The proposed research model includes 6 factors affecting individual customer satisfaction with the quality of loan services at BIDV NKKN including 1 Tangible, 2 Responsiveness, 3 Reliabi
INTRODUCTION
The purpose of research
Vietnam's economy has been making positive changes as it has increasingly developed and integrated with the world in recent years Along with that, people's spiritual and material lives have gradually improved and enhanced, and people's needs are becoming increasingly rich and diverse We all understand that needs are limitless, but not everyone can afford to pay for their needs immediately, so borrowing to serve urgent current purposes is the optimal solution for everyone The level of competition among Vietnamese commercial banks is becoming increasingly fierce, requiring banks that want to continue to develop in the market to constantly improve their operational efficiency, and at the same time, must always find new directions suitable to the conditions and needs of the people, and the factor of service quality is increasingly playing a necessary role in the development of commercial banks
In recent years, business activities in the banking sector towards product diversification with a focus on retail activities have become a trend not only for private banks but also for state-owned banks This is the development strategy of many banks with the desire to diversify revenue sources, minimize operational risks and achieve optimal business efficiency In fact, with a large number of customers, a lot of potential and accounting for the majority of the total number of customers that banks lend to, individual customers have brought banks many benefits in terms of income and risk dispersion, creating a solid foundation for the bank Currently in Vietnam, the average income per capita is at an average level and is growing steadily, showing that the individual customer market is a large market with a lot of potential for banks to exploit Meeting the diverse financial needs of customers not only helps banks grow sustainably but also contributes to promoting socio-economic development Therefore, building relationships with individual customers is of great significance to the operations of commercial banks
Established in 1957, Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) is the oldest commercial bank in Vietnam with a long history in the banking sector Grasping the current market, Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) in general and BIDV NKKN Branch in particular are constantly developing and promoting lending activities to individual customers This is a method to create conditions for current customers and attract potential customers in the future to satisfy their needs promptly and quickly In addition to being a stepping stone to help customers improve their individual lives, consumer lending is also an activity that brings a lot of profit to the bank, contributing to promoting and firmly consolidating BIDV's position in the banking industry through all different economic cycles With a stable growth rate, BIDV NKKN is a medium-sized retail bank branch, the frequency of transactions with individual customers accounts for the majority of all branch operations According to the most recent operational report of BIDV NKKN branch in 2023, loan services to individual customers contribute significantly to BIDV NKKN's profits This has brought positive results but also posed risks to the bank's development In the past, lending activities to individual customers were increasingly expanded, but the quality was still not as high as the set target due to the complicated bad debt situation
In recent years, although bad debts from the bank's lending activities to individual customers have tended to decrease, the severity and consequences of credit risks are still a major concern for the branch The difficult situation of the branch often arises from bad loans, especially the risks when performing lending operations for individual customers Therefore, the issue of the quality of bank loan services is always of concern and improving this is also an objective requirement, deciding the existence and development of the bank branch And for the group of individual customers, satisfaction has a great impact on their decision to use the service Moreover, studying the satisfaction of individual customers with consumer loan services will help bring loyalty and develop the business of loan services to individual customers
Recognizing the importance of the problem, the author decided to choose the topic
"Factors affecting individual customer satisfaction with the quality of loan services at
Joint Stock Commercial Bank for Investment and Development of Vietnam - Nam Ky Khoi Nghia Branch" with the aim of finding out the factors and their level of impact on individual customer satisfaction with the quality of loan services at BIDV NKKN Thereby, recommendations are made to help bank management have strategic directions to improve the quality of loan services for individual customers at branches.
Research objectives
The research topic identifies and measures the level of impact of factors affecting individual customer satisfaction with the quality of BIDV NKKN's loan services Since then, the study recommendation management implications to improve the quality of personal loan services at BIDV NKKN branch
Based on the above general research objective, the project identifies specific research objectives as follows:
Firstly, identify the factors affecting the satisfaction of individual customers with BIDV NKKN's loan services quality
Secondly, measure the level of impact of the factors affecting the satisfaction of individual customers with BIDV NKKN's loan services quality
Thirdly, recommendation management implications to improve the quality of personal loan services at BIDV NKKN branch, thereby attracting more potential customers.
Research questions
In order to achieve the specific research objectives mentioned above, the study is carried out with the following questions:
Firstly, what factors affect individual customer satisfaction with the quality of loan services at BIDV Nam Ky Khoi Nghia branch?
Secondly, how do these factors affect individual customer satisfaction with BIDV NKKN's loan service quality?
Thirdly, what management implications are recommendation to improve the quality of personal loan services at BIDV NKKN branch?
Research subject and scope
The research object is the factors affecting individual customer satisfaction with commercial bank loan services
Spatial scope: Joint Stock Commercial Bank for Investment and Development of
Vietnam - Nam Ky Khoi Nghia Branch
Survey subjects: Individual customers who have been using loan services at Joint stock Commercial Bank for Investment and Development of Viet Nam – Nam Ky Khoi Nghia Branch
Time scope: The survey period is expected to be from February 10, 2025 to March 1,
2025 In addition, secondary data of individual customers using personal loan services be collected from 2022 to 2024.
Research methodology
In order to achieve the above objectives, the author applies both qualitative and quantitative research methods In which, the main research method is the quantitative method to solve the research objectives
Qualitative research method: Based on previous domestic and foreign research documents on factors affecting customer satisfaction and practical application at BIDV NKKN branch Descriptive statistics, analysis, comparison, synthesis, and evaluation are performed to systematize the theoretical basis of factors affecting individual customer satisfaction with the quality of loan services at commercial banks in chapter 2, to build, edit and supplement the model scales in chapter 3, and at the same time conclude the research results in chapter 4 and give implications in chapter 5
Quantitative research method: Conducted by sending survey forms to customers who have used and are using loan services at BIDV NKKN branch The questionnaire is sent to customers through direct survey Specifically, the author will create a survey in the form of a paper survey, then send it to individual customers who have borrowed capital in the bank's available information data and ask colleagues at the branch to send the survey to customers Customers will answer the questionnaire themselves, the survey results will be synthesized and analyzed using Excel 2016 software Next, through SPSS 20.0 software, the author will process the data such as testing the scale and analyzing the results through the Cronbach's Alpha reliability coefficient, EFA exploratory factor analysis to reduce the observed variables and redefine the groups in the research model, regression analysis to examine the level of impact of factors affecting the satisfaction of individual customers with BIDV NKKN's loan services Finally, t-test and ANOVA tests are performed to compare the differences in the level of impact on satisfaction.
