Research on satisfaction of customers on the quality of consumer loan service in vietnam international commercial joint strock bank VIB ba ria branch

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIET NAM BANKING UNIVERSITY OF HO CHI MINH CITY NGUYEN DUC ANH PHUC RESEARCH ON SATISFACTION OF CUSTOMERS ON THE QUALITY OF CONSUMER L

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIET NAM

BANKING UNIVERSITY OF HO CHI MINH CITY

NGUYEN DUC ANH PHUC

RESEARCH ON SATISFACTION OF CUSTOMERS ON THE QUALITY

OF CONSUMER LOAN SERVICE IN VIETNAM INTERNATIONAL COMMERCIAL JOINT STOCK BANK (VIB) - BA RIA BRANCH

ABSTRACT

The purpose of this thesis is to explore factors affecting customer satisfaction when using consumer lending services at VIB This study is based on the documentary background of decision making process, SERVPERF theory model to measure service quality Both quantitative and qualitative methods are used to analyze data In

quantitative research, the impact of factors on customer satisfaction when using

consumer lending services at VIB is analyzed by survey questionnaires collected from

140 customers

Based on the research results, the factors affecting customer satisfaction when using consumer lending service at VIB include 5 factors but only 2 factors affecting customer satisfaction The qualitative study was conducted by group discussion and in – depth interviews with experts

From the research results, a number of research implications have been

proposed to improve and enhance the customer satisfaction when using consumer lending services at VIB

DECLARATION

I declare that this thesis research is entirely my own composition, the research‟s result is honest, in which there is no previously published content or other content performed by another person except the quotations are cited completely in the thesis

I am responsible for my thesis

Student

Secondly, I want to thanks my parents for their endless love, care and have most assistances and motivation me for the whole of my life I also would like to explain my thanks to my siblings, brothers and sisters for their support and care me all the time

Next, my deeply thanks come to all of my friends who always support me during time I study in university I am thankful for the times that they have listened to

