Company overview
Viet Nam Prosperity Joint Stock Commercial Bank (VP Bank)
Vietnam Prosperity Joint Stock Commercial Bank (VP Bank) was established on August 12, 1993 After nearly 25 years of operation, VP Bank has developed its network to
219 transaction points with a staff of nearly 24,000 employees By the end of 2017, VP Bank's charter capital has increased to VND 15,706 billion
VP Bank is gradually asserting the reputation of a dynamic bank with stable and responsible financial capacity to the community In 2017, VP Bank closed its 5-year journey
(2012-2017) with great achievements in scale and profitability, making VP Bank one of the leading commercial joint stock banks in Vietnam
Especially, 2017 is a historic milestone for the bank when nearly 1.5 billion shares were officially listed on HOSE, attracting great attention of domestic and international investors
VP Bank has significantly strengthened its brand through consistent efforts, earning numerous prestigious awards Notably, in 2017, the bank was honored with 20 domestic and international awards, reflecting the recognition from esteemed organizations for its excellence.
Bank's impressive growth in brand value
VP Bank's new brand with the motto "Act for dreams" is built from the following elements: Professional, Dedicated, Different, and Simple Towards a long-term vision, VP
Bank is determined to promote the image of a bank that always strives to serve customers with the friendly attitude and the fastest speed
In 2017, VP Bank was recognized by Brand Finance, a top global brand valuation consultancy, as one of the four banks with the highest brand value in Vietnam and among the 22 most valuable brands in the country.
Organizational chart
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Source: VP Bank’s website (www.vpbank.com.vn) Figure 1: VP Bank’s organization chart
Risk Management Department
The organization chart of the Risk Management Department outlines its structure and key roles, emphasizing the importance of effective risk management strategies.
The Risk Management Department is structured into various teams, as illustrated in Figure 2 Within the scope of this thesis, three teams are identified in the retail segment, specifically the Debt Collection Center, which encompasses both Debt Collection Strategy and Retail Debt.
Collection), Retail Risk and Verification Department should be focused on Each team has specific responsibility:
- Develop management and debt recovery strategies;
- Build and manage automatic debt reminder system;
- Set up training programs to train debt recovery officers;
- Control the quality of debt recovery through the reporting system;
- Make plans for debt recovery in each period based on the strategy of the bank's leadership
Responsible for recovering loans from individual customers, including:
- Remind pre-due debts and overdue debts by SMS message system based on the list of loans due in the month;
- Call overdue customer to collect debt according to the available scenario;
- Field visit to meet customers directly;
- List out loans with signs of fraud then sent to the in charge department for further actions;
- List out customers having difficulties in repaying debts to implement financial solutions
- Analyze and assess customer's risk level when making a loan decision;
- Assessing risks with disbursed loans: determining the financial situation of loan applicants
- Develop and implement a credit risk management framework
- Develop and implement a credit risk strategy based on VPB's credit risk appetite
- Give opinions on credit risk aspects for the deployment of new credit products and credit activities in the new market
- Prepare annual debt collection plan
- Evaluate debt recovery strategies that are being applied
The evaluation of debt collection activities should be conducted in comparison to the established plan, ensuring that all processes align with the intended objectives It is essential to assess the effectiveness and efficiency of these activities to identify areas for improvement and optimize overall performance.
- Evaluating policy documents related to debt recovery activities
- Review reports on debt recovery activities and debt recovery quality
Symptoms: High bad debt (NPL) ratio in Retail segment
Bad debt refers to loans issued by banks that cannot be recovered when due, often due to factors such as customer defaults, business failures, or bankruptcies This issue significantly hampers capital flow within the economy, as a higher non-performing loan (NPL) ratio increases the risk and potential losses for commercial banks Consequently, bad debt is a primary factor that restricts and limits credit availability in the economic landscape.
According to Decision No 493/2005 issued by the Governor of the State Bank of Vietnam on April 22, 2005, bad debt in banking activities is defined in the context of debt classification, appropriation, and the use of provisions to address credit risk within credit institutions.
"Bad debts are those classified into group 3 (Non-standard debts), group 4 (Doubtful debts) and group 5 (Loans capable of losing capital)
Debt groups are classified under Article 6 and Article 7 in this Decision Include:
- Classification of debts under Article 6 is mainly based on the overdue period of debts (Group 3: overdue period from 90-180 days, Group 4: overdue from 181 -
360 days, Group 5: overdue is over 360 days)
Under Article 7, debts are classified primarily according to the repayment capability of customers Group 3 includes debts assessed by the Credit Institution (CI) as having the potential for partial recovery of principal and interest Group 4 consists of debts deemed by the CI to have a high likelihood of loss, while Group 5 encompasses debts evaluated by the CI as unrecoverable, resulting in an acceptance of capital loss.
