Farmers behavioral intention to use formal credit a study in cantho city, vietnam

Recommendationforfurtherstudies...42 REFERENCE...44 APPENDICES...55 AppendixA:Listofin-depthinterviewparticipants...1 AppendixB:In-depthinterview‟srefinementmeasurementscale...2 Appendix

HoChiMinhCity–2016

a l t h a n k s t o a l l o f mydearf r i e n d s i n M b u s 4 c l a s s w h o g a v e meu s efu l materials,responsesandexperiencestoconductthisstudy.

Iwouldalsoliketoexpressmygratefulthankstomyassociates,myfriends,andmyc o l

l e a g u e s whoparticipatedinfillingthequestionnairesand/

orhelpedsendthequestionnairestothefamers,andprovidedvaluableinformationandcommentsforthisstudy

Personally,Iwishtoexpressmydeepgratitudetomycolleaguesandfriendsworkinga t S t

a t e B a n k o f V i e t n a m , C a n t h o City;MBBank

Cantho;VietcombankCantho;SacombankCantho;EximbankCantho;BIDVCantho;AgribankCantho

HoChiMinhCity,Vietnam

t ” Thefindingssuggestseveralimplicationsf o r leadershipo f commercialbanksandbankingauthorities.

Keywords:Formalcredit,TheoryofReasoned

Action(TRA),perceivedservicequality,perceivedvalue,behavioralintention

TABLEOFCONTENTS

ACKNOWLEDGMETS i

ABSTRACT ii

TABLE OFCONTENT iii

LISTOFFIGURES v

LISTOFTABLES vi

LISTOFABBREVIATIONS vii

CHAPTER1:INTRODUCTION 1

1.1 Researchbackground 1

1.2 Researchproblem 3

1.3 Researchobjectives 5

1.4 Researchscope 6

1.5 Researchcontribution 6

1.6 Researchstructure 7

CHAPTER2:LITERATUREREVIEW 8

2.1 Foundationaltheory 8

2.2 ReviewonBehavioralintention 10

2.3 HypothesesDevelopment 12

2.3.1 Attitude 12

2.3.2 Subjectivenorm 13

2.3.3 Perceivedservicequality 14

2.3.4 Perceivedvalue 15

2.4 Conceptualmodel 16

2.5 Chaptersummary 17

CHAPTER3:METHODOLOGY 18

3.1 Researchprocess 18

3.2 Questionnairedesign 19

3.3 Samplingmethod 22

3.4 Researchmethod 22

3.4.1 Reliabilitymeasure(Cronbach‟sAlpha) 22

3.4.2 Validitymeasurebyexploratoryfactoranalysis 22

3.4.3 MultipleRegressions 23

3.5 Chaptersummary 24

CHAPTER4:DATA ANALYSIS 25

4.1 Respondent‟sdemographics 25

4.2 ReliabilityAnalysis 26

4.3 Exploratoryfactoranalysis (EFA) 28

4.3.1 EFAforIndependentconstructs 28

4.3.2 EFAforDependent variable 30

4.4 MultipleRegressions 30

4.4.1 Resultsoftesting assumptions 31

4.4.2 Resultsof multipleregressionsanalysis 32

4.5 Discussionofresearchfindings 35

4.6 Chaptersummary 38

CHAPTER5:CONCLUSIONSAND IMPLICATIONS 40

5.1 Conclusion 40

5.2 Implications 41

5.2.1 Forbank‟sManagers 41

5.2.2 Forgovernmentauthorities 42

5.3 Recommendationforfurtherstudies 42

REFERENCE 44

APPENDICES 55

AppendixA:Listofin-depthinterviewparticipants 1

AppendixB:In-depthinterview‟srefinementmeasurementscale 2

AppendixC:Questionnaire(EnglishVersion) 3

Appendix D:Questionnaire(VietnameseVersion) 5

Appendix E:Descriptivestatistics 7

Appendix F:Reliabilitytest 9

Appendix G:Exploratoryfactorsanalysis 11

Appendix H:RegressionsResults 13

LISTOFTABLES Table2 1 RepresentativestudiesutilizingTRAandbankselectioncriteria 11

CHAPTER1:INTRODUCTION 1.1 Researchbackground

Vietnam‟seconomyhasbeenconvertingfromacentrallyplannedeconomytoamarket-

o r i e n t e d e c o n o m y a s f r o m t h e D o i M o i p o l i c y b e i n g i n i t i a t e d i n t h e l a t

e 1 9 8 0 s T h e p o l i c y r e s u l t e d i n a s t e a d y a n n u a l l y e c o n o m i c g r o w t h

o f 4 6 % i n t h e 1 9 8 0 s , 7.6%inthe1990sand7%in2008(Duy,D‟Haese,Lemba,Hau&D‟Haese,2 0 1 2 ) Forinstance,thecontributionofagriculturetototalgrossdomesticproductiono n averageat3.68%perannumfortheperiodof1986to2014,ofwhichgrowthrateo f farming,forestryandfisheryproductionstablyincreaseby5.5%perannumwithint h e samep e r i o d ( M i n i s t r y ofF o r e i g n A f f a i r s , 2 0 1 6 ) A f t e r 20yearssin ce

D o i Mo ipolicy,agriculturalproductionhas

beensteadilygrown,inwhichfoodproductionhada significantrisesince1989.Yet,povertylevelsremainrelativelyhighincountrysidea r e a s , withth ei neq ui ty indev el op me

n tb et ween ru ra l andu rb an re gi onss ti ll be in g large

Additionally,t h e r e i s a w i d e g a p inw e a l t h b e t w e e n r i c h a n d p o v e r t y