Contributions of the study
In terms of theory: The study contributes to verifying, supplementing opinions and enriching the theoretical basis of individual customer satisfaction with the quality of loan services at BIDV NKKN branch At the same time, the study will be a reference source for subsequent studies
In terms of practice: The survey study on individual customer satisfaction with loan services of Joint Stock Commercial Bank for Investment and Development of Vietnam - Nam
Ky Khoi Nghia branch is a practical study The study helps to evaluate customer satisfaction with the quality of loan services at the bank, thereby suggesting useful information for bank administrators to come up with practical solutions to serve the service well, increase customer satisfaction with individual loan services, contribute to creating trust in the brand, creating more prestige for the bank and attracting potential customers.
Research structure
Chapter 1 Introduction In the first chapter, the author presents the reasons for choosing the topic, the objectives and research questions, and the scope and objects of the
10 research Next, an overview of the research method and the contributions of the study in terms of academics and practice is presented The final part is the thesis structure to serve as a foundation for the following chapters
Chapter 2 Theoretical basis and research overview In this chapter, the author will provide an overview of definition and theoretical framework of individual customer loan, and customer satisfaction with the quality of services provided Along with that, an overview of previous studies is presented to identify research gaps with the aim of building a research model in chapter 3
Chapter 3 Research methodology Based on the foundation of chapter 2, the thesis will present in detail the basis for proposing the research model and the proposed model, describe the variables in the model and how to measure them to propose hypotheses that are suitable for the specific nature of the variables At the same time, demonstrate the research design method including: determining the research sample size, sampling method, data collection, analysis, processing methods and the basis for evaluating the results of the method and the sequence of implementing econometrics for the research model
Chapter 4 Research results In this chapter, the thesis analyzes the research results through reliability tests, exploratory factor analysis, correlation and regression analysis, ANOVA analysis of differences The author presents and discusses the impact of variables based on the research results
Chapter 5 Conclusion and proposes some implications In this chapter, the author synthesizes the research results from chapter 4 Based on the conclusions, the author proposes implications to increase individual customer satisfaction and attract more customers to use loan products and services at BIDV NKKN branch Then, the limitations of the study are presented as a premise for the author's next research direction
In the first chapter, the author emphasizes the importance of studying the impact of factors affecting individual customer satisfaction on the quality of loan services at Joint stock Commercial Bank for Investment and Development of Viet Nam – Nam Ky Khoi Nghia Branch and introduces studies related to this topic to have an overview of the research context Based on the general research objectives, specific research objectives are set and will be addressed through corresponding research questions Next, the study focuses on individual customers in the time range from 2022 to 2024 and uses linear regression analysis to regress the model, mainly based on previous studies Thereby, the author expresses the expectations for the study to be able to develop the research treasure shown in the research contribution section The final part introduces the structure of the entire study including 05 chapters and the content mentioned in each chapter
THEORETICAL BASIS AND LITERATURE REVIEW
Overview of personal loans at commercial banks
According to the State Bank (2016) in Article 1 of Circular 12/2024/TT-NHNN defines “Lending is a form of credit extension through which a credit institution assigns, or commits to give customers a sum of money to be used for a specified purpose, within a certain period of time, on the principle of full refund of principal and interest as agreed upon to the credit institution”
According to Phan Thi Thu Ha (2014), lending is the provision of money by banks to customers with the commitment that customers must repay both principal and interest within a specified period of time The Bank can borrow in cash or by bank transfer, the money can be transferred to the customer's account or the seller's account for the customer
Individual customers in bank are those who are eligible to borrow, have a need to borrow capital for production and business or personal consumption They do not represent any organization or business In other words, they do not purchase or use the products/services for commercial purposes or work in a professional capacity (Kotler & Keller, 2016)
In summary, individual customers lending is a common financial process that banks provide to individuals to serve their personal consumption or investment needs This form allows customers to borrow a sum of money for personal use within a certain period of time based on the principle of repaying both principal and interest on time
According to Bui Dieu Anh, Ho Dieu & Le Thi Hiep Thuong (2011), compared to loans from businesses, the size of personal loans is smaller, but the number of personal loans is very large With the main purpose of borrowing for consumption and due to the value of goods as well as the moderate consumption level of customers, the value of loans is often not
13 large Moreover, the demand of personal loan customers for luxury goods is not high and most of them have been more proactively prepared with large assets However, personal credit loans are a fairly common, diverse and regular borrowing need for all classes of people, so the number of loans will be large, making the total scale of personal loans of large banks
Interest rates for personal loans are often higher and less flexible than those for other loans Due to the relatively small scale of individual loans, yet the substantial operational costs incurred by commercial banks (including human and material resources) for customer acquisition, documentation, credit appraisal, approval, and loan management, etc banks are often compelled to apply higher interest rates to offset these expenses (Phan Thi Thu Ha,
Unlike most other loans, interest rates for personal loans are often fixed or changed over a longer period Interest rates for short-term loans are usually fixed initially and remain stable throughout the loan term In contrast, interest rates for long-term loans are often more flexible and can be adjusted according to market fluctuations or according to agreements between the bank and the customer On the other hand, individual customers are often less sensitive to interest rates than corporate customers because they borrow on a smaller scale and are less sensitive to interest rates