According to the State Bank of Vietnam, bad debt is defined by two key factors: (i) debts that are overdue for more than 90 days and (ii) concerns regarding the borrower's ability to repay However, Vietnamese commercial banks may classify debts based on their own criteria, which are influenced by their capacity and the conditions outlined in Article 6 or Article 7 of the relevant decision.
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An increase in bad debt within a bank's loan portfolio can severely impact its operational processes A higher bad debt ratio indicates the limitations of financial institutions and affects their fund management capabilities Additionally, bad debt significantly undermines the bank's asset quality and leads to a distressing decline in income as irrecoverable debts expand.
Source: https://vietstock.vn Figure 3: NPL ratio of banks at the end of the third quarter of 2018
According to VP Bank's consolidated financial statements, consolidated bad debt has increased sharply from 3.4% at the end of 2017 to 4.7% at the end of the third quarter of 2018
The data presented in Figure 4 illustrates the monthly ratio of new non-performing loans (NPL) from 2017 to 2018, highlighting trends and fluctuations in loan performance during this period.
The table illustrates the percentage of new non-performing loans (NPL) in the retail segment from January to December for the years 2017 and 2018 The data indicates that, in most months, the new NPL rate for 2018 exceeded both the rate from 2017 and the target set for 2018.
In 2018, the analysis of the Non-Performing Loan (NPL) ratio by product reveals a significant concentration in unsecured products, particularly within the retail segment This high NPL rate in unsecured personal loans (UPL) and credit cards indicates a critical area that management must address to mitigate potential risks.
Problem indentification
Potential problem
The initial cause-effect map of the Risk Management Department illustrates the key relationships and factors influencing risk management processes This diagram serves as a foundational tool for understanding the dynamics within the department, highlighting critical areas for improvement and strategic focus.
In order to identify main problem of the department, following steps were executed:
- Take in-depth interview with some staffs in Risk Management Department to understand the symptoms and potential problems
- Review theories related to the symptoms and potential problems
By following above steps, some potential problems are listed as below:
3.1.2 Poor credit risk management policy
Financial institutions encounter various risks, with credit risk being one of the most prevalent This risk arises from changes in the credit quality of partners, impacting the profitability of institutions when customers default on payments Mitigating credit risk is challenging due to its inherent complexity and the fact that it is an integral part of credit activities Consequently, credit risk can be difficult to manage, often resulting in significant losses in both capital and income for banks.
Credit risk refers to the potential economic losses that commercial banks face when borrowers fail to repay their loans, including both principal and interest This risk can lead to significant financial repercussions, such as a decrease in net income and a decline in the market value of capital The Basel Committee on International Affairs provides a comprehensive definition of this critical financial concept.
Credit risk refers to the potential loss incurred when a borrower or partner fails to meet their financial obligations This risk is particularly relevant for foreign bank branches and can arise when customers are unable to fulfill part or all of their commitments.
Credit risk in banking operations is a systematic issue that can lead to significant damage, affecting not only the bank's profits, assets, and reputation but also impacting the entire banking system and the broader economy.
(2) stated that credit risk cause big impact on bank’s performance and influent directly on bank failure due to losses from bad loans
Effective credit risk management is essential for credit institutions to protect their investment capital This process involves identifying and analyzing risk factors, measuring risks, and implementing strategies to manage credit activities, thereby minimizing potential losses Proper credit risk management offers several benefits to banks, including reduced costs, improved income, and capital preservation Additionally, it fosters trust among depositors and investors, while also providing a foundation for market expansion and enhancing the bank's reputation and market share As noted by Viktar Fedaseyeu and Robert Hunt, robust credit risk management is crucial for improving the performance of commercial banks.
According to Ms Nguyen Hong Ngoc, the Retail Risk team leader, a credit policy is essential for managing the expansion or restriction of credit to meet objectives while minimizing risks in banking It enables banks to effectively target their loan portfolios and provides guidance to credit officers on necessary lending procedures However, VP Bank's retail segment faces challenges in credit risk management due to excessive credit expansion, leading to poorly selected customers and weak monitoring of loan usage Additionally, lax compliance with credit processes and staff weaknesses contribute to increased credit risk, negatively impacting the non-performing loan (NPL) rate.