me, advised me and even comforted me Their kindly help, care and motivation gave

me strength and lift me up all the trouble for the rest of my life

TABLE OF CONTENTS

CHAPTER I: 1

INTRODUCTION 1

1.1 STATEMENT OF THE PROBLEM 1

1.2 AIMS OF THE ESSAY 2

1.2.1 Overall objective 2

1.2.2 Main objectives 2

1.3 Research question 2

1.4 Subject and scope of the study 2

1.5 Research method 2

1.6 Research content 3

1.7 Contribution of the topic 3

1.8 Related reasearchs 4

1.9 Structure 8

CHAPTER 2 9

THEORETICAL BASIS OF RESEARCH MODEL 9

2.1 THEORETICAL BASIS 9

2.1.1 Service 9

2.1.1.1 The concept of service 9

2.1.1.2 Characteristics of the service 9

2.1.2 Service quality 10

2.1.2.1 Concept of service quality 10

2.1.2.2 Factors affecting the quality of service 11

2.1.3 Customer Satisfaction 12

2.1.3.1 Concept 12

2.1.3.2 Factors determining customer satisfaction 13

2.1.4 Relationship between quality of service and customer satisfaction 14

2.1.5 Overview of consumer loans 15

2.1.5.1 Concept of consumer loans 15

2.1.5.2 Characteristics of consumer loans 16

2.1.5.3 Role of consumer loans 17

2.2 RESEARCH MODELS BEFORE 19

2.2.1 Model of technical quality - function of Gronroos (1984) 19

2.2.2 The SERVQUAL model of Parasuraman (1988) 19

2.2.3 The SERVPERF model of Cronin and Taylor (1992) 20

2.2.4 Comparison of service quality assessment models 21

2.3 RESEARCH MODELS BASED ON THE SERVPERF MODEL 23

CHAPTER 3 25

RESEARCH METHODOLOGY 25

3.1 STUDY BACKGROUND 25

3.1.1 Introduce VIB bank 25

3.1.2 Advantages and disadvantages of consumer lending 26

3.1.2.1 Advantages 26

3.1.2.2 Disadvantages 27

3.2 RESEARCH PROCESS 27

3.3 RESEARCH DESIGN 28

3.3.1 Preliminary research 28

3.3.2 Formal study 29

3.3.2.1 Research sample 29

3.3.2.2 Methods of data analysis 30

3.3.2.3 Survey procedures 30

3.4 BUILDING SCALE 33

Table 3.1 Data encrypt 34

3.5 DESIGN QUESTIONNAIRE 35

CHAPTER 4 36

RESULTS AND FINDING 36

4.1 ANALYSIS DECRIPTION 36

4.1.1 Descriptive Statistics 36

4.1.2 Mean value 39

4.2 ASSESSMENT SCALES 44

4.2.1 Assess the Reliability of Scale by Cronbach's Alpha 44

4.2.2.1 Factors affecting customer satisfaction 45

4.2.2.2 Customer Satisfaction 48

4.3 ADJUSTMENT MODEL STUDY 49

4.3.1 Research model 49

4.3.2 Theories 49

4.4 TESTING THE RESEARCH MODEL 50

4.4.1 Analysis of correlations between variables 50

4.4.2 Regression analysis 52

4.4.2.1 Compliance testing of the model 52

4.4.2.2 Self-correlation test 52

4.4.2.3 Testing individual regression coefficients 53

4.4.2.4 Multi-collinear testing 54

4.4.2.5 Test the hypothesis of the model 54

4.4.2.6 Construct the regression model 55

4.4.3 ANOVA test, T-test 56

4.4.3.1 T-test 56

4.4.3.2 Analysis of ANOVA 57

CHAPTER 5 61

CONCLUSIONS AND RECOMMENDATIONS 61

5.1 SUMMARY OF RESULTS OF THE STUDY 61

5.2 RECOMMENDATIONS 62

5.2.1 RESPONSIVENESS AND RELIABILITY 62

5.2.2 TANGIBLE 63

5.3 LIMITATIONS OF RESEARCHES AND NEW RESEARCH DIRECTIONS FOR NEXT RESEARCH 64 REFERENCE

APPENDIX

LIST OF ACRONNYMS

LIST OF FIGURES

Figure 2.1 Research model suggests the influence of factors on customer satisfaction on the quality of consumer loan services at VIB Bank Ba Ria Branch

24

Figure 3.1.Research process 28

Figure 4.1 Average value of criteria of "tangible means" 40

Figure 4.2 Average value of criteria of "Reliability" factor 41

Figure 4.3 Average value of “Responsiveness” criteria 42

Figure 4.4 Average value of criteria for factor "Assurance" 43

Figure 4.5 Average value of criteria for "Empathy" factor 44

Figure 4.6 Research model suggests the influence of factors on customer satisfaction on consumer lending service quality at VIB Bank Ba Ria Branch 49

Figure 4.7 Results of regression analysis 56

LIST OF TABLES

Table 2.1 Comparison of service quality assessment models 21

Table 3.1 Data encrypt 34

Table 4.1.Characteristics of research samples 37

Table 4.2 Summary table of Cronbach’s Alpha coefficients of five independent factors and dependent variables 44

Table 4.3 Table 4.3 KMO and Bartlett's Test 45

Table 4.4 KMO and Bartlett's Test 48

Table 4.5 The correlation matrix between the variables 51

Table 4.7 ANOVA 53

Table 4.8 Results of regression analysis 54

Table 4.9 Testing the difference 56

Table 4 10 Summary of differences test results 57

Consumer finance market is really important position and role in our country in the process of development of market economy socialist orientation in a uniform and progress through modern Actually the situation has also been visible economic growth

in 2017 has shown the contribution of consumption growth is huge Credit growth is over 60% per year According to the Financial Market Overview Report 2017 published by the National Financial Supervisory Commission (NFSC), the share of consumer credit in total outstanding loans increased from 12.3% to 18% Therefore, the business orientation of many Vietnamese banks has shifted to the segment of customers who have demand for consumer loans However, the facilities are not good; customers are not satisfied with the service attitude of employees; the process, procedures are still a lot of trouble, still occur a lot, affecting the satisfaction of customers with the services of the bank

Recognizing the urgency of this issue, the topic of " Research On Satisfaction

Of Customers On The Quality Of Consumer Loan Service In Vietnam International Commercial Joint Stock Bank (VIB) - Ba Ria Branch " has been chosen by the author

as a research topic with hopefully contributing a small part to the overall development

of VIB

1.2 AIMS OF THE ESSAY

1.2.1 Overall objective

Research on satisfication of customers on the quality of consumer loan service

in Viet Nam international commercial joint stock (VIB) – Ba Ria branch

1.2.2 Main objectives

(1) Identify factors that affect customer satisfaction

(2) Determine the priority order of the factors for customer satisfaction

(3) Propose a number of recommendations to improve customer satisfaction

1.3 Research question

Research Question: What are the factors that affect customer satisfaction on the quality of consumer loan services at VIB – Ba Ria branch?