The demand for loans is often for individual customers, often for spending and consumption purposes such as buying a house, buying a car, studying abroad or financing personal and family businesses These needs are mostly characterized by only occurring in a short period of time on a small scale Based on the characteristics of capital needs, bank loans to individual customers are often short-term and medium-term loans
According to to the State Bank (2023) in Article 27 of Circular 06/2023/TT-NHNN, Credit Institutions agree with customers to apply the following lending methods:
Lending by installments: means that each time a loan is borrowed, the customer and the bank must complete the necessary procedures and sign a credit contract Accordingly, each credit contract can be disbursed one or more times, depending on the customer's capital needs, however, the total amount on the debt receipt must not exceed the amount signed in the credit contract This form is applied to customers who have a one-time need, or customers who borrow capital infrequently
Lending by credit limit: means that in this form, the bank and the customer determine a credit limit that does not change within a certain period of time depending on the income level or business production cycle During this period, the customer can proactively withdraw capital within the allowed limit and is not limited to the total amount previously disbursed This form is applied to customers who borrow capital regularly or depend heavily on the production and business process
According to the State Bank (2016) in Article 8 of Circular 39/2016/TT-NHNN, the definition is “Loan term means a period of time counted from the day following the day on which a credit institution disburses a loan to its client to the point of time the latter has to fully repay the loan principal and interest as agreed upon between the credit institution and the customer”
Short-term loan: are loans with a term of up to 12 months The main purpose of this loan is to supplement the lack of working capital of individuals and organizations or for short- term consumption
Medium-term loan: are loans with a term of over 12 months to 60 months The main purpose of this loan is to finance investment in fixed assets, improve or innovate
15 technological equipment, help increase production or business activities, and use it for new projects with small scale and quick capital recovery time
Long-term loans: is a form of loan where the loan term is over 60 months or more
These long-term loans are intended to meet similar needs as medium-term loans, but have a longer term, such as building houses, large-scale equipment and vehicles, or building new factories
Unsecured loans: are loans that do not require the borrower to provide personal assets or third-party assets to secure the loan, the loan is based only on the feasible loan plan, the reputation of the customer or guarantor
Overview of customer satisfaction with the quality of services provided
Customer satisfaction is defined by the consumer’s fulfillment response It is a judgment that the product or service provides a pleasurable level of consumption-related fulfillment, including levels of under- or over fulfillment (Oliver, 1997)
According to Kotler and Keller (2006), satisfaction is the feeling that a person gets when comparing what they expect from a product or service Accordingly, satisfaction is divided into three levels of perception:
(1) Dissatisfied: If customer perception is less than expectation;
(2) Satisfied: If perception is equal to expectation;
(3) Very satisfied or delighted: When perception is greater than expectation
According to Parasuraman, Zeithaml, and Berry (1988), it is the emotion generated by comparing the actual experience and initial expectations or the quality of the product or service that the customer receives with the quality they expect
In summary, the definition of customer satisfaction is the degree of gap between the customer's expectations and the reality of the service
In fact, definition of service quality is quite abstract This abstraction is created by the intangible nature of the service However, there are currently many approaches According to TCVN ISO 9000:2015, "Service quality is a set of characteristics of an object that enable the object to satisfy stated or implied requirements"
Service quality is studied on two main factors: technical quality which relates to the products or services provided, while functional quality refers to the way the service is provided (Gronroos, 1984)
Meanwhile, Cronin and Taylor (1994) argue that customer satisfaction is often considered through immediate feedback to express their initial feelings and judgments, while service quality often reflects the degree to which needs and expectations are met during the service process In addition, service quality is also the degree to which a particular service meets the needs or expectations of customers
2.2.2.2 Quality of personal loan services at commercial banks
The quality of personal loan services is a measure of the bank's effectiveness in supporting the development of the economy, demonstrating the bank's adaptation to changes in the market and business environment, and demonstrating the bank's competitive strength in the development process (Do Thi Giang, 2021)
The personal loan service of a commercial bank is considered to be of quality when it optimally resolves the requests of related parties The quality of personal loan services is created and guaranteed by both the customer and the bank
For customers: The quality of personal loan services is reflected in the provision of loan packages that are suitable for the business goals and financial capabilities of each customer, along with reasonable interest rates and terms
For commercial banks: The quality of personal loan services is assessed through the scope and credit level, the competitiveness of the loan package, as well as the transparency of the contract terms and the commitment to repay on time
Therefore, to have good quality personal loan services, personal loan activities must be effective and credit relationships must be created on the basis of trust and operational reputation
In summary, the quality of a bank's personal loan service is evaluated by its ability to meet customer's loan requests, promote socio-economic growth and ensure the bank's
19 stability and growth Commercial banks need to grasp the influencing factors and apply them creatively in specific circumstances to positively change the quality of banking services
2.2.3 Relationship between service quality and customer satisfaction
The relationship between service quality and customer satisfaction is a key issue in most customer satisfaction studies and has been the subject of discussion by many researchers over the past decades The relationship between service quality and customer satisfaction has been controversial While some people consider the two concepts interchangeable, most studies have shown that they are two separate concepts
Cronin and Taylor (1994) examined this relationship and concluded that service quality and customer satisfaction are two different but closely related definitions in service studies, suggesting that service quality leads to satisfaction, since service quality represents the delivery of the service while satisfaction is only assessed after the customer has used the service