3.1.3 Bad training skill in debt recovery and verification
As financial intermediaries, banks play a crucial role in mobilizing capital from depositors, providing loans, recovering debts, and repaying depositors with principal and interest This ongoing process is essential for the functioning of commercial banks; any disruption can hinder their ability to act as financial intermediaries Without effective capital mobilization, banks cannot lend, which complicates debt recovery, raises risk provisions, increases operational costs, and ultimately leads to higher lending interest rates.
Improving debt recovery efficiency at VP Bank is crucial for managers and regulatory agencies, as ineffective management can lead to prolonged capital appropriation, negatively impacting business turnover and profitability Like all banks, VP Bank prioritizes debt handling and recovery alongside its core business activities When customers face temporary difficulties in repaying debts, the bank collaborates with them to find solutions for gradual recovery However, in cases of serious contract violations or inability to implement remedial measures, the bank engages in clear discussions with customers to define the situation and encourage timely debt repayment, thereby minimizing additional losses.
The Collection Manager reported that the team's heavy workload requires each debt agent to contact a minimum of 200 customers daily Due to insufficient staffing, many new employees are compelled to engage in debt collection through calls or field visits after just two weeks of training.
Over a span of three days, Ms Vo Thi Sa Mi, a Senior Debt professional, received guidance from mentors Currently, her department lacks a dedicated team for training new staff and coaching existing employees.
The Collection Officer not only manages her daily responsibilities but also trains new staff on using the collection system and making customer payment calls She noted that her colleagues also assist in guiding newcomers, which significantly influences their own performance.
Credit verification is a crucial process for banks to identify and assess potential customers, ensuring high credit quality It involves using analytical tools to evaluate customers against specific credit criteria, leading to objective assessments that inform lending decisions The credit verification process in commercial banking includes several steps: reviewing customer loan histories, gathering additional information, assessing the ability to recover debts based on the collected data, estimating and managing credit risks, and ultimately concluding on the customer's debt recovery potential.
Ms Tran Thi Lien Oanh, the Verification team leader, revealed that a survey conducted at the end of 2018 involving nearly 2,000 customers with non-performing loans (NPLs) indicated that the highest reason for delinquency was the prevalence of fake income or business claims She emphasized that this finding highlights a significant weakness in the skills of the verification staff.
No Reasons for delinquency Ratio
Table 1 outlines the key reasons for the delinquency of non-performing loans (NPLs), highlighting factors that contribute to financial instability The analysis emphasizes the importance of understanding these causes to mitigate risks and improve loan management strategies.
Source: Verification Department – VP Bank
Problem validation
Credit policy is an overview of the bank's regulations on credit activities in order to provide orientation and guidance on the operations of bank in providing credit to customers
Ms Ngoc, responsible for setting credit policy in the retail segment, highlights that the high non-performing loan (NPL) rate is partly due to excessive credit expansion and poor customer selection She notes that the ability to monitor the use of weak loans is lacking, and compliance with the credit process is insufficient, exacerbated by staff weaknesses that increase credit risk While the current policy aligns with the bank's strategy, the main issue lies in the skills of verification and collection staff Enhancing staff skills is crucial for the bank to effectively identify problem loans and negotiate with customers, thereby preventing the escalation of debt issues.
Inadequate training in debt collection and verification can result in poor credit rating assessments, leading to unprofitable loan decisions and potential capital losses for banks It also hampers the ability to appraise collateral accurately and complicates the monitoring of customers' capital usage post-loan approval Ms Anh experienced significant challenges and poor performance during her initial months without training, highlighting its importance Ms Mi emphasized that strong skills enable collectors to address overdue loans early, preventing them from escalating into higher risk categories and ultimately protecting the bank from bad debt losses Mr Dong echoed this sentiment, noting that initial training boosts staff confidence, while a lack of it, as experienced by Ms Anh, can lead to poor performance and numerous work-related difficulties.
In conclusion, in-depth interviews reveal that inadequate training skills in debt recovery and verification processes within the Risk Management Department are significant factors contributing to the current non-performing loan (NPL) rate in the retail segment.
The importance of main problem
Training is a vital tool for improving individual skills, knowledge, and abilities, allowing employees to better understand various business aspects It also alleviates frustration and anxiety stemming from heavy workloads, ultimately boosting workplace productivity.
