Luận văn khoa tiếng anh thương mại Đại học ngoại thương

INTRODUCTION

1. Rationale:

In the context of economic crisis recently, the Government has implemented monetary policy and fiscal policy to encourage domestic demands. Experience from the economic development of Vietnam and of other countries around the world has shown that stable economic growth should be based on the increase in domestic demand rather than the increase in trade, especially import

Policy stimulating domestic demand, especially consumption demand, is considered key economic development policy which helps reduce dependence on imports. Therefore, the banking system - which provides channels to meet the needs of the economy’s capital - will play an important role in providing credit for consumer activities.

Also, under the situation of harsh competition in the context of international integration, Vietnamese commercial banks must diversify forms of credit in order to spread, limit, and control risks at the lowest level.

Although in recent years, the State Bank of Vietnam has paid considerable attention to the field of consumer credit, this form of credit is still underdeveloped, accounting for a modest proportion of total outstanding loans. Therefore, to expand and enhance consumer credit growth, there is a need to promote this type of credit.

After consulting my academic supervisor and taking everything into consideration, I decided to title this thesis “Solutions to improve effectiveness of consumer credit in Vietnam”.

Contents

ACKNOWLEDGEMENT

LIST OF ABBREVIATIONS

LIST OF FIGURES AND TABLES

INTRODUCTION 1

CHAPTER 1: THE FUNDAMENTALS OF CONSUMER CREDIT. 2

1.1. General principles of consumer credit 3

1.1.1. Definition of consumer credit 3

1.1.2. Characteristics of consumer credit 4

1.2. Benefits of consumer credit 5

1.3. Types of consumer credit 6

1.3.1. Based on the purposes of a loan. 7

1.3.2. Based on methods of payment 7

1.3.3. Based on the origin of the loan. 8

1.4. Consumer lending process. 9

1.4.1. Steps in lending process. 9

1.4.2. Credit analysis. 10

1.5. Consumer credit performance. 13

1.5.1. Qualitative indicators measuring credit performance. 13

1.5.2. Quantitative indicators measuring credit performance. 14

1.6. Necessary and sufficient conditions for better consumer credit performance. 16

1.6.1. Necessary conditions. 16

1.6.2. Sufficient conditions. 18

1.7. Consumer credit in Europe and lessons applying for Vietnam 18

1.7.1. Overview on consumer credit in Europe. 18

1.7.2. Lessons applying for Vietnam 21

CHAPTER 2: CONSUMER CREDIT ACTIVITIES IN

VIETNAM’S COMMERCIAL BANK SYSTEM . 24

2.1. Overview of Vietnamese economic outlook. 24

2.2. Credit performance in Vietnam’s commercial banking system 26

2.3. Consumer credit activities in Vietnam 28

2.3.1. Types of consumer credit product applied in Vietnam 28

2.3.2. Rules and regulations on consumer credit activity in Vietnam 29

2.3.3. Performance evaluation of consumer credit in Vietnam 35

2.4. SWOT analysis on the situation. 49

2.4.1. Strengths and opportunities. 49

2.4.2. Weaknesses and threats. 49

CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS TO IMPROVE EFFECTIVENESS OF CONSUMER CREDIT IN VIETNAM . 52

3.1. Banking development strategy by The SBV concerning consumer credit 52

3.2. Solutions and recommendations to improve consumer credit performance in Vietnam 53

3.2.1. As for The State Bank of Vietnam 53

3.2.2. As for Vietnamese commercial banks. 57

3.2.3. As for the Government 60

3.2.4. As for other related Ministries and People’s Committees at all levels. 61

3.2.5. As for the borrower 62

CONCLUSION 62

APPENDICES. 64

BIBLIOGRAPHY 6