Customer satisfaction reflects the overall feelings of customers after experiencing a service, and service quality focuses on the specific elements that make up that experience (Zeithaml and Bitner, 2000) In the study of Spreng and Mackoy (1996), it was also shown that service quality is the premise for creating customer satisfaction
In summary, service quality is the most important premise for building customer satisfaction Specifically, when a service provider provides a service that fully meets and exceeds customer’s expectations, they will feel satisfied and have sympathy for the business Therefore, to improve the positivity in customer satisfaction, businesses need to improve service quality In other words, service quality is a solid foundation for building customer satisfaction, in which service quality is what is created by the provider first and satisfaction is the result
Figure 2.1 Model of the relationship between customer satisfaction and service quality
2.2.4 Research models for measuring service quality
The SERVQUAL service quality model was developed and implemented by American marketing experts Parasuraman Parasuraman Zeithaml, and Berry in 1988 Initially, the model was used in the development of manufacturing systems Over time, businesses began to pay attention and use SERVQUAL to improve the quality of related services Companies believe that trying to improve service quality can give them a competitive advantage and retain customers effectively Other studies have also used and developed the SERVQUAL model as the basis of their research This tool was initially identified as consisting of 10 components of service quality including: (1) Reliability; (2) Service delivery competence; (3) Courtesy; (4) Accessibility; (5) Tangibles; (6) Communication; (7) Credibility; (8) Security; (9) Responsiveness; (10) Understanding
Then, in a more in-depth study, Parasuraman et al (1988) consolidated these 10 components into 5 different factors:
(1) Reliability is demonstrated by the ability to perform the service consistently, accurately, and as promised to the customer, not only the first time but also in every transaction
(2) Tangibles include what the customer can see and feel when receiving the service, from the appearance of the staff, equipment, facilities to related documents
Literature review
Le Duc Toan and Tran Thi Chau Ha (2020) studied the factors affecting customer satisfaction with the service quality of consumer loans at Saigon Commercial Joint Stock Bank - Da Nang Branch The author developed a model including the dependent variable of satisfaction when using the service and 6 independent variables including: tangible, assurance, reliability, empathy, convenience and price The study surveyed 350 customers who had taken out consumer loans at the branch from July to October 2018 and had 306 valid results used, then tested the reliability of the scale using Cronbach's Alpha reliability coefficient and EFA exploratory factor analysis showed that there was no need to calibrate the model and kept the original 6 hypotheses After conducting ANOVA analysis of variance
24 and regression model analysis, the conclusion was drawn about 6 factors affecting customer satisfaction with the quality of consumer loan services of the branch: tangible, assurance, reliability, empathy, convenience and financial benefits
Based on theoretical foundations, previous studies and expert surveys, Le Trung Hieu and Nguyen Le Thua Bang (2021) conducted a study on customer satisfaction with consumer loan services at Sacombank Tra Vinh Inheriting, building and perfecting the previous questionnaire, the research team conducted a survey of 150 customers depositing money at the bank using a convenient sampling method After being collected, the data was coded, entered and cleaned using SPSS software Next, the research team conducted testing and analysis to solve the research objectives through methods such as: Cronbach's Alpha method, EFA factor analysis, correlation analysis and multivariate regression analysis Based on the regression model results, it can be seen that the Tangibles factor has the strongest impact on customer satisfaction with consumer loan services at the branch Next in order are the factors: Service capacity, Reliability, Empathy, Price and Responsiveness
Le Tan Phuoc (2021) used the SERVQUAL research model consisting of 5 components of loan service quality, through a survey of individual customers who borrowed from Vietnam International Commercial Joint Stock Bank VIB - Binh Duong Branch, resulting in 204 accepted samples The study uses the SERVQUAL research model consisting of 5 components measuring service quality, namely: Reliability; Empathy; Skills; Accessibility and Competition to measure the level of customer satisfaction when using loan services for individual customers at VIB Binh Duong Based on the results of correlation analysis and multiple linear regression, the author see that all 5 factors have a positive impact on customer satisfaction The research results show that the factor that affects customer satisfaction the most is accessibility, followed by the remaining 4 factors
Dinh Kiem and Tran Dang Tu Uyen (2021) conducted a study to evaluate the satisfaction of individual customers with the quality of loan services of BIDV Nha Trang branch The study was conducted with a sample of 248 customers who borrowed at the branch, surveyed from 6-7/2020 The authors conducted exploratory factor analysis EFA,
25 correlation testing and linear regression model analysis, resulting in 6 factors affecting the satisfaction of individual customers with the quality of retail services provided by the bank, including: Trust, Service environment, Empathy, Price, Responsiveness and Bank brand In which, the factors of responsiveness and price have the strongest impact Compared to the initial hypothesis, the Tangibles variable was eliminated because it did not meet the condition of correlation with individual customer satisfaction
Nguyen Ngoc Kim Loan and Nguyen Thi Le Vy (2023) studied solutions to improve individual loan services at Nam A Commercial Joint Stock Bank - Dong Nai Branch Through group discussions and one-on-one discussions with officers in charge of the individual loan department at Nam A Bank - Dong Nai Branch to identify factors in the proposed research model From there, a survey form was developed, a scale for independent variables and dependent variables was developed to find out the influencing factors and the level of impact of the influencing factors on the quality of individual loan services The data collected through the questionnaire will be analyzed by descriptive statistics, Cronbach's Alpha reliability test, exploratory factor analysis (EFA), linear regression analysis through SPSS 16.0 software and Excel 2016 tool to support the calculation and analysis of related data The regression results have determined that the quality of individual loan services is affected by
4 factors: Interest costs, Service capacity, Responsiveness, Empathy
Vettivel and Selvi (2019) conducted a study on customer perceptions of commercial bank lending activities Data was collected by surveying 100 customers of many commercial banks and from the survey results, the authors proposed a model including: Customer Service, Interest Cost, Service Capacity and Responsiveness Then, Cronbach's Alpha, Factor Analys, Cluster Analys reliability analysis was performed, the results showed that all 4 factors of the research model were accepted