Orokov, Dan Durning, and Sergei Pushkarev emphasize that training should be job-focused, concentrating on the technical skills necessary for public employees to execute specific tasks They also highlight that isolated experiences may not lead to organizational success.
The Collection and Verification department must prioritize specialized training teams to enhance employee performance and reduce the NPL rate, ultimately protecting VP Bank's profits Effective training is crucial for boosting productivity, as noted by Wambugu Martha Karungari, who emphasizes that well-trained operatives can recover more debt Trained employees develop new skills and improve work efficiency, enabling them to identify fraudulent or high-risk loans, as highlighted by Ms Oanh This proactive approach can prevent future debt recovery challenges and mitigate the risk of bad debts Continuous internal training fosters a cohesive and loyal workforce, preparing staff for more challenging roles Therefore, addressing the issue of inadequate training in debt recovery is essential for improving the NPL rate within the Risk Management Department.
Cause justification
Possible causes
With previous analysis in addition with literature review, there are four potential causes of the main problem is updated in Cause-effect map of Risk Management Department at
Diagram 2: Updated Cause-effect map of Risk Management Department
Managers and staff in the Collection and Verification departments have noted a significant absence of training documents for new and current employees Training materials are crucial for effective skill development and management support Consequently, the lack of these resources has led to inadequate training for debt recovery and loan appraisal staff, highlighting the urgent need for comprehensive training materials in both departments.
4.1.2 No department specializing in training
According to the staff and managers at the Collection and Verification department, these two departments currently do not have a team specializing in skill training for employees
They often instruct experienced staff to guide new employees, this is known as on-job training
On-the-job training occurs in the actual workplace as employees perform their tasks, serving as a tool to enhance staff satisfaction However, varying knowledge and experience among trainers, along with time constraints, can render this method ineffective in certain departments.
According to Dev G Raheja, the human factor is crucial in organizational systems, significantly influencing the training process within businesses This factor encompasses not only trainers and trainees but also management staff The professional qualifications and capabilities of trainers are essential for successful training outcomes Conversely, unprofessional trainers with inadequate skills or varying experiences can adversely affect training quality Ultimately, the effectiveness of training hinges on the knowledge and skills of the trainers involved.
The verification department is designating senior staff with diverse skills and knowledge to train new employees, leading to a varied transfer of knowledge that directly affects staff performance Additionally, the training lacks a systematic approach, as the instructors often lack expertise in training, which restricts the effectiveness of the instruction and ultimately limits the training outcomes.
4.1.4 Lack of cost for training
Training is crucial for business success, as highlighted by Arshad Ahmad et al (10), yet many companies prioritize cost reduction, viewing training expenses as losses In today's integrated economy, improperly cutting training costs can lead to significant consequences (11), such as employees lacking necessary skills, decreased quality of work, increased turnover rates, and disruptions in business operations This ultimately results in higher costs for hiring experienced, highly qualified employees VP Bank exemplifies this issue, as certain departments have not prioritized employee training investments, leading to a lack of training teams, particularly in the Debt department.
Collection Center and Verification Department.
Validating causes
Employees in the Risk Management Department have highlighted the need for a dedicated training team within the Collection and Verification department, emphasizing the importance of knowledgeable instructors Ms Ngoc noted a lack of training for new staff and coaching for current employees during her business trip Additionally, Ms Mi and Ms Oanh pointed out that instead of a formal training team, senior staff are tasked with mentoring new hires for a few days, which limits comprehensive training and lacks a quality control team to assess performance and provide feedback Ms Anh, with a year of experience at VP Bank's Collection Center, shared that her manager assigned a senior staff member as her mentor to help her navigate the system and address customer inquiries Mr Dong stressed that initial training is crucial for building staff confidence in their roles.
Employees possess diverse backgrounds and skills, and without systematic knowledge at the start of their careers, they may adopt outdated practices As technology evolves and job market demands shift, companies must continuously retrain their staff to ensure they possess relevant skills Investing in professional training not only enhances employee efficiency but also boosts overall company performance A survey indicates that 40% of employees leave their jobs within the first year due to inadequate vocational training, leading to high turnover costs, including lost knowledge and wasted time To mitigate these issues, establishing a dedicated training team or partnering with external training providers is essential for Debt Collection Centers and Verification.
The professional qualifications of trainers play a crucial role in determining the quality of training If a trainer lacks professionalism or sufficient knowledge, it can negatively impact the training experience Therefore, having trainers with the right qualifications and skills is essential for ensuring high-quality training outcomes.