-s t r i c k e n h o u -seh o l d -s Ruraleconomie-sinVietnamthereforede-servemore attentionandsupport,ifruralp o v e r t y istobec o n t a i n e d ( S c o t t & B r a s s a r d , 2 0 0 5) K n o w n asa countryofhighp ro po rt io no fr ur al po pu la ti on , 6 6 9 % oft he pe

a sa n t h ous eh ol ds o f V i e t n a m liveinruralareas mainlyattachedto farming(General Statistics OfficeofVietnam,2014).Peasanthousehold,nevertheless,doesfarmingbusinesswithoutrightd i r e c t i o n andwithbeinginshortageoffinance(PhanHuyDuong,BuiDucTung&PhanAnh,2010).Credit,hence,isconsideredtobeanessentialresourcetoimprovef a r m h o u s e h o l d w e l f a r e a n d p r o d u c t i o n I n r u r

a l d e v e l o p m e n t programs,t h e governmentusescreditprogramsinanattempttoprovidetheruralpoorwithaccesstoc h e a p c r e d i t , i n o r d e r t o i n c r e a s e p r o d u c t i v i t y, l i v i n g s t a n d a r d s A c c e s s t o formalcredi t isconsideredtobeanimportanttoolforpromotingproductionandqualityoflife(Duyetal.,2012)

Formalcredit,whichisalso widely namedasagricultural c re d i t , ruralcredit,isg e n e r a t e d fromformallenders(i.e.commercialbanks,cooperativebanks)beinginstitutionsregulatedbytheg o v e r n m e n t a n d o p e r a t e d w i t h i n t h e r e g u l a t o r

y frameworkofthefinancialsystemswhileinformalsourcesaremoneylenders,

pawnshopsa n d f a m i l y o r f r i e n d s ( C a m p e r o &K a i s e r , 2 0 1 3 ) I t

i s b e l i e v e d t h a t informalcreditiseasytoaccessduetoitsconvenience,quickness,widespreadp r e s e n c e ( i e market,n e i g h b o r i n g p l a c e s )

H o w e v e r , t h e g o v e r n m e n t ‟ s f a i l u r e t o interveneagriculturecreditledtotheexistenceofinformallendingactivitiesinVietnam,w h i c h i s s i m i l a r t o m a n y d e v

e l o p i n g c o u n t r i e s I n f o r m a l c r e d i t e x p o s e s somefeaturessuchasbyfarhigherrateofinterestthanformalonewhichisusuallyv e r b a l l y agreed, s h o r t l e n

d i n g p e r i o d w h i c h i s c o m m o n l y ag re ed onm o n t h l y basis, anda t t h e d u e d a t e

v i o l e n c e mightb e a p p l i e d i f t h e b o r r o w e r f a i l s t o r e p a y ( S t a t e Bank ofVietnam[SBV],2016).Lackofcollateral,weakcreditcontractenforcementa n d u n d e r d e

v e l o p m e n t o f i n s u r a n c e s e r v i c e d i s c o u r a g e b a n k c r e d i t o r s t o s e r v e t h i smarket(Ghosh,Mookherjee,&Ray,2000).Itisasymmetryinformationthatforma

easingofthatmanyinstitutionsgetinvolvedinprovidingformalcreditothercommercialbanks,andtheagriculturalcreditbalancehasbeengrowingdramatically(Nguyen&Nguyen,2011).

Further,KPMG(2013)indicatedthatcorporatelendingisthemainactivityofthebanksinVietnamand itaccountsforalmosthalfoftotalloanswhileonly28%areloanst o i n d i v i d u a l s Byc o n t r a s t , i n f o r m a l c r e d i t i n V i e t n a m h a s b e e n i n c r e a s

i n g l y g r o w i n g , andreachedanamountofUS$50billionequivalentto30%oftotallendingb a l a n c e p r o v i d e d bycommercialb a n k s (SBV,2 0 1 3 ) T h i s i m p l i e s t h

a t v e r y f e w farmersi n V i e t n a m i n g e n e r a l a n d i n M e k o n g D e l t a i n p a r t i c u l a

r a c t u a l l y a c c e s s e s formalc re d i t f r o m commercial ba n k s T h u s, e x p l o r a t i o

n o f m o t i v a t i o n f o r farmer‟su s a g e throatsloans”(Lainez,2014)isincreasinglycarriedoutbyresearchersandpractioners

offormalcreditinsteadof“blackcredit”,“cut-Itischallengingforfarmerstogrowoutofpovertywithoutbeingprovidedwitha

d e q u a t e a n d a f f o r d a b l e f i n a n c i a l s e r v i c e s ( P a p i a s & G a n e s a n , 2 0 1 0) C r e d i t accomplishesthisdevelopmentaltaskbyenablingrisk-

aversesmallholderfarmerstoovercometheirliquidityproblemandtomakefarminvestments,particularlyinimprovedfarmtechnologyandinputsthatcouldleadtoincreasedagriculturalp r o d u c t i o n ( F u e n t e s , 1 9 9 6 ) T h u s , a g r i c u l t u r a l c r e d i t i s v e r

y e s s e n t i a l i f e c o n o m i c g ro wt h istobeachievedindevelopingcountriesandemergingmarkets

1.2 ResearchProblem

CanThocityistheprimarily ricegrowing region ofVietnam.In 2 0 1 5, CanthoC i t y transformedapproximately12,000haofrice-

growinglandintoaquacultureland,whi chincreasedaveragevalueofproductionper1haat153millionVNDperannummuchgreaterthanotherregionsinMekongDelta(MinistryofAgricultureandRuralD e v e l o p m e n t , 2016).Yet,mostofVietnam‟scommercialbanksseemtobenotpaidmuchattentiontolendthissegmentofcustomers(VietnamFarmer

‟sUnion,2016)

Astheresult,thereisnoaspecificallydesignedlendingproductforthefarmers,

a n d t h e e x i s t i n g l e n d i n g p r o c e d u r e s a n d p r o c e s s e s f a i l e d t o meett h e r e a l

d e m a n d , ev enrestraintthefarmersfromaccessingthelending.AllofcommercialbankswiththeinterventionfromtheGovernmentarecarryingoutlendingpackagetothissegmentofcustomers,butthepracticaleffectivenessofthesecreditpromotingprogramsisstillverylimited