Alabboodi (2019) studied the factors affecting customer satisfaction with the service quality of Iraqi banks, conducted quantitative research, applied questionnaires from previous studies and sent them to customers in Iraqi banks, collected 323 samples and then used SPSS
21.0 software to analyze the data Analyzing 5 factors: "Assurance", "Reliability",
"Tangibles", "Empathy" and "Responsiveness", the results showed a significant positive relationship between customer trust and bank completion accuracy
Aktar (2021) studied the impact of service quality on customer satisfaction: An empirical study of private commercial banks in Bangladesh, investigating useful and objective inputs on customer perceptions and expectations and then improving various aspects of the company to achieve those goals A standardized questionnaire was used to collect data from a group of 300 people The data was analyzed and conclusions were drawn using descriptive statistics The resulting SERVQUAL dimensions were used to assess the service quality of three private commercial banks in Rangpur To show the differences, EXIM Bank Ltd., Dutch Bangla Bank Ltd (DBBL) and Mercantile Bank Limited were selected The customers of one bank appeared to be moderately satisfied, but the customers of the other two banks tended to fall short of their expectations on the SERVQUAL dimension The empathy component was found to be the key driver of customer satisfaction for both EXIM Bank Ltd and Mercantile Bank Limited On the other hand, reliability, tangibles, and assurance were found to have a significant impact on customer satisfaction for Dutch Bangla Bank Limited
The study by Gazi et al (2021) on Determinants of Customer Satisfaction in Banking Sector: Evidence from Bangladesh identifies the factors influencing customer satisfaction in the banking sector of Bangladesh as the economic growth and stability of a country depends on the health of its banking sector The study attempts to investigate and evaluate the impact of service quality on customer satisfaction in the banking sector The sample data was collected from 382 respondents who were customers of 32 selected commercial banks in Bangladesh A pre-structured questionnaire was used to collect the required data and information OLS regression model and descriptive statistical tools were used to analyze the data The results of this study show that service quality (i.e., tangibility, reliability, and empathy) has a statistically significant impact on customer satisfaction The results also show that there is a positive correlation between customer satisfaction and service quality dimensions in the banking sector of Bangladesh The present study shows that in the domestic
27 banking industry, service quality dimensions (i.e., tangibility, reliability and empathy) have a significant positive impact on customer satisfaction
Adethya and Surulivel (2024) studied the utilization and satisfaction of individual loans among salaried employees of banks in Chennai The authors conducted a random survey of employees who had taken individual loans from banks in Chennai and collected
354 samples and analyzed them After conducting t-test, correlation analysis and linear regression, the results obtained were that customer satisfaction with individual loans was affected by factors including: customer service, interest rate, approval time and responsiveness
Cronbach’s Alpha, EFA, ANOVA analysis and regression model
Tangibles (+) Assurance (+) Reliability (+) Convenience (+) Empathy (+)
Cronbach’s Alpha, EFA, correlation analysis, Multiple
Cronbach’s Alpha, correlation analysis and linear Regression
Reliability (+) Empathy (+) Skill (+) Accessibility (+) Competition (+)
Cronbach's Alpha, EFA, correlation test, regression model analysis
Nam A bank – Dong Nai branch regression qnalysis
Service capacity (+) Empathy (+) Interest cost (+)
Cronbach's Alpha, EFA, multiple regression analysis
Commercial banks in Tiruelveli District of Tamilnadu, India
Cronbach’s Alpha, alternating factor analysis
EXIM bank, DBBL, Mercantile bank PLC (Rangpur, Bangladesh)
Cronbach's Alpha, EFA, linear regression analysis
(+): Positive impact on dependent variable
(-): Negative impact on dependent variable
Most studies mainly focus on analyzing factors affecting customer satisfaction with banking services Through methods such as factor analysis and linear regression, based on theory and collected data to indicate factors affecting customer satisfaction and provide directions to improve service quality from banks In the research model of the above related studies, the independent variables usually are (1) Tangibles, (2) Service capacity, (3)
Cronbach's Alpha, OLS regression analysis
10 banks in Chennai, India t-test, Pearson correlation analysis, regression analysis
Reliability or Trust, (4) Empathy, (5) Assurance and (6) Interest Along with the main dependent variable "Customer satisfaction", previous studies have focused on identifying the key factors affecting customer satisfaction with banking services, providing a foundation for the author in this study
RESEARCH METHODOLOGY
Research process
Step 1 Determine the research objectives First, from the urgent issues that need to be researched, the author sets out the main objectives to help have an overview of the work that needs to be done to have research results that meet the set objectives
Step 2 Analyze the theoretical basis and synthesize previous studies Based on the study of related fundamental theories, the author provides an overview of the nature of the problem being researched and lays the foundation for the entire research paper However, the author synthesizes previous studies related to the research topic to inherit and supplement research gaps
Step 3 Design the research model and select the research method After reviewing the research, the author proposes a research model through previous studies, identifies variables representing factors affecting customer satisfaction, and variables representing customer satisfaction At the same time, builds hypotheses for each variable representing factors affecting customer satisfaction and selects the appropriate research method for the model
Step 4 Collect and process data After building hypotheses for the selected variables, the author proceeds to collect data from highly reliable information disclosure sites From the collected data, it is necessary to process and clean the data to avoid missing values and unbalanced data
Step 5 Check the model's defects and perform model regression In this step, the author checks the data through descriptive statistics and runs the regression model on SPSS 20.0 However, the models often have correlation phenomena between variables, multicollinearity, and variable error variance; to make the model more stable, the study must use some tests to detect the above defects
Step 6 Analyze research results After regression model, the author analyzes the impact of factors affecting customer satisfaction At the same time, considers whether the
34 results are consistent with theory and compares with the results of previous studies