The lack of a dedicated training department and the inconsistent knowledge among instructors are identified as primary factors contributing to poor training skills within the department The final cause-effect map, based on the analysis of interviews and validations, will be presented below.
Diagram 3: Final Cause-effect map of Risk Management Department
Alternative solution and action plan
Solution 1: Propose to establish training team for Verification and Collection department
The Collection and Verification department currently lacks a well-prepared strategy for training and developing human resources, both in the short and long term, which aligns with their development goals Effective training not only equips employees with new skills and knowledge, enhancing their efficiency and job satisfaction, but also fosters motivation to improve performance When employees receive proper training, they develop confidence and work more independently; conversely, inadequate training can lead to dissatisfaction and increased turnover Therefore, addressing training needs is both essential and practical for organizational success.
In conclusion, to address the two primary factors contributing to inadequate training skills, the Collection and Verification department should create a dedicated training team or conduct training sessions for key personnel prior to onboarding new employees I propose three solutions to help the Collection and Verification department effectively tackle this issue, with the main recommendation being the establishment of a specialized training team.
Verification and Collection department which can help these departments solve the problem in the long term
5.1 Solution 1: Propose to establish training team for Verification and Collection department
Hiring skilled individuals is just the first step; companies must also invest in support and training to enhance their employees' skills and ensure high-quality work Unfortunately, many departments overlook the necessity of structured training plans due to limited resources and competing priorities This neglect not only results in a workforce lacking essential professional skills but also adversely affects the mental well-being of new employees Many individuals who start without adequate training experience poor performance and may even face depression, leading to early job resignations as they struggle to keep up with their responsibilities.
The Collection and Verification departments at VP Bank currently lack a dedicated team for employee skill training, relying instead on experienced staff to mentor new hires This approach has proven ineffective, as many employees have noted that senior staff possess varying levels of skills and knowledge Consequently, it takes them 2-3 days to provide basic training to new employees, which negatively impacts the overall quality of training.
Training is crucial for the survival and growth of organizations, enabling staff to adapt to environmental changes and fulfill strategic goals It also addresses the developmental needs of employees, ensuring their basic requirements are met When staff feel acknowledged and supported, their motivation and efficiency in the workplace significantly increase.
Training is also a lucrative investment activity, because human resource development and training are the powerful means to achieve the most effective organizational development
Training will bring the following practical benefits:
+ Helping company improve labor productivity and business efficiency Maintaining and improving the quality of human resources, creating competitive advantages for businesses;
+ Solve organizational problems Training and development can help administrators solve issues of conflict, set policies on human resource management effectively;
A comprehensive guide for new employees is essential, as they often encounter various challenges and surprises during their initial days in an organization Implementing work-oriented programs can significantly aid in their swift adaptation to the new corporate environment.
+ Training and development helps employees acquire the necessary skills for promotion and replacement opportunities for managers and professionals when needed;
Enhancing organizational stability is crucial, as it ensures that the company remains unaffected by personnel changes and shifts in the production and business environment By investing in training, the organization builds a reserve of skilled and professional human resources, effectively preparing them to meet the demands of new circumstances.
+ Reduce the cost of management and supervision: Trained workers will understand and stick with the work with the organization, thus reducing the requirements and costs of supervision and management
+ Create professionalism and attachment between employees and company;
+ Directly helps employees perform better jobs, especially when employees perform jobs that do not meet standards, or when employees receive new jobs;
Updating employees' skills and knowledge is essential for successfully implementing technological and technical changes.
To meet employees' development needs and aspirations, it is essential to equip them with the necessary professional skills This investment not only stimulates better job performance but also encourages employees to pursue greater achievements and seek more challenging tasks, ultimately leading to enhanced advancement opportunities.
+ Create for employees a new way of thinking in their work, which is also the basis for promoting the creativity of employees in their work;
+ Improving the quality of work performance;
+ Increase the adaptability of employees in organization;
+ Expanding the ability to cooperate in work;
Acknowledging the lack of a specialized training team within the department, managers are considering several key steps to address this issue.
1 Raise current difficulties/ obstacle and get feedback from staff
Make high level managers understand about the difficulties of department
List out problems and difficulties of departments when there is no professional training team
Holding a meeting to discuss with all staffs to get feedback from them on current training program and gathering all information from staffs
2 Propose establish training team with specific plan and estimated cost
In order to clear the role of each department, action plan and cost to strengthen the proposal
Prepare a proposal for a plan to establish a specialized training room for Collection and Verification department, send HR to review and comment
HR of the bank will
Clear key responsibilities of employees to promote work
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Effective resource management is essential for developing a comprehensive course outline that equips internal trainers with the necessary knowledge and skills This ensures that they can implement tasks according to established criteria.
