples of risks that always need to be monitored Under manual systems monitoring happens through diligent employees These professionals must make sure that they keep a close watch on all risk factors Under a digital environment, the risk management system monitors the entire risk framework of the organization (Langohr & Langohr, 2009) 3.2.3 Improving the quality of human resources The economy of Vietnam is deeply integrating into the global economy Therefore, one of the key variables affecting the survival of businesses generally and the banking sector in particular is the creation of high-quality human resources However, the banking sector has not paid enough attention to its highquality human resources, which are still underdeveloped and insufficient The fact also demonstrates that SCB Dong Da’s existing human resource quality still has a lot of issues It is vital to take the following actions in order to raise the caliber of SCB’s human resources in general and SCB Dong Da Branch in particular: - Training and retraining bank employees: Employees must be regularly trained and retrained in a variety of skills, including law, sales, management, and communication, in addition to the fundamental knowledge of specialized fields, professional procedures, directive documents for the banking industry, and the BIDV system They should focus more on employee foreign language training at the same time - Creating an innovative emulation and reward mechanism that is based on the productivity, quality, and efficiency of the assigned job in order to construct and assess the work completion level On this premise, provide a suitable system for allocating salaries to employees in order to reward those who work productively and well while also making significant contributions to the bank Additionally, there is a system in place for disciplining workers who violate company policies or whose morale or way of life harm the Bank’s reputation with penalties or even termination - Setting up a dedicated organization to forecast human resources in order to prevent an overabundance or shortage of human resources in general and highquality human resources in particular 55 - The bank should collaborate with academic institutions and research organizations to actively participate in human resource training In addition to offering scholarships to students with strong academic records and hiring competent candidates immediately after graduation, they can send banking specialists to teach a variety of topics - Recruitment of human resources: The bank should establish a scientific recruitment plan to draw in truly excellent human resources based on the system’s overall human resource development strategy and recruitment requirements When hiring, it is important to consider the people capacity for each position, identify each candidate’s talents, and place them in the right role so they can develop to their maximum potential To hire truly qualified human resources to work in the financial system, recruitment must be done in an open, transparent, democratic, objective, and fair manner 3.3 Recommendations 3.3.1 Recommendations for SCB It is necessary for SCB to enhance the consumer lending policies The Bank must create a proper customer policy that applies to both current and potential customers going forward, not only those who have credit arrangements with the Bank now Paying attention to the classification and assessment of the customer Following the evaluation, categorization, and ranking of clients, particularly corporate customers, who have credit ties with SCB, the branch will have the following policies in place: - For commercial firms with effective production, strong development potential, and strong credit relationships with the SCB Dong Da branch, the branch may think about increasing the credit limit appropriate for their output and capital needs They could also advertise consumer loans for the officers and staff of these businesses - For consumers who successfully operate their businesses and have credit relationships with other banks, it is important to regularly monitor changes to these relationships (via financial statements, reports on loan balances, through CIC, etc.) To ensure the capacity to draw and build credit connections and other customer demand for using banking services, it is also required to analyze and implement customer policies and appropriate interest rate policies 56 - For customers who are temporarily having financial difficulties, it is important to follow their operation situation on a regular basis (through financial statements, sales reports, direct conversations with business owners, etc.) and offer advice on financial matters, the market, and credit scale in order to help customers maintain stability and look for ways to expand their operations These customers require rigorous credit limit review, flexible credit policy application, and loan terms that can be adjusted by the bank to maintain regular business operations Maintaining loyal customers, especially those with strong financial standings, reputable business practices, current relationships with the bank, properly implementing preferential policies for customers in each type of service they are using, concentrating on utilizing the current customer base, and increasing the number of products used per customer are some of the goals the bank should keep in mind when developing customer policies - Actively seeking out more deserving clients rather than waiting