Consequently,62.1%usersof informalcredit inMekongDeltaare farmersandfamily-sizedbusinesses(Bui, 2016),therehavebeenmanycreditdelinquentsresulted

fromi n f o r m a l c r e d i t o c c u r r e d o v e r V i e t n a m i n g e n e r a l a n d i n

M e k o n g D e l t a inp a r t i c u l a r Inotherwords,thequestionsonrationalesoffarmerswillingorreluctanttouseformalcreditandfac to rs influencingtheirbehavioral intentiontoaccessformalc r ed i t inVietnamhavereceivedincreasingconcernsofresearchers.Manypriorstudiesonagriculturallendinghavebeenconductedwithregardtot h e banklending f or farmers F o r example, B e t u b i z a an dLeatham (1 99 5) indicatedfactors a f f e c t i n g c o m m e r c i a l b a n k l e n d i n g t o a g r i c u l t u r e ,

O l a d e e b o a n d O l a d e e b o (2008)c o n d u c t e d s t u d y o n f a r m e r s ‟ l o anr

e p a y m e n t , a n d F r a n g o s , F r a g k o s , S o t i r o p o u l o s , ManolopoulosandValvi(2012)indicatedfactorsaffectingcustomer‟sdecisionfortakingoutbankloans.InVietnam,mostofthestudieswereconductedtoinvestigatefarmers‟accesstobankcreditinHaiDuongprovince(Chauetal.,2012),ruralcreditmarketinthe Mekong RiverDelta

accessibilityt oformalc r e d i t int h e s u b u r b o f H a n o i ( N g u y e n & N g u y e n, 2 0 1 1 ) , f o r m a l a n d informalcreditinfourprovincesofVietnam(Barslun&Tarp,2008),accesstocredita n d borrowingbehaviorofruralhouseholdsinatransitione

i r b e h a v i o r a l i n t e n t i o n Ass u c h , t o f u l f i l l t h e g a p int h e

c o n t e x t o f Vietnam,thisstudyaimstoinvestigatethefactorsinfluencingtheVietnamesefarmers‟behavioralintentiontoaccessformalcreditfromcommercialbanksinV i

e t n a m thatisempiricalevidencefromCanThocityinwhichdemandoffinancingt h e farmingactivitiesisincreasinglyimportant

Thiss t u d y i s a b o u t toa d a p t t h e modifiedT R A ( t h e o r y o f r e a s o n e d

a c t i o n ) model,whichincludestwooriginalconstructs(i.e.attitude,subjectivenorm)andtwon e w l y addedconstructs (i e perceived s e r v i c e quality,pe r c e i v e d value),t of i n d the p o s i t i v e e f f e c t s o n b e h a v i o r a l i n t e n t i o n I n l i t e r a t u r e , T R

A m o d e l h a s b e e n w i d e l y employedintesting(behavioral)intentiontoaccept/

useinternet/mobilebanking,f i n a n c i a l s e r v i c e /

p r o d u c t (Ismail,Azmin& Thurasamy,2 0 1 4 ; A m i n , 2 0 1 2 ; Amin,

Ghazali&Supinah,2010;Nor,Shanab&Pearson,2008).Additionally,forthesakeofmanagerialandmarketingstrategies,perceivedservicequalityandperceivedvalueh a v

e b e e n w i d e l y u s e d t o t e s t t h e a c c e p t a n c e o f , t o t e s t t h e p r e f e r e n c e o f

c u st o m e r / co n s um e r i n s e l e c t i n g a c e r t a i n s e r v i c e /

p r o d u c t , a n d t o t e s t t h e customerloyalty( L i e n , W e n , H u a n g & Wu,2 0 1 5 ;

Z a m e e r , T a r a , K a u s a r & M o h s i n , 2 0 1 4 ; A k d a g &Zineldin,2011;Yang&Peterson,2004).Researchonmanyserviceindustriesalsosuggeststhatperceivedvalueplaysamoreimportantrolethanp e r c e i v e d qualityininfluencingcustomersatisfactionandloyalty(Shamdasani,Mukherjee&Malhotra,2008)whichdrivetocustomer‟sbehavioralintention.P r e v i o u s s t u d i e s s u g g e s t t h a t customers‟p o s i t

i v e b e h a v i o r a l i n t e n t i o n s comef r o m t h e i r satisfaction,whilesatisfactionistheresultofgoodservicequality(Ali,Le if u, Y a s i r R a f i q & H a s s a n , 2 0 1 5 ;

A l q a s a & B a l h a r e t h , 2 0 1 5 ; L a d h a r i & L a d h a r i , 2 0 1 1 ; Abedniya&Zaeim,2011).Thus,theconceptofperceivedvaluehasbeenalsop r o p o s e d , w h i c h s i m u l t a n e o

u s l y c o m b i n e s t h e b e n e f i t a n d c o s t a s p e c t s t o e x p l a i n customerbehavioralintentions(Monroe,1991;Zeithaml,1988)

Question1:whetherdoesattitudeaffectthefarmer‟sintentiontouseinCanThocity?Ifyes,howistheeffect?

Question2:whetherdoessubjectivenormaffectthefarmer‟sintentiontouseinCanThocity?Ifyes,howistheeffect?