4 Seek approval from higher level manager
The HR department head creates a comprehensive training plan that includes details on the subjects to be trained, training content, methods, timing, location, and responsible individuals or units This plan is then submitted to the Director and Head of the Training Department for approval and signature.
Managers can download the latest full thesis documents and training notes at the provided email address The thesis includes specific details and attachments for comprehensive understanding.
5 Implement Implement base on proposal
Once approved, the training plan will be implemented
After implementing training programs, it is essential to evaluate the results to determine their effectiveness This evaluation provides the department with a foundation to either support ongoing training initiatives or explore alternative strategies Additionally, it serves as an opportunity to assess the staff's learning capabilities.
The person in charge of training summarizes the training results and submits to the board of directors and a meeting to review training lessons
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Solution 2: Build internal training program
Many businesses underestimate the importance of a formal internal training program, believing that on-the-job training for new employees over a few days is sufficient However, internal training is a long-term strategy essential for developing a skilled and cohesive team.
Participants in the training program include: new recruits, working staff and manager at all levels
Managers recognize the significant advantages of internal training, as companies with a robust training culture and comprehensive personnel development plans tend to operate more efficiently An effective internal training program not only boosts the productivity of current employees but also prepares the organization to meet future human resource needs.
Training and development of human resources is an essential activity for businesses
Implementing this activity demands significant resources, including time and effort, making it essential to develop a strategic plan Without scientific methods, the program risks wasting both time and money Below is an action plan that managers of the Collection and Verification department should consider.
To identify the target destination for businesses and assess employee training needs, a training needs assessment is essential This process involves gathering and analyzing information to clarify performance improvement requirements and evaluate whether training is a viable solution.
Conduct meeting/ brainstorm sessions between managers, staffs
Develop a detailed, specific and easy training program to
Managers tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg implement and measure, include:
3 Implement Implement training program base on plan
4 Review and modify training program
Compare the performance of employees before and after training to determine whether the training program meets the training objectives
Collect feedback from all stakeholders to determine the effectiveness of the program and what the trainer has conveyed (including knowledge or skills that employees have received)
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Solution 3: Hire external partners to train staffs of Collection and Verification department
The effectiveness of training and development in human resources is significantly influenced by the qualifications of trainers Therefore, companies must carefully select trainers from various sources, including external organizations or by inviting training experts It is essential for trainers to possess extensive knowledge, relevant experience, and an understanding of the organization's context, strategies, and training methodologies.
The Verification and Collection Department is implementing on-board training by utilizing experienced staff to mentor new employees This approach offers several advantages, including regular and continuous training, effective use of internal resources, and flexibility to adapt to departmental strategy changes Additionally, it simplifies organization and reduces associated costs By pairing highly qualified staff with less experienced employees, the latter can acquire new skills and gain confidence in problem-solving For seasoned employees, mentoring serves as a validation of their expertise and enhances their sense of management responsibility.
Instructors often lack pedagogical knowledge in training, resulting in unscientific instruction that hinders new staff from effectively learning and absorbing bad habits When faced with challenges, new employees tend to rely on their instructors for answers, which limits their learning opportunities Additionally, fear of asking questions and a lack of proactive training from instructors contribute to the overall ineffectiveness of this training approach.
Instructors may perceive new staff as a potential threat to their job security, leading to a lack of enthusiasm in providing guidance Additionally, the training process can disrupt the instructors' daily responsibilities.
The Verification and Collection Department can enhance workforce efficiency by organizing targeted training programs through professional vendors This approach ensures that businesses have a team of qualified trainers, equipping employees with uniform skills that establish consistent work standards When all employees receive the same training, it increases their ability to perform tasks uniformly, fostering teamwork and collaboration Ultimately, these training courses promote a cohesive work environment and strengthen team spirit.
Evaluating training enables the Bank to measure staff capabilities and professional skills both before and after the training process This assessment helps identify areas for improvement in training courses, aligning them with the Bank's objectives and business strategies.
Evaluating the effectiveness of training and development is a crucial stage in the training process.