1.4 Subject and scope of the study

 Subject of the survey: Individual customers on their satisfaction with the quality

of consumer loan services

 Scope of the study:

 Place of the research: VIB – Ba Ria branch

1.5 Research method

 Qualitative research methods:

Through the review of researches which relate to the customer satisfaction As a result, the theoretical basis on the factors influencing the customer satisfaction From that, the author proposes a research model

 Quantitative research method:

This method is done by distributing questionnaires to individual customers of VIB in order to collect information From the information which is collected,

the author uses SPSS version 20 to process the data through the following specific steps:

 Statistics describe the sample;

 Analyzing by Cronbach Anpha;

 Analyzing EFA;

 Analyzing Regression;

1.6 Research content

To achieve the research objectives, answer the questions posed, the thesis aims

to resolve the following issues:

 Research overview: Theses research books, newspapers, documents related to quality of service

 The identification of the components that make up the quality of banking services should be followed closely based on Cronin & Taylor's SERVPERF (1992) model developed on the SERVQUAL scale model of Parasuraman (1988), which offers a model of satisfaction measurement the quality of banking services and the verification of related research hypotheses

 Based on the results give some recommendations for the topic

1.7 Contribution of the topic

The first is to clarify the theoretical basis for service quality, customer satisfaction, the relationship between them, the general consumer loan service, and the presentation of previous research models to model, study recommended

The second presentation of general VIB bank Ba Ria branches, the advantages and disadvantages in consumer lending It also presents the research process, scale construction, questionnaire

The third is based on a questionnaire collected on SPSS 20 for the purpose of performing sample description, scale evaluation, factor analysis, model modulation, correlation analysis and linear regression; ANOVA analysis and T-Test Then evaluate the results and make recommendations for the research

1.8 Related reasearchs

The research of “ Research on customer satisfaction with products and services

of HSBC branch in Ho Chi Minh City” by Do Tien Hoa (2007) about customer satisfaction with products and services of HSBC branch in Ho Chi Minh City Based

on the SERVQUAL and GRONROSS models, this study has 8 scales of customer satisfaction and three scales for measuring satisfaction The result of the model analysis, customer satisfaction consists of 6 components: price competitiveness, corporate image, credibility, convenience, service style and visibility In particular, price competitiveness is the most influential factor

The research of Vo Thi Thuy Anh (2012) regarding the quality of consumer lending services of commercial banks, practical application at Vietnam Joint Stock Commercial Bank for Foreign Trade, Da Nang Branch The research has developed Cronin and Taylor (1992) 's SERVPERF model with six components (reliability, responsiveness, service capability, empathy, tangible means, perceived price) Results

of the factors: (1) service capacity and empathy have the strongest impact on the quality of consumer lending, followed by (2) price perception, (3) (4) affordability and tangible means, (5) ability to meet after disbursement, and (6) reliability of service delivery service

The rearch of Tran Hong Hai (2014) about factors affecting customer satisfaction using ATM card services of Joint Stock Commercial Bank for Foreign Trade of Vinh Long branch Based on a modified SERVPERF model, the study is based on seven components: trust, empathy, tangible means, price, network, service effectiveness, assurance The results show that the importance of factors affecting customer satisfaction consists of four components in order: price, network, empathy, trust

The research of Dyah R Rasyida, M Mujiya Ulkhaq, Priska R Setiowati and Nadia A Setyorin (2016) about assessing service quality This research aimed to assess the service quality of the service firms and identify what dimensions they have to prioritize to attain the customer satisfaction SERVPERF model was employed to achieve the first objective while importance-performance analysis was utilized for the second objective A case study was conducted in Ahmad Yani International Airport, Indonesia, to demonstrate the applicability of the method The research has demonstrated the assessment of servicequality using weighted SERVPERF and identified the attributes of the service providers that perceived important by the customers and its performance A case study was managed in the airport service, a capital intensive establishment The SERVPERF model which consists of importance and perception aspects has been found to provide a relative simple and inexpensive means of doing service quality assessment The results indicated that the assessment of service quality has many potential benefits for airport managers Identifying customers‟ perceptions of service quality for a particular establishment allows management to better tailor its marketing efforts to ensure patrons‟ expectations are met This includes identifying, prioritizing and improving areas of service weakness and ensuring that valuable resources are allocated in the most effective areas In addition, promotional

messages can be refined so that customers have realistic expectations of the service offered