Results fromthe studyareexpectedto show thesubsidizedcreditthatpenetratesruralf a r m h o u s e h o l d s i n C a n T h o City,w h i c h i s c o n s i d e r

e d t o beo n e o f t h e keyagriculturalregionsinVietnam

1.4 Researchscope

CanThoCity,locatedintheCentreoftheMekongDelta,isacitydirectlyundert h e Centralauthorities.Itisknownas“thecapitalcityoftheSouthwesternVietnam”morethanonehundredyearsago(VietnamTradePromotionAgency,2015).CanThoci ty hasadvantagesconcerningagricultureandaquaticproducts,aswellasing e og r a p h ic a l positionthathelpsthecitydevelopinareassuchasurbaninfrastructure,trafficinfrastructure,hi-techagriculture,agricultural–

aquaticproductsandtheseafoodp r o c e s s i n g , tourismandsupportiveindustries

Theformalcreditprovidedbyformalfinancialinstitutionsmentionedinthisstudyi s withintheextentoflicensedbanks(i.e.bothstate-

ownedbanksandprivatecommercialbanks,cooperativebank) Assuch, forthepurposeofconvenient sampling,this studyfocusesonthefarmers w ho liveinCanThoCity andw ho are bo rr owers a n d ( w o u l d -

Firstly,t h e T R A m o d e l s w e r e d e m o n s t r a t e d i t s a p p l i c a b i l i t y t o i

n p r e d i c t i n g

intentionovertheworld,butonlyfewTRA-basedresearcheswereconductedinthecontext offormalcreditinCantho,Vietnam.Specially,theresearchmodelwasbuiltu p onthecombinationoftwoTRAconstructsandtwonewconstructs(i.e.perceivedservicequalityandperceivedvalue)toevaluatefarmer‟sbehavioralintention,whichh a s noteverinvestigatedinacceptanceofformalcredit.Onthebasisofthefeedbackf r o m ther esp on den ts inVietnam,t he empirical

ev id enc e of th is study willindicate

thattheconsumerintentioncanbesignificantlyexplainedbythemodifiedTRA.Asar e s u l t, t h i s w o r k ist o d e m o n s t r a t e t h e v a l i d i t y a n d g e n e r a l i z a b i l i t y ofT R A in

Finally,a s m e n t i o n e d a b o v e i n f o r m a l c r e d i t a c c o u n t s f o r a r o u n d 3 0 % o

f t o t a l lendingbalance,thisstudyprovidessomemanagerialrecommendations inorderfortheleadershipofcommercialbankstoreducethisfigure

Thefifthchapterpointsout c o n c l u s i o n , i m p l i c a t i o n s , and directions f

o r future r e s e a r ch

Chapter1introducedoverviewofresearchincludingresearchbackground,statementofproblem,r e s e a r c h o b j e c t i v e s , rese ar ch sc o p e, r e se a r c h c o n t r i b u t i o n , an

d r es e a r c h structure.Thechapter2presentstheTRAtheoryassociatedwithfarmer‟sbehavioralintentiontouseformal

credit,andthemodelstestingthefarmer‟sbehavioralintentiont o a c c e p t a

Moreover,aconceptualmodelisbuiltresultingfromthehypothesesgeneratingfromextantliterature,simultaneously,itsconstructsandrelationshiphypothesizedamongtheseconstructsarealsodiscussed

2.1 Foundationaltheory

Studiesonc r e d i t b o r r o w e r s ‟ a c c e p t a n c e a n d u s e h a v e beenc o n

d u c t e d extensively becausebankcredithavebeeninwideusage,andseveralmodelso r ig i n at ed fromdifferenttheoreticaldisciplines(i.e psychology, sociologyandi n f o r m a t i o n systems)havebeen

developedtoexplaintheacceptanceandusage.ThereexistarisingnumberofliteraturespertainingtotheapplicabilityoftheTRAtobankmarketingc o n t e x t , e s p e c i a l l y i n t

h e c o n t e x t o f f i n a n c e (Amin,2 0 1 2 ; Amine t a l , 2 0 1 0 ; Lada,Tanakinjal&Amin,2009).TheTRAisselectedasfoundationaltheoryint h i s s t u d y b e c a u s e i t r e c e i v e s r

i c h e m p i r i c a l s u p p o r t s i n b e h a v i o r a l i n t e n t i o n T h i s e x p l a i n s thattheselectionoftheTRAisbasedonitsparsimonyandpredictivepowerw h i c h makesi t easyt o a

p p l y ind i f f e r e n t c o n t e x t o f s t u d y ( i e b a n k i n g s e r v i c e , b a n k i n g technology,onlinepurchase)

Firsti n t r o d u c e d byF i s h b e i n a n d A j z e n ( 1 9 7 5 ) i n e f f o r t tof o u n d a r e l a t i o

n s h i p am o n gst beliefs,attitudes,intentions,andbehavior(Taib,Ramayah&Razak,2008),T R A a s s e r t s t h a t a t t i t u d e t o w a r d s formalc r e d i t a n d s u b j e c t i v e n o

r m a r e t h e antecedentsofperformedbehavior.Togaindeeperunderstandingofthefactorsinfluencingbehavior,itisrequiredtolooki n t o beliefst h a t individualsh o l d aboutthemselvesa n d t h e i r e n v i r o n m e n t T h e r e f o r e , b e l i e f s a r e v i e w e d a s underlyinga p e r s o n ‟ s a t t i t u d e a n d s u b j e c t i v e norm,a n d u l t i m a t e l y d e t e r m i

n e t h e i ntentiona n d b e h a v i o r T h e T R A a l s o l e a d s t o m a r k e t i n g s t r a t e

g i e s asformalc r e d i t s u b j e c t t o individual‟sattitudeandsocialinfluence.Thisimpliesone‟sattitudeisappearedasanintrinsicforcewhichgeneratefavorableanoutcomefo

radoption,whilstgoodsubjectivenorm forf or ma l cre di t willbuildbetter“environment”for individuals to

Attitude toward behavior Behavioral beliefs and evaluation of outcomes

Actual behavior Behavioral intention

Normative beliefs and motivation to complySubjective norm

leofthemodel,d e r i v e d fromtheTRAwhich posits thatbehavioralintentions,

ratherthanattitudes, are themainpredictorsofactualusageofbankcreditamongstfarmers

technology,security,dichotomousconsumersocietiesandalackofregulation ( S t e r n

q u i s t , 2007ascitedinDiallo,2015)

However,asthesecountrieshavedeveloped,localbanksbegantorealizeeconomiesofs ca l e in p u r c ha s i n g andope ra ti on s, andmodernba nk in g systemsand strategicapproacheshav e emerged.Asthecompetitionis becomingmoreintensive a m o

n g thebankoperators,itisbecomingmandatoryforthemtomonitorthea w a r e n e s

s o f c u s t o m e r s b a s e d u p o n q u a l i t y o f s e r v i c e s , a n d v a l u e s r e c e i v e d byi t scustomerinreturn