1 Analyze the need of of training
The initial phase of a training process involves precisely identifying the training needs of human resources Recognizing these needs is crucial, as it directly influences the subsequent steps in the training process.
Training needs are usually determined from the company's business plans and human resource plans, based on which determine the
Employee analysis involves evaluating individual records to gather information about their qualifications, abilities, and skills, ensuring they meet the minimum job requirements.
Next is analyzing the performance results to see the level of their work completion, what skills are missing? What skills should be added to them
Organizational analysis is essential for identifying the training and development needs of a company to align with job requirements and strategic goals By assessing the organization's current performance over a specific period, we can gain a comprehensive understanding of its strengths and weaknesses This insight allows for targeted improvements through training initiatives, ultimately supporting the business's future development objectives.
Third, analyze the requirements of the job:
Analyzing the work based on the job description, the standard version
The standard version of the job assessment tool effectively identifies employees who require training, enabling businesses to target their development efforts efficiently.
2 Learn about capabilities of outsource companies
Learn about skills and knowledge needed to achieve strategic objectives of training program
Select companies that match goals and budget of department
4 Cooperate with outsource company to develop training program
In this step, partners and trainers develop practical situations used in the program, exercises, cases study and structure of training material
5 Seek approval from higher level manager
The Head of the HR department collaborates with the Managers of the Collection and Verification Department to create a comprehensive plan, which is then submitted to the Director and the Head of the Training Department for approval and signing.
Evaluating the effectiveness of a training program is essential after each course, focusing on both quantity and quality This evaluation is based on specific criteria, primarily assessing changes in productivity, quality, and labor efficiency compared to pre-training levels.
Monitoring and evaluating training programs is essential to assess the changes in knowledge and skills of staff after training The effectiveness of these programs is often reflected in the improvement of work performance.
Supporting information
My name is Phan Ngoc Thuy Duong from the Retail Risk Management Department at VP Bank Thank you for your time; this interview will take approximately 15-20 minutes Upon reviewing the financial reports, I noticed that the NPL rate in the retail segment for 2018 is higher than in previous months and exceeds our target I would like to ask you some questions to gain a deeper understanding of this situation I will be taking notes to ensure I capture all the information you share Thank you for your understanding and support.
1 Le Viet Thu Female Collection Manager 10 5 Mar-2019 VPB
2 Vo Thi Sa Mi Female Senior Debt Collection Officer 5 4 Mar-2019 VPB
3 Pham Thi Hoang Anh Female Debt Collection Officer 2 1 Mar-2019 VPB
4 Nguyen Hong Ngoc Female Retail Risk Team Leader 4 3 Mar-2019 VPB
5 Hoang Ho Nhu Quynh Female Senior Retail Risk Officer 2 2 Mar-2019 VPB
6 Tran Thi Lien Oanh Female Verification Team Leader 5 5 Mar-2019 VPB
Pham Dinh Le Dong is a male verification officer who graduated in March 2019 from VPB He is associated with the latest updates and resources related to academic theses and master's degree research For further inquiries, he can be contacted via his Gmail account.
- What is your name and your job position?
- How long have you worked at VP Bank?
- What’s your main responsibility in work?
- In your opinion, which factors that might affect to high NPL rate in retail segment?
- What is the main factor? Why do you think so?
- Do your department have team specializing in training?
- Do you think your job should require training or not?
- Do you think skill training will impact to the performance of staff in your team?
Questions and answers Coding Category
What is your name and your job position?
Ms Thu: My name is Le Viet Thu - Collection Manager
Ms Mi: My name is Vo Thi Sa Mi - Senior Debt Collection Officer
Ms Anh: My name is Pham Thi Hoang Anh - Debt Collection Officer
Ms Ngoc: My name is Nguyen Hong Ngoc - Retail Risk Team Leader
Ms Quynh: My name is Hoang Ho Nhu Quynh - Senior Retail Risk Officer
Ms Oanh: My name is Tran Thi Lien Oanh - Senior Verification Officer
Mr Dong: My name is Pham Dinh Le Dong -Verification Officer
Collection Manager Senior Debt Collection Officer Debt Collection Officer
Retail Risk Team Leader Senior Retail Risk Officer Senior Verification Officer Verification Officer
How long have you worked at VP Bank?
Employees’ tenure tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
What’s your main responsibility in work?
Ms Thu: Generally, my job is management overdue loan portfolio
Ms Mi oversees the allocation of new overdue loans to her team, providing support to staff in handling challenging customer interactions and mentoring new employees on effective work practices.