Step 7 Conclusion and recommendations Based on the research results, the author recommend some management implications to improve the quality of personal loan services
Analyze the theoretical basis and synthesize previous studies
Presentation of results and discussion
Perform inspection steps (Cronbach’Alpha, EFA, )
Identify dependent and independent variables in the model
Research model
3.2.1 Basis for proposed research model
Based on the evaluation and comparison of the concepts of the research models that have been reviewed, the author synthesizes the factors that affect customer satisfaction This will be the basis for the author to determine which factors affect customer satisfaction and build an initial proposed research model at BIDV NKKN branch The results of the service quality factors that affect customer satisfaction are summarized by the author as follows:
Table 3.1 Service quality factors affecting customer satisfaction in reviewed studies Independent variable
6 Le Duc Toan and Tran Thi Chau Ha
7 Le Trung Hieu and Huynh Le Thua Bang (2021)
9 Dinh Kiem and Tran Dang Tu Uyen
10 Nguyen Ngoc Thi Kim Loan and
Source: Author's synthesis Depending on the operating context of each different service industry, the author will choose the appropriate model for that study However, the evaluation of the above research models analyzed in Chapter 2 shows that the SERVPERF model only asks questions that are biased towards feelings, sometimes not expressing the expectations of customers for the service they experience, so the results obtained will not fully describe the feelings of the surveyed subjects, the study chooses the SERVQUAL model
Based on the theory and through the results of synthesizing factors in previous studies, the factors affecting customer satisfaction with the quality of loan services include: (1) Tangibles, (2) Responsiveness, (3) Reliability, (4) Service capacity, (5) Empathy and (6) Financial benefits
Through a review of related domestic and foreign studies, the author chose the dependent variable as individual customer satisfaction with bank loan services For the independent variable, based on previous studies, it was found that there are 6 main factors affecting individual customer satisfaction with bank loan services: (1) Tangibles, (2) Responsiveness, (3) Reliability, (4) Service Capacity, (5) Empathy, (6) Financial benefits
The model will be used to test the group of hypotheses from H1 to H6 by the regression method with a significance level of 5%
The regression equation has the form:
Y is the assessment of individual customer satisfaction with the quality of loan services at BIDV NKKN branch;
X n are factors affecting customer satisfaction; β 0 is the intercept coefficient of the regression model; β n is the regression parameter; ɛ is the error term
Research hypothesis
Based on the proposed research models, the author proposes some research hypotheses for the study as follows:
After reviewing the studies, it was found that the factor of bank tangibles is the factor that appears in most of the previous studies and has a positive impact on the satisfaction of individual customers with the bank's loan services Focusing on tangible factors such as conveniently designed transaction counters, fully equipped customer waiting rooms, physical products such as savings books, ATM cards, transparent loan contracts, in addition to preferential gifts also attract customer satisfaction with the bank's loan services
H 1 : Tangibles have a positive impact on individual customer satisfaction with the quality of loan services at Joint Stock Commercial Bank for Investment and Development of Vietnam - Nam Ky Khoi Nghia Branch
According to Alabboodi (2019), Vettivel and Selvi (2019), the level of responsiveness is a factor that has a strong impact on customer satisfaction with the service The level of responsiveness of the bank is reflected in the processing of business operations A bank with a high level of responsiveness can expand access to loan sources for customers, as well as process customer loan applications professionally Therefore, the author proposes the following hypothesis:
H 2 : Responsiveness has a positive impact on individual customer satisfaction with the quality of loan services at Joint Stock Commercial Bank for Investment and Development of Vietnam
- Nam Ky Khoi Nghia Branch
According to Le Tan Phuoc (2021), the trust that customers place in a bank is the ability to provide services as committed in a reliable and accurate manner Trust is built on the bank's reputation in terms of scale and position In addition, the commitment to loan interest rates, fees, loan procedures, etc is also where customers place their trust Therefore, the author proposes the following hypothesis:
H 3 : Reliability has a positive impact on individual customer satisfaction with the quality of loan services at Joint Stock Commercial Bank for Investment and Development of Vietnam - Nam Ky Khoi Nghia Branch
Demonstrates the capacity, qualifications of the staff and the reputation of the bank Demonstrated through whether the staff has a firm grasp of knowledge about loan products and services, effective communication and working skills, quickly solves work, and makes few mistakes during the process of operation Moreover, the staff's attitude is thoughtful, polite, respectful of customers throughout the service process, and resolves customer complaints quickly and effectively According to Vettivel and Selvi (2019) from the bank's perspective, service capacity is demonstrated through expertise and readiness in solving problems during the customer's loan process, making customers feel secure about the bank's loan service Therefore, the author proposes the hypothesis:
H 4 : Service capacity has a positive impact on individual customer satisfaction with the quality of loan services at Joint Stock Commercial Bank for Investment and Development of Vietnam - Nam Ky Khoi Nghia Branch
In the process of providing banking services, interaction between customers and bank employees is inevitable (Dinh Kiem and Tran Dang Tu Uyen, 2021), related to listening to customer’s opinions, showing understanding of the circumstances and financial capacity of borrowers, proactively asking and supporting when customers have difficulties in paying loans or problems related to loans The human factor is the core part that creates this success and the more the bank cares for customers, the more sympathy will increase Therefore, the author proposes the hypothesis:
H 5 : Empathy has a positive impact on individual customer satisfaction with the quality of loan services at Joint Stock Commercial Bank for Investment and Development of Vietnam - Nam Ky Khoi Nghia Branch
According to Nguyen Ngoc Kim Loan and Nguyen Thi Le Vy (2023), the issue of reasonable prices will affect customer satisfaction in choosing banking services The benefit of loan interest rates helps customers save costs and increase their ability to repay loans as well as achieve financial goals effectively Therefore, the author proposes the following hypothesis:
H 6 : Financial benefits have a positive impact on individual customer satisfaction with the quality of loan services at Joint Stock Commercial Bank for Investment and Development of Vietnam - Nam Ky Khoi Nghia Branch.