Liket h e e x t a n t s t u d i e s c o n d u c t e d i n s u r r o u n d i n g c o u n t r i e s , t h i s r e s

e a r c h , therefore,integrateso t h e r v a r i a b l e s i n w h i c h i t i s c l a s s i f i e d a s a new“ i

n d e p e n d e n t v ari ab les” namely“ perceivedv a l u e ”a n d “ perceivedservicequality”inadditionto“attitude”,“ s u b j e c t i v e norm”e x p l a i n i n g “ b e h a v i o r a l i n t e n t i on”.Contrarily,t h e p r e s e n t s t u d y omits“ a c t u a l b e h a v i o r ” a n d o t h e r t w o o r i g i n a l

e x t e r n a l c o n s t r u c t s o f T R A T h i s i s e s s e n t i a l s i n c e t h e s t u d y isi n t e r e s t e

d t o h i g h l i g h t t h e typicalf a c t o r s a f f e c t i n g famers‟us age in te nt io n of b a n k c

r e d i t only.T h u s , beh av io ra l intentionof T R A modelischangedto“intentiontousebankcredit”.Thisapproachissimilartot h a t ofChiu,Lin,andTang(2005)

2.2 Reviewonbehavioralintention

Behavioralintentionisdefinedas“thedegreetowhichapersonhasformulatedconsciousplanstoperformornotperformsomespecified futurebehavior” (Warshaw

&D a v i s , 1 9 8 5 , p 2 1 4 ) C o n s i s t e n t

t o a l l modelsp o r t r a y i n g f r o m p s y c h o l o g i c a l theories,whicharguethatindividualbehaviorispredictableandinfluencedbyindividualintention

Parasuraman,Z e i t h a m l , a n d Berry( 1 9 9 4 ) andi d e n t i f i e d f i v e d i m

e n s i o n s

o f b e h a v i o r a l intentions:loyaltytothecompany,propensitytoswitch,willingnesstopaymore,externalresponse toproblem,andinternalresponse toproblem.Studying the

r e l a t i v e influenceofservicequalityonthefivebehavioralintentiondimensions,the

yf o u n d positiveeffectswithloyaltytocompanyandwillingnesstopaymore,negativee

f f e c t s withpropensity toswitchandexternalresponse toproblem, significanteffectswithinternalresponsetoproblem(Parasuramanetal.,1994)

andnon-Bloemer,D e R u y t e r , a n d Wetzels( 1 9 9 9 ) f o u n d d i f f e r e n t d i m e n s i o n s f o r

b e h a v i o r a l i n t e n t i o n s : r e p u r c h a s e i n t e n t i o n s , w o r d o f

-m o u t h c o -m -m u n i c a t i o n , p r i c e sensitivity,andco-mplainingb e h a v i o r The

ya l s o f o u n d t h a t r e l a t i o n s h i p s b e t w e e n servicequalityandbehavioralintentionshadnotabledifferencesacrossindustries

Behavioralintentionm a y changeowingtou n f o r e s e e a b l e e v e n t s o r timeintervals.High serviceq u a l i t y a n d a p o s i t i v e e x p e r i e n c e o f t e n

l e a d t o f a v o r a b l e b e h a v i o r a l i n t e n t i o n toward the service provider,andto

thecustomerwillinglypayinga higherprice(Hoch&Deighton,1989).Furthermore,loyalcustomersaremorelikelytorecommendfriends,relativesorotherpotentialcustomerstoaproduct/servicebya c t i n g asfreeword-of-

mouthadvertisingagents(Shoemaker&Lewis,1999)

Itc o u l d b e s e e n t h a t s t u d y i n g b e h a v i o r a l i n t e n t i o n t o u s e s e r v i c e w a

s widelystudiedacrosstheworldinawiderangeofservice

Table2.1:Summaryoftheliteratureonbehavioralintention

Liu,Furrer,andSudharsh

an(2001)

studyingtherelationshipbetweencultureandbehavioralintentio

nsinaserviceq u a l i t y conte

UnitedStates,Asiancountries

Alqasa1

Jen, Tu,andLu(2011) Transportationmanagement integratedframeworkfromtheattitudinalpers

andsystematicallyonthebasisoftheinformationavailablet o them(Ajzen,1991).

Iti s t h e e x t e n t t o w h i c h a p e r s o n l i k e s ord i s l i k e s a n o b j e c t a n d a p

e r s o n ‟ s attitudetowardabehaviorisdeterminedbythesetofsalientbeliefs heholdsaboutperformingthebehavior.Inordertopredictattitudefrombeliefs,therearefourstepsF i r s t , w e h a v e t o e l i c i t a s u b j e c t ‟ s s a l i e n t b e l i e f s t h e n w e n e e d tomeasureh o w a subjectevaluatestheoutcomeofeachsalientbelief.Third,wemeasuret h e beliefstrengthbyaskingasubjecttoindicatethelikelihoodthatperformingabehaviorwillr e s u l tinagivenoutcomeandlastly,togettheoutcomebymultiplyingtheproductofe a c h outcomeevaluationbythecorrespondingbeliefsstrengthtopredictasubject‟sattitude.Inthepresentstudycontext,theacceptanceofbankcreditisinfluencedbyattitudet o w

Ramayaha n d S u k i ( 2 0 0 6 ) w h o e x a m i n e d M a s t e r o f B u s i n e s s A d m i

n i s t r a t i o n students‟intentiontousemobilepersonalcomputer(PC)bytheuseofconveniencesampling,f o u n d t h a t a t t i t u d e w a s s i g n i f i c a n t l y related t o b e h a v i o r a l i n t

e n t i o n T a r k i a i n e n andSundqvist(2005),ontheotherhand,assertedthatconsumers‟

intentionstobuyorganicf o o d canbepredictedwiththeirattitude.Thismeans,attitudeisagooddrivertoexplainbehavioralintention.Correspondingly,thepresents t u d y infers t