Ms Anh: My daily task is call overdue customers for their payment
Ms Ngoc: My task is setting credit policy for retail segment, ensures that the strategic objectives of the organization are fulfilled
Ms Quynh: My task is answering questions for business units in terms of credit policies
Ms Oanh is responsible for approving, rejecting, or coordinating the approval or rejection of lines of credit and personal loans Additionally, she provides training for new staff and offers guidance in their work.
Mr Dong: My task is verifying customers’ application to make decision of approve or reject a retail loan
Job description tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
In your opinion, which factors that might affect to high NPL rate in retail segment?
Ms Thu stated that the high non-performing loan (NPL) rate is primarily attributed to ineffective debt recovery skills Additionally, certain loans are affected by their inherent nature, such as instances where customers are confirmed to be involved in fraud, making recovery impossible.
Ms Ngoc believes that the high non-performing loan (NPL) rate in the retail segment is partly due to excessive credit expansion, which results in poorly selected customers and inadequate monitoring of weak loans She points out that lax compliance with credit processes, along with staff weaknesses, significantly contributes to the rising credit risk.
Ms Oanh: I think poor verification skill and lacking of skill in handle overdue loan in early stage that make the loan move to higher cycles and become bad debt
Excessive credit expansion Compliance with the credit process is loose
Poor verification skill and lacking of skill in handle overdue loan
Factors affect to NPL rate in retail segment
What is the main factor? Why do you think so?
Ms Thu believes that the skills of collection staff are the primary factor contributing to overdue loans becoming non-performing loans (NPLs), while the proportion of fraudulent customers is not significant enough to substantially affect the NPL rate.
Ms Ngoc emphasized that our policy aligns with the bank's strategy, highlighting the crucial role of verification and collection staff skills in identifying problematic loans.
Skill of verification and collection staffs
The main factors affecting the Non-Performing Loan (NPL) rate include effective negotiation with customers to prevent the transfer of debts into higher risk categories It is crucial to address these issues to maintain financial stability and reduce the likelihood of loan defaults.
During my recent business trip, I noticed that many new employees began working just 2-3 days after their training, raising concerns about their limited knowledge Additionally, there appears to be a lack of a dedicated training team to support new hires and provide ongoing coaching for existing staff.
Ms Oanh emphasizes that the high non-performing loan (NPL) rate is primarily due to the inadequate skills of verification staff Their inability to properly assess loan justifications often results in the approval of risky loans, consequently heightening credit risk.
Don’t have training team Skill of verification staffs
Do your department have team specializing in training?
Ms Mi: No, currently we don’t have For new staff, senior staff will spend
To effectively manage overdue customers, it is essential to provide staff with 2-3 days of training focused on basic knowledge and skills However, the varying levels of expertise among staff can impact the overall quality of this training Additionally, the lack of adequate resources further complicates the training process.
Quality Control (QC) team evaluate collectors’ performance in order to give prompt feedback on their performance and conduct coaching.
Ms Oanh: No, we assigned senior staffs to train for junior one
Ms Anh: No, when I started work at Collection Center of VP Bank, 1 year ago, my manager assigned a senior staff to become my mentor to support me
No training team, senior staffs attach and guide new staffs
Assigned senior staffs to train for junior one
Assigned a senior staff to guide
Our team specializes in training and providing the latest resources for graduate thesis projects We offer comprehensive guidance on utilizing our system effectively and addressing inquiries related to managing overdue customers.
Do you think your job should require training or not?
Ms Mi: Yes, with the nature of work that usually interact with customer to convince them pay their debt, if funding condition allow, I think we should have
Ms Oanh: Yes, If staff have not had the training, both staff and the bank will suffer from poorer performance
Ms Anh acknowledges that she faced significant challenges when she began her career, resulting in poor performance during her initial months She emphasizes the crucial role of training in enhancing her job skills and overall effectiveness.
Mr Dong: I have the same idea with Ms Anh Besides, I think training in very first steps make staffs more confident in work
If staff have not had the training, both staff and the bank will suffer from poorer performance
Training in very first steps make staffs more confident in work
The need of having training
Do you think skill training will impact to the performance of staff in your team? And how?
Strong skills in collections enable collectors to effectively resolve overdue loans at early stages, preventing accounts from escalating to higher risk categories that lead to bad debt This not only helps them achieve their targets but also protects the bank from potential losses associated with bad loans.
With strong skills, achieve their target and also save the bank from loss of bad loans