The research of Olga Vershinina (2017) about customer satisfication in the banking sector The aim of the thesis is to measure the level of customer satisfaction for PAO “Sberbank” The purpose of the paper is to reveal the customers perception of the bank which would be important for the future growth of the company Theoretical framework of the research examines the term “customer satisfaction” and analyzes different models that can measure it The thesis employs SEVQUAL dimensions, Profit-chain model and ISO standards that are a basis for an empirical research A priority questionnaire was chosen as a form of a quantitative method 100 customers of the bank answered the questionnaire According to the results, the overall customer satisfaction is above average but not excellent The bank should emphasize the importance of customer satisfaction among its employees and take further actions in order to enhance the quality of service Employee education, beneficial programs for customers and implementation of new features are recommended According to the results, the most popular services of the bank are the Debit card, Mobile Bank and the Deposit account service Overall, these three services received good ratings from the respondents and they find the employees very helpful regarding these services However, the Autopayment and the loan services received low rates, which can indicate a problem Most respondents don't use these services and others rated the extent to which employees were helpful with these services as low There is an issue with employees helping the client that requires further research

The research of RUBOGORA FELIX (2018) in terms of service quality and customer satisfication in selected banks in rwanda The study was based on five research objectives: (a) to determine the profile of respondents in terms of gender, type

of account, educational qualification and banking experience, (b) to determine the level

of service quality in BPR, (c) to determine the level of customer satisfaction among BPR customers (d) to determine relationship between service quality and customers‟ satisfaction in BPR and (e) to recommend strategies enhance customer satisfaction basing on the study findings The findings revealed that majority of the respondents were female, over three equators with current type of account, over half of the respondents had no professional education qualification and majority of the respondents had been customers for BPR for relatively a long period of time that is from three years and above It went ahead to revealed that both the level of service quality and customer satisfaction was at mean ≈3 (high level) The findings from PLCC showed a significant and positive relationship between service quality and customer satisfaction while comparing dimension like customer loyalty with reliability, responsiveness and assurance On the other hand, comparison based on positive word

of mouth with service quality sub-variables like Reliability, Assurance, tangibles, empathy and responsiveness, revealed that there was no significant relationship between the variables

In general, these studies have identified factors influencing quality of service based on the model of SERVQUAL model of Parasuraman (1998) and model of SERVPERF by Cronin and Taylor (1992) Cronbach Alpha reliability assay, EFA analysis, regression correlation analysis and anova analysis were used to obtain the results of the study and propose recommendations to improve the problem But each subject has different subjects and problems

For the topic “ Research On Satisfaction Of Customers On The Quality Of Consumer Loan Service In Vietnam International Commercial Joint Stock Bank (VIB) -Ba Ria Branch” thesis aims at identifying factors and solutions for the quality of services consomer loans at VIB Bank Previously, there was no topic at VIB on this topic Thesis refers to the theoretical basis of service quality and based on a

questionnaire survey to give the results determine the factors affecting the quality of services consumer loans at VIB and makes recommendations to improve the missing elements

1.9 Structure

This thesis is presented in five main chapters

Chapter 1 – Introduction: This chapter provides an overview of the current study It focuses mainly on introducing the basic information of the research, including: the statement of the problem, aims and objective of the essay, subject and scope of the study, related research and research method

Chapter 2 - Theoretical basis of research model: This chapter systematizes the theory of service quality, customer satisfaction, the relationship between them, the general consumer loan service It also presents the previous research models to provide

a recommended research model of five elements: (1) tangible means, (2) reliability, (3) ability to respond, (4) assurance, (5) empathy

Chapter 3 – Methodology: General introduction of VIB Bank BA RIA, advantages and disadvantages of consumer lending It also presents the research process, scale construction, questionnaire

Chapter 4 - Result and finding: This chapter introduces the quantitative research used to evaluate scales, validates the research model and hypotheses, uses descriptive statistics to evaluate scales, and performs some Verification of the research model This chapter includes: sample description, scale evaluation, factor analysis, model modulation, correlation analysis and linear regression; ANOVA analysis and T-Test

Chapter 5 - Conclusions and recommendations: This chapter presents summary findings From that point of view, the limitations of research and new directions for further research

CHAPTER 2

THEORETICAL BASIS OF RESEARCH MODEL

Chapter 2 systematizes the theory of service quality, customer satisfaction, the relationship between them, the general consumer loan service Besides also presents previous research models to make model studies suggest

2.1 THEORETICAL BASIS

2.1.1 Service

2.1.1.1 The concept of service

There are many different views and definitions for the concept of service According to Valarie A Zeithaml and Mary J Bitner (2000), "services are behaviors, processes, and ways of doing things that create value for the consumer, satisfying the needs and expectations of customer" According to Kotler & Armstrong (2004), services are activities or benefits that businesses can offer their customers to establish, strengthen and expand long-term relationships and partnerships with their customers

2.1.1.2 Characteristics of the service

The service is a "special product" with many different characteristics, such as intangibility, heterogeneity, inseparability and inconsistency