Rouibah,T h u r a s a m y, a n d May(2009)f o u n d t h a t t h e s u b j e c t i v e normwas t

h e mostsignificantfactorthatinfluenced intentiontoacceptInternet bankin

g Inotherw o r d s, t h e g r e a t e r t h e s u b j e c t i v e n o r m p r e s s u r e s t h e h i g h e r t h

e i n t e n t i o n t o a c c e p t Internetbanking.TarkiainenandSundqvist(2005)assertedthatconsumers‟intentionst o buyorganicfoodcanbepredictedwiththeirsubjectivenorm.GopiandRamayah( 2 0 0 7 ) f o u n d t h a t s u b j e c t i v e n o r m h a d a d i r e c t p o s i t i v e r

e l a t i o n s h i p t o w a r d s b eh av io r al intentiontouseinternetstocktrading.Ladaetal.(2009)foundthatsubjectivenormwassignificantlyrelatedtohalalproductsuseamongconsumersinL a b u a n T a i b , e t a l

( 2 0 0 8 ) a l s o f o u n d a s i g n i f i c a n t r e l a t i o n s h i p b e t w ee n s u b j e c t i v e n o r mandMusharakahMutanaqisahacceptance.Thesestudies,ontheotherhand,arein linewithVenkateshandDavis(2000),TeoandPok(2003)whoreportedasignificantr e l a t i o n

s h i p b e t w e e n s u b j e c t i v e n o r m a n d b e h a v i o r a l i n t e n t i o n Correspondingly,t h i s s t u d y i n f e r s t h a t s u b j e c t i v e n o r m i s c o n s i d e r e d a s t

h e keydeterminantinfluencingfarmer‟sbehavioralintentiontouseformalcredit.Hencethef o l l o w i n g hypothesiswasproposed:

d se rv ice q u a l i t y hasbecomeo n e o f t h e topis sues, p a r t i c u l a r l y inthedynamicandcompetitivemarketingofthebankingservices.S e r v i c e q u a l i t y isw h a t s e t s a b

a n k a s i d e f r o m i t s c o u n t e r p a r t s , w h e r e t h e s e r v i c e s o f f e r e d s h o u l d g o o

v e r t h e e x p e c t a t i o n s o f consumers( G i l l , F l a s c h n e r & S h a c h a r , 2 0 0 6 ) Qualityofservicesisanessentialelementtoincreasecustomersatisfactionandt

o measureconsumerperceptiontowardbankingproductsandservices.Manystudiesh a v

e indicatedthatperceivedvaluemoreaccuratelymeasuresbankingclient‟sper ceptions o f s e r v i c e q u a l i t y t h a n servicequality( A d i l , 2 0 1 3 ; Vanpariya,2 0 1 0) Accordingly,theperceivedservicequalityisusedinthisstudytomeasuretheserviceq u a

l i t y p e r c e p tionso f farmer‟sb e h a v i o r a l i n t e n t i o n t o u s e formalc r e d i t i n C a n t

h o City,Vietnam.Severalpriorstudiesshowedthatpoorservicesleadtobankswitching(Garl an d, 2005).Specifically,SchmidtandBergsiek(2009)reportedthatintheU.S.,4 0

%ofconsumersswitchedbanksowingtoineffectiveservices.Similarly,Allred

andAddams( 2 0 0 0 ) a l s o r e p o r t e d t h a t 5 0 % o f t h e i r t o t a l r e s p o n d e n t

s s w i t c h e d b a n k s o win g

toissuesregardingservice.Thequality-intentiontouseproductsrelationshiph a s beeninvestigatedinliterature,andqualitywasreportedtoantecedeconsumer‟s

productuseviaintentiontouse.C o n t r a s t i n g l y , negativeperceptionsof itleadtolackofintentiontopurchaseservice/

product(Kouthouris&Alexandris,2005).Assuch,thefollowinghypothesisw a s proposed

Hypothesis3:Perceivedservicequalitypositivelyassociateswithfarmers‟b e h a

v i o r a l intentionuseformalcredit

2.3.4 Theeffectofperceivedvalueonfarmer’sbehavioralintentiontouseformalcredi t

Perceivedv a l u e , a s d e f i n e d byZ e i t h a m l ( 1 9 8 8 ) , i s “ t h e c o n s u

m e r ‟ s o v e r a l l assessmentof t h e utility ofa productbased o n perceptions of

w h a t isreceivedandw h a t i s g i v e n ” ( p 14).A c c o r d i n g tot h i s d e f i n i t i o n , v a l

u e i s i d e n t i f i e d t h r o u g h f o u r dist inct meanings:valuecanmean(1)lowprice;

(2)whatacustomermightdesireinap r o d u c t ;

( 3 ) t h e q u a l i t y t h a t o n e o b t a i n s f o r t h e p a i d p r i c e ; o r ( 4 ) w h a t a c u s t o m e r receivesf o r w h a t a c u s t o m e r g i v e s I n o t h e r w o r d s , p e r c e i v e d s e r v i c

e v a l u e i s a t r ad e o f f ofvisitors‟perceptionsbetweenwhatthey,thevisitors,givefortheservicetheyreceive.Perceivedvaluehasbecomeanimportantcriterioninthedevelopmentofmanagerialstrategiestocreate,communicate,anddelivervaluetothecustomer( K o

t l e r & K e l l e r , 2 0 1 1 ) I t i s d e f i n e d a s t h e consumer‟so v e r a l l assessmento f t h e

u t i l i t y o f a p r o d u c t b a s e d o n p e r c e p t i o n s ofw h a t i s r e c e i v e d a n d

w h a t isg i v e n (Zeithaml,1988),andalsoasrecognizingtherationalityofpriceincomparisonwithq u a l i t y (Livesey&Lennon,1978)

Perceivedv a l u e i s measuredbyassessing t h e s p e c t r u m o f a consumer‟se x p e r

i e n c e ( S w e e n e y & S o u t a r , 2 0 0 1 ) , a n d bymeasuringt h e d i s c r e p a n c y b e t w e

e n a c t u a l costandperceivedbenefit(Gallarza&Saura,2006).Itistheoptimumtran

individual‟sconsumptionprocessanditplaysanimportantr o l e intheassessmentofservicequality,customersatisfaction,andbehavioralintention(Dodds,Monroe&Grewal,1

highperceivedvalues c o r e indicatesthatacustomerperceivesaproductoraserviceofferedasprovidinggoodvalueforthemoneywithrelativelyfewdetriments,whilealowsco

reindicatesad e a l isperceivedasbad,withalowlevelofbenefitsandahighlevelofdetriments.