Research data
In this study, the author uses both primary research data and secondary data
Primary data: Collect data by surveying individual customers who have used and are using loan services at BIDV NKKN branch From the statistical results obtained, they will be entered into Excel 2016 software, then use SPSS 20.0 software to process and analyze the data
Secondary data: collect data related to BIDV NKKN's individual customer loan services from the period 2022 - 2024.
Research design
The author synthesized, edited and agreed on opinions to complete the official survey of the research article The survey questionnaire includes 22 observed variables (19 variables of factors affecting individual customer satisfaction with loan service quality at BIDV NKKN branch and 3 variables measuring their satisfaction with loan service) with the evaluation based on a 5-level Likert scale: (1) Strongly disagree, (2) Disagree, (3) Neutral, (4) Agree,
Table 3.2 Scale of factors affecting individual customer satisfaction with loan service quality at BIDV NKKN branch Variable Code Observation variables Source
BIDV Nam Ky Khoi Nghia’s geographical location is convenient for customers
Nguyen Ngoc Thi Kim Loan and Nguyen Thi Le Vy
Facilities (room space, parking lot, ) of BIDV Nam Ky Khoi Nghia are clean and comfortable
BIDV Nam Ky Khoi Nghia’s equipment (computers, printers, ) is modern
Le Trung Hieu and Nguyen Le Thua Bang
Forms related to loan transactions provided by BIDV Nam Ky Khoi Nghia are clear and easy to understand
RP2 Customer loan transactions are handled quickly and accurately Vettivel and Selvi
Le Trung Hieu and Nguyen Le Thua Bang
BIDV Nam Ky Khoi Nghia’s individual customer loan products are diverse and meet your loan needs
You choose BIDV Nam Ky Khoi Nghia’s loan service because you trust BIDV's brand Le Tan Phuoc (2021),
Le Duc Toan and Tran
You believe that BIDV Nam Ky Khoi Nghia provides loan services as you expect
You believe that BIDV Nam Ky Khoi Nghia always ensures the confidentiality of customer information
Le Trung Hieu and Nguyen Le Thua Bang
The service attitude of the staff is always cheerful and enthusiastic when you carry out loan procedures at BIDV Nam Ky Khoi Nghia Le Trung Hieu and
BIDV Nam Ky Khoi Nghia staff are always ready to help you with problems throughout the loan process
BIDV Nam Ky Khoi Nghia staff have extensive professional knowledge to fully and accurately answer all your questions about loan procedures
EM1 BIDV Nam Ky Khoi Nghia’s staff always proactively contact you
Dinh Kiem and Dang Tran Tu Uyen (2021),
43 when encountering problems with loan procedures
BIDV Nam Ky Khoi Nghia arranges working hours that are suitable and convenient for you
BIDV Nam Ky Khoi Nghia hotline is always ready to receive customer support requests
BIDV Nam Ky Khoi Nghia has flexible interest rates for each loan product
Le Trung Hieu and Nguyen Le Thua Bang
(2021), Dinh Kiem and Dang Tran Tu Uyen (2021), Vettivel and Selvi
The fees related to BIDV Nam Ky Khoi Nghia's loan services are reasonable
BIDV Nam Ky Khoi Nghia's loan interest rates and fees are competitive in the market
BIDV Nam Ky Khoi Nghia always clearly lists loan interest rates publicly
How satisfied are you with the personal loan service at BIDV Nam
Le Duc Toan and Tran Thi Chau Ha (2020),
Le Trung Hieu and Nguyen Le Thua Bang
You will introduce your relatives or friends to use BIDV Nam Ky Khoi Nghia's personal loan service
You will continue to use BIDV Nam
Ky Khoi Nghia's personal loan service when you have new loan intentions
Dinh Kiem and Dang Tran Tu Uyen (2021), Nguyen Ngoc Thi Kim Loan and Nguyen Thi Le Vy
This scale was implemented and adjusted by the author based on related studies, and found no problems with semantics and coherence Therefore, the author used this scale to develop a questionnaire and conduct a large-scale survey to serve the official quantitative research
The survey sent to customers includes two main parts, the first is the personal information section to investigate demographic issues as well as the customer's approach to the branch The second part is the evaluation question based on the scale in table 3.2
For exploratory factor analysis, based on the study of Hair, Anderson, Tatham and Black (1998) on the expected sample size, the minimum sample size for this analysis is usually 5 times the number of observed variables Applying this rule to a study with 22 variables, may need at least 110 survey samples to ensure the reliability of the analysis results
For multiple regression analysis, the minimum sample size required is calculated by the formula n = 50 + 8 x m (where m is the number of independent variables) (Tabachnick and Fidell, 1996), so the minimum number of survey samples required is 50 + 8 x 6 = 98 observations
In this study, the author selected individual customers who have used and are using loan services at BIDV NKKN branch from 2022 to 2024, these are customers that the author can access through data sources from colleagues and departments In addition, customers
45 who conduct the survey can help to identify customers they know who have borrowed capital at the branch This will help increase the sample size
The author conducted the survey in a direct form The survey subjects included the branch's customers in different age groups, genders and monthly incomes The direct survey was conducted by the author interacting directly with customers at the branch and sending the survey form to bank staff to survey the customers they is managing through direct interaction or sending it as an attachment in the email
Customers will answer the questionnaire themselves, the survey results will be compiled and analyzed by the author using Excel 2016 software Next, through SPSS 20.0, the author will process the data such as testing the scale and analyzing the results to reduce the observed variables and redefine the groups in the research model, regression analysis to examine the level of impact of factors affecting the satisfaction of each customer for BIDV NKKN's loan services Finally, compare the difference in the level of impact on satisfaction through appropriate tests.