for them to approach, particularly those that are running successful businesses and have a need for secured loans According to the concepts of adequate and efficient capital, the bank should assign KPI to credit officers, specifically choosing clients who are compatible with the Bank's circumstances and capacities - For current customers whose operations are ineffective, the Bank should take action to address any short-term issues and keep up with them If they are still unable to get beyond the obstacles, skillfully lower the current balance that is due and look for ways to boost collateral to lessen the risk of capital loss Developing and effectively implementing customer policies will strengthen the bond between the bank and its clients, enable it to better understand their needs in order to take prompt action, identify any challenges borrowers may face when utilizing loans and identify solutions to assist and support clients as well as reduce unforeseen risks Besides, some other recommendations are also proposed for SCB as follows: - Improve and innovate the credit process in the direction of ensuring safety in credit activities while reducing the time and approval procedures - Continue to complete the scoring and credit rating system for individual and enterprise customers on the basis of research results achieved 57 - It is necessary to study and build a specific risk quantification model of the enterprises; build a risk assessment and early warning model to apply to the whole system - Enhance the role of SCB’s credit information department - SCB needs to regularly organize training courses on specialized fields to provide a comprehensive knowledge for credit officers in the whole system - Modernize banking technology 3.3.2 Recommendations for State Bank of Vietnam - It is necessary to quickly apply the Basel II model - Credit Information Center (CIC) should build a system to support banks in credit rating - Reform system of legal documents in credit activities - Strengthen the inspection and supervision of commercial banks - Assign autonomy to commercial banks in formulating regulations on secured lending - It is necessary to conduct research, consider adjusting the debt classification based on the aggregate of customer criteria, the provisioning rate may be more flexible 58 CONCLUSION For Vietnamese banks, credit is always the most important activity, profits from credit activities always account for the highest proportion of total annual profits of banks Although in line with the development of the economy, many new types of banking services were born, but credit has always been the basis and foundation of every bank Credit not only has great significance for banks but also plays an important role for economic entities that need capital Consumer lending activities in recent years have contributed greatly to diversifying credit products of Vietnamese banks, promising to be a new direction for banks, and a growing market potential school The study of consumer lending solutions is very necessary and meaningful not only for Sai Gon Joint Stock Commercial Bank - Dong Da branch but also to help implement the Government's consumer demand stimulus policies, helping giving individuals and households the opportunity to access banking products and services to improve and enhance their quality of life The topic “Improving the consumer lending activities at Sai Gon Joint Stock Commercial Bank - Dong Da branch” has shown a comprehensive picture of consumer credit activities and its role as well as the Bank's overall credit activities in the banking sector in the period 2020 - 2022 Although this is an unfavorable period for banks and economic entities, SCB Dong Da Branch has achieved commendable successes The analysis has shown the advantages and disadvantages of consumer credit at SCB Dong Da branch in the three years of 2020-2022, found the causes of the limitations, thereby proposing some solutions to help consumer lending activities of the branch better 59 REFERENCES VIETNAMESE Ho Dieu (2000), Textbook of Bank Credit, The Statistic Publisher, Hanoi Pham Thi Thu Ha (2007), Commercial Bank, The National Economic University of Publisher, Hanoi Trinh Thi Mai Hoa (2009), Textbook of Banking and Finance, The National University of Publisher, Hanoi The State Bank of Vietnam (2007), The Decision No 493/2005/QD-NHNN dated on 25 April 2017 about classification of debts and risk provisions SCB Dong Da (2022), Annual Reports 2020 - 2022 SCB Dong Da (2022), Financial statements (from 2020 to 2022) To Kim Ngoc (2004), Textbook of Banking and Monetary Theories, The Statistic Publisher, Hanoi ENGLISH: Peter, S R (2004), Management of Commercial Banks, 4th edition, The Pearson Publisher Langohr, H & Langohr, P (2009), The Rating Agencies and Their Credit Ratings: What They Are, How They Work, And Why They are Relevant, The Wiley Michael, K O (2002), Credit Ratings: Methodologies, Rationale and Default Risk, The Pearson Publisher 10 Clifford B Hawley and Edwin T Fujii (1991), Discrimination in Consumer Credit Markets, Eastern Economic Journal 17(1), 23-27 11 Kim, H., & DeVaney, S A., 2001 The determinants of outstanding balances among credit card revolvers Financial Counseling and Planning, 12(1), 76 – 80 12 Paul F Smith (2014), Consumer Credit Costs, 1949 – 59 Princeton University Press WEBSITE: 10 https://www.scb.com.vn 60 11 Commercial Bank (2021), Accessed March 11, 2023, at: https://www.investopedia.com/terms/c/commercialbank.asp 61