Studiesindicatethatperceivedvaluemay

eitherleaddirectlytotheformationoff e el in g s o f o v e r a l l s a t i s f a c t i o n o r m a y r es

u lt i n t h e f o r m a t i o n o f p e r c e p t i o n s t h a t a prod ucto r s e r v i c e ‟ s performance

i s d i f f e r e n t t h a n e x p e c t e d , w h i c h c a n i n f l u e n c e o v e r a l l satisfactionfeelings(McDougall&Levesque,2000;Swait&Sweeney,2000;C a r u a n a & F e n e c h, 2 0 0 5 ) R e s e a r c h o n m a n y s e r v i c e i n d u s t r i e s a l s o s u g g e s t s t h a t percei

offtoarguethatperceivedservicevalueisa ratiobetweenperceivedtotalbenefitsreceivedtoperceivedtotals a c r i f i c e s t a k i n g i n t o c o n s i d e r a t i o n t h e a v a i l a b l e

o f f e r i n g s a n d perceivedc o s t I n addition,t h e p e r c e i v e d v a l u e a l s o h e l p

s t o e x p l a i n c u s t o m e r b e h a v i o r a l i n t e n t i o n s ( C h o i etal.,2004;Cronin,Brady&Hult,2000;Lapierre,Filiatrault&Chebat,1999;Liu,Leach&Bernhardt,2005).Thesestudiesalsoindicatethatperceivedvalueplaysa v e r y i m p o r t a n t r o l e i n determiningcustomerb e h a v i o r a l i n t e n t i o n s T h i s m a y b e b e c a u s e p e r c e i v e d v

a l u e i s a c o n c e p t w h i c h s i m u l t a n e o u s l y i n t e g r a t e s c u s t o m e r s ‟ p e

r c e p t i o n ofbenefits andcosts(Monroe,1991;Zeithaml,1988), wh il e satisfactionresearchonlyfocusesonthebenefitaspect.Therefore,thefollowinghypothesiswillb e exploredforeachofthecorporateassociationsidentifiedinthefieldstudy:

Hypothesis4:Farmer‟sperceivedvaluepositivelyassociatesfarmers‟behavioralinte

ntiontouseformalcredit

2.4 Conceptualmodel

Theforegoingofliteraturereviewinthisstudyisdiscussedasabasisford e v el o p i n gaconceptualframework.Consistentwiththeconceptualization,thisstudyu s e d t h e T h e

o r y o f R e a s o n e d A c t i o n ( T R A ) S p e c i f i c a l l y , a m o d e l i s d e v e l o p e d tos t u d

y t h e r e l a t i o n s h i p b e t w e e n a t t i t u d e , s u b j e c t i v e norm,p e r c e i v e d servicequality,

Attitude H1+

Use Formal Credit

Perceived Service Quality

H4+

Perceived Value

perceivedv a l u e , a n d b e h a v i o r a l i n t e n t i o n F i g u r e 1 b e l o w s h o w s amodelo f t h e hypothesizedrelationshipsinvestigatedinthisstudy

d t e s t hypotheseso f t h e r e s e a r c h model

depthi n t e r v i e w isc o n d u c t e d t o helpm e a s u r e m e n t s c a l e s c l e a r e r a n d understandable.B e s i d e , t h i s c h a p t e r a l s o aimsa t e x p l i c a t i n g t h e r e s e a r c h a p p r

b e b o r r o w e r s i n C a n t h o Citya n d s u r r o u n d i n g a r e a s Afterconductingmainsurvey,theSPSS22isusedtotest(i)reliabilitybyCronbachAlpha,

( i i ) c o n v e r g e n t a n d discriminantv a l i d i t y oft h e d a t a byExploratory F act or s Analysis.Thehypothesesdevelopedbasingontheoreticalbackground,then,aree v a l u a t e dbymultipleregressions.TheresearchprogressisdepictedatFigure3

Literature Review In-depth Interviews Main Survey

Reliability Test

Eliminate corrected item - total correlation < 0.4 Evaluate Cronbach‟s Alpha > 0.6

Exploratory Factors Analysis (EFA)

Model fit, item loadings 0.05

Composite reliability, extracted variances, uni-dimensionality test, convergent validity and discriminant validity

Multiple Regression

Theoretical model test Model fit, Component fit R2

witheachofthemwasconductedtodefinewhichitemswouldbeeliminatedorwhichitemsw o

u l d b e a d d e d u p o r b e r e v i s e d tob e s u i t a b l e t o V i e t n a m c o n t e x t A f t

e r adjustingt h e f i r s t questionnairet a b l e , t h e q u e s t i o n n a i r e w a s d e l i v e r

e d t o a s m a l l samplesizeoffifteenconvenientcolleaguesandclientstorecognizewhetheranyitemi s s t i l l u n c l e a r t o u n d e r s t a n d , o r i s s u s c e p t i b l e t o m i s u n d e r s t

a n d A f t e r g e t t i n g a l l f eed b a c k s, thefinalversionofquestionnairesisavailableforthemainsurvey