Data analysis method
Descriptive statistics are the first tool the author use to explore and understand the data the author collect It provide an overview of the research sample through basic statistics, creating a solid foundation for further analysis Together with simple analysis, they form the basis for quantitative analysis of the data There are two main quantities used when creating descriptive statistics:
Measures of central tendency: By choosing a statistical value to show how similar units can actually be different, the solution to this goal is the measure of central tendency The most commonly used quantity is the mean
Measures of statistical dispersion: These numbers describe how spread out the data is The most commonly used measures are the standard deviation, the maximum value, and the minimum value
3.6.2 Reliability analysis using Cronbach's Alpha coefficient
Cronbach’s Alpha is a measure of the internal consistency or reliability of a set of items It is a measure of how well the items in a scale relate to each other and how well they measure the same underlying construct With a high Cronbach’s Alpha reliability, it can be seen that the items in the scale are highly correlated with each other and they are measuring the same underlying construct Conversely, a low Cronbach’s Alpha coefficient shows that the items in the scale are not well correlated with each other and they are not measuring an underlying construct
When testing the reliability of a scale using Cronbach’s Alpha, the study focuses on the following requirements: The overall correlation coefficient of each observed variable in the scale must be ≥ 0,3 for a good measurement (Ferketich, 1991) The author will eliminate variables with a total item correlation < 0,3 A scale with a Cronbach's Alpha coefficient of 0,6 or higher is acceptable in terms of reliability (Nguyen Dinh Tho, 2012) Normally, a scale with a coefficient between 0,7 and 0,8 has good reliability
Exploratory factor analysis EFA is a statistical technique used to reduce the dimensionality of data into smaller summary variables and to explore the underlying theoretical structure of the phenomenon under study, which is very useful in identifying the necessary variables appropriate for the research problem and used to find the relationship between variables Exploratory factor analysis EFA is often used to explore the factor structure of a scale and examine its internal reliability
KMO and Bartlett values together assess the suitability of all available data for EFA analysis The KMO coefficient has a value from 0,5 to 1, a large KMO value means that factor analysis is appropriate The acceptable level of the KMO coefficient is from 0,6 or higher (Nguyen Dinh Tho, 2012) Bartlett's test is used to test the hypothesis that the variables are not correlated with each other in the population, the test is statistically significant (Sig < 0,05) When the test is statistically significant Sig > 0,05, the observed variables are correlated with each other in the population In exploratory factor analysis, the loading factor
47 of each observed variable must have a value greater than 0,5, the stopping point is when the Eigenvalues value is greater than 1 and at the same time the total cumulative explained variance is greater than 50% (Hair, et al., 2019)
In EFA, each measured variable is represented as a synthesis of two parts: the common variation explained by the common factors and the separate variation (characteristic factors) The common factors reflect the relationship between variables, while the characteristic factors represent the unique characteristics of each variable If the measured variables are standardized, the factor model is represented by the equation:
Xi = Ai1F1 + Ai2F2 + Ai3F3 + + AimFm + ViUi
Where, Xi is the standardized measurement variable i th ; Aij is the standardized multiple regression coefficient of variable i on common factor j; F1, F2, , Fm are common factors; m is number of common factors; Vi is the standardized regression coefficient of variable i on the unique factor i; Ui is the unique factor for variable i
Linear regression analysis is an analytical method used to study the relationship between a dependent variable and one or more independent variables In regression analysis, the dependent variable is the variable the study want to predict or understand better Independent variables are the factors that the author believes affect the dependent variable Linear regression is usually performed by defining a regression model to describe the relationship between variables
Hypotheses are tested through the research data of the equation The study use the t- statistic and p-value to test the research hypotheses in the regression model If the p-value is less than 0,05 (5% significance level), tt can be assumed can assume that the regression coefficient just analyzed is statistically significant and accept the research hypothesis
In the linear regression model, there are several binding assumptions to ensure that the model is valid For the results to be valid and inferential, these assumptions need to be satisfied: constant variance of errors, normally distributed errors, no correlation in errors
Analysis of Variance, also known as ANOVA test, is used to compare data sets, which has the function of assessing potential differences in a dependent variable at the scale level by a nominal variable with two or more categories Analysts use ANOVA tests to determine the impact of independent variables on the dependent variable in regression studies In particular, One-way ANOVA is a statistical technique used to compare the mean values of three or more groups Used in situations where it is necessary to compare multiple mean values from two or more independent data groups based on research criteria It is also used to determine whether any factor has a significant impact on the dependent variable More specifically, it can check whether the satisfaction of customer groups at a branch is similar or not
In chapter 3, the author based on the synthesis of related studies in chapter 2 to propose a research model for the study This model includes 6 factors affecting individual customer satisfaction with the quality of BIDV's personal loan services at NKKN branch, which are Tangibles, Responsiveness, Reliability, Service capacity, Empathy and Financial benefits In addition, in chapter 3, the author presented the research method used to build and evaluate the scale of influencing factors, and implement the research model
This chapter briefly summarizes the method of analyzing quantitative research data as a premise for implementing the next chapter: Descriptive statistics, assessing the reliability of the scale Cronbach's Alpha, KMO and Bartlett's Test, EFA, implementing the regression method for the research model