ListofparticipantsisdepictedinAppendixA.AllthecommentsaretakennoteintheAppendixB.ChangesoftheVietnameseversionweremadeforthepurposeofaccurac

y andclarity.Al th ou gh most ofthescaleswereusedwidelyinthepreviousr e s e

a r c h , thisstudywasimportantbeforelaunchingthequantitativesurveyduetothedi ff ere

n ces intheresearchsetting:applyingintheVietnamesecontext.Intheendofth is study,themodificationandrevisionofquestionnairesurveyarenoticedinAppendixB.TheofficialquestionnairesurveysareshowninAppendixCforEnglishv e r s i o n andAppendixDforVietnameseversion

Membersoflocalassociationsinmycommunitylikefarmer‟sunion,women‟su n i o n, youth‟sunion, encouragemetouseformalcreditforfarmingactivities SJN2Peoplehavinginfluenceonmydecisionrecommendmeborrowbank‟sloans SJN3

Comparedtoinformalcredit,thebankchargesmefairlyforsimilarloans PVL2Comparedtoinformalcredit,thebankprovidesmorefreeservices PVL3ComparingwhatIpaytowhatImightgetfromotherinformalsources,Ithinkthebank

3.3 Samplingmethod

Aftergettingallfeedbacks,thefinalversionofquestionnairesisavailableforthemainsurvey.T h e q u a n t i t a t i v e i n -

d e p t h i n t e r v i e w w a s u s e d t o e v a l u a t e t h e itemsr e s u l t e d

fromin-depthdiscussionspriortoconductmainsurvey.Themainsurveywasc o n d u c t e d inCanThofromMaytoJuneof2016.Withthepriornotice,theq uest ion naire whichisformattedinGoogleDocswasemailedtobothborrowersandwould-

enoughquantityfortheanalysis.Them i n i m u m sample sizewas 100andnotlessthanfivetimesofitems(Hairetal 2010),thus:n>100andn=5k(wherekisthenumberofitems).Withexpectationtoobtainasamplesizeofabout300,about500questionnaires

n c i n g thevalueofthemodel

3.4.1 Reliabilitymeasure

Inordertoassessreliabilityofeachofscaleswithparticularsample,aswellasconsidertheinternalconsistencyofthescales,itisnecessarytouseCronbach‟sAlphacoefficientwhichshouldbeabove0.7(Devellis,2003).Also,thecorrecteditem-

totalcorrelationvaluesshould be atleast 0 4 toens ure eachofitemswa s measuringt

he samefromthescaleasawhole(GliemandGliem,2003;Hairetal.,2006)

3.4.2 ValiditymeasurebyEFA(ExploratoryFactorAnalysis)

Inordertoevaluatethevalidityandthecorrelationamongvariablestoidentifyunderlyingfactorsordefinenumberofextractedfactors, EFAwasappliedwiththe o b

l i q u e a p p r o a c h u s i n g t h e P r o m a x method.H o w e v e r , s o m e r e q u i r e m e n t sofE F A shouldbesatisfied(Pallant,2011):

- Theminimum ofsamplesizeshouldbeatleast100andrate ofobservationsperitemsofmodelsshouldbefivecasesforeachoftheitems

- Theminimumsamplesizebasedontheformula:

n>50+8m

=50+8x5=90samples,wherem:numberofindependentvariablesintheconceptualmodel

- Themulticollinearitydidnotexist,sorvalue,thecorrelatedscorewaslessthan0.9

n t i o n o f b a n k c r e d i t T h e g e n e r a l i z e d equation(DonaldandPamela,2006)isasfollow:

Chapter3 p r es e n t e d r es e a rc h m e t h o d o l o g y toexaminescale v a l i d a t i o n a n d a n

a l y ze t h e collecteddata.Inchapter4,resultsofstudywouldbeshownandanalyzedwithsamplen=250.First,respondents‟demographicswereanalyzedbyusingtheSPSS–

S t a t i s t i c a l softwarepackage.Secondly,resultsofscalevalidationwerepresented.Inthissection, thedata oft h i s research wa s e va l u a t e d through t w o ste ps.Step1 u s e d Cr o n b a c h ‟ sAlphaandExploratoryFactorAnalysis(EFA)toexaminereliabilityandv a l i d i t y ofthescalemeasurement.Instep2,multipleregressionswereemployedtotestfourhypotheses.Finally,resultsofhypothesestestingwerediscussed

ThecollecteddatawereanalyzedusingtheSPSS–

Statisticalsoftwarepackage.T h i s partaimedtoprovidethegeneralinformationofrespondents.Theresultsofthed em o g r a p h i cs analysiswere summarizedin table4.1.Initialanalysisofdata

indicatedthatgenderwasnotequallybetweenfemaleandmale.Malewasdominantwith67.2%o

f respondentsandfemaleonlyseized32.8%ofrespondents.Majorityofrespondentswh otookpartinthisstudy(74%)wereinemploymentage(26-

45)whileagegreatert h an 55accountedfor11.6%,agerangedfrom46to55was8.4%,andagefrom 18to

25onlyaccountedfor6%

Remarkably,mosto f r e s p o n d e n t s w e r e h i g h

-s c h o o l g r a d u a t e -s ( 6 5 6 % ) , t h o -s e h a v e vocationalleveloccupied23.6%andcollegiatelevelwas10.8%.Morethanhalfo frespondents(54.8%)haveeverborrowedbank‟sloan,and76.4%outofthoseloanswer eusedforthepurposeofagriculturalproduction

Demographic ProfileCategory Male Female Total

18-2526-3536-4546-55

>55Total Collegiate level Vocational level

Highschool Total Yes

No Total Yes No Total

Frequency

168822501595902129250275916425013711325019159250

Percentage (%)

67.232.8100638368.411.610010.823.665.610054.845.210076.423.6100

m e d t h a t mostl i k e l y correlated w i t h mosto f o t h e r scaleitemsandwouldbecomeagoodpartofthistotalratingrate

Ont h e o t h e r h a n d , i f t h e C o r r e c t e d i t e m –

T o t a l c o r r e l a t i o n o f a n y itemw a s negativeortoo low(lessthan0.4),itwas

necessaryto re-considertheitemintermsofw o r d i n g problemsandconceptualappropriateness(Leechetal.,2005).A