 Intangibility

The service does not have a specific shape, can not be touched, weighed, measured as specifically as tangible products When buying products and services, it is impossible to test, quality test before buying as normal products Customers can only feel and evaluate the quality of service the best when using the service

 Heterogeneity

This characteristic of service performance is often different depending on the server, the service, the time it takes, the service provider, the service area, the object and the service location In addition, the same type of service has many levels of performance from popular to high-end

 Inseparability

The indivisibility of the service is expressed in the fact that the creation and use

of the service often take place at the same time If the goods are usually produced, stored, distributed and finally delivered to the consumer, the service is created and used immediately during the creation process For services, the customer accompanies during or part of the service creation process while in the commodity product, the customer only uses the product in the final stage

 Inconsistency

The service may be in the following order but can not be re-used Thus the service is the product used when formed and ends immediately after

2.1.2 Service quality

2.1.2.1 Concept of service quality

Other than the quality of goods are tangible elements, measured by objective criteria, the quality of service depends on the attitude, the level and the subjective sense

of customer service Depending on the subject and the research environment, there are different definitions

According to Lewis & Mitchell (1990), a quality service is a service that meets the needs and expectations of customers According to Parasuraman & Zeithaml, Berry (1985, 1988) states that service quality is the distance between customer expectations and their perceptions when used through service The above definition of Parasuraman

is accepted by many scientists and business, widely used in research as well as business practice

2.1.2.2 Factors affecting the quality of service

Quality of service is measured by a number of factors and the precise identification of these factors depends on the nature of the service and the research environment Many authors have investigated this problem but the most common and well known are the criteria for assessing the quality of services provided by Parasuraman et al

In 1985, Parasuraman gave ten factors that determine the quality of service: Access, communication, competence, courtesy, credibility, reliability, responsiveness, security, tangibles and understanding the customer

And in 1988, he generalized into five specific factors: reliability, responsiveness, tangibles, assurance and empathy

On the basis of research on the quality of service and inherited doctrines of Parasuraman, Johnston and Silvestro (1990) also concluded in other factors of quality

of service including: helpfulness, care, commitment, functionality and integrity

In 2001, Sureshchandar also gave five factors affect the quality of the service include: core service, human element, non-human element, tangibles and social responsibility

Factors measure the quality of service is determined very diverse vary fields of research Therefore, the research literature outlined above is a reference for the specific definition of service quality scales in the banking sector

2.1.3 Customer Satisfaction

2.1.3.1 Concept

There are many different views about customer satisfaction, but overall customer satisfaction is the customer's perception of the service provider after using the service ( Terrence Levesque and Gordon HG McDougall, 1996) Customer satisfaction

is the emotional response / perception of the customer to the service provider on the basis of comparing the difference between what they received versus what was previously expected (Oliver, 1999 and Zineldin, 2000) Kotler (2000) found that satisfaction was determined on the basis of a comparison between the results obtained from the service and customer expectations were considered on the following three levels:

 Unhappy when results are less than expected

 Satisfied when the results are the same as expected

 Very satisfied when the results get more than expected

Although there are many different concepts, the definition of customer satisfaction is always associated with the following factors: Sentiment / attitudes towards service providers, Customer expectations about ability to meet demand from the service provider, service performance / value provided by the service, willingness

to continue using the service Customer satisfaction plays an important decisive role for the Bank:

 First, when customers are satisfied with the products and services they offer, they will become loyal customers using the services of the bank, introducing the bank well to others This has greatly impacted the bank's performance: a significant increase in sales, market share, business profits and a good image of the Bank in every customer

 Second, finding new customers costs more than maintaining existing customers According to many statistics, the cost of finding a new customer is 5-6 times higher than the cost of keeping an old customer, and the company can increase profits from 25 to 125 % by retaining 5% of the company's customers (Adam Kafelnikov 2006)

2.1.3.2 Factors determining customer satisfaction

Based on the knowledge of service characteristics and service quality model surveys as well as the service quality scales in the banking sector, the factors determining the satisfaction of customers are:

Good quality service: The customer wishes to enjoy a good quality of service because they feel comfortable, be respected when dealing with banks Therefore, banks attach importance to the training of friendly staff, open, always considerate, smiling with customers, at the same time, have a fast working style, professional, willing to work meet the requirements of customers

Convenience: In the current busy life, convenience, fast, available at any time customer needs is always a factor appreciated by customers, because it helps customers save time

Flexible, simple and transparent in procedures: Business banking services always exist in the uncertainty of quality so the flexibility, simplicity and transparency

in procedures to avoid misunderstandings, between banks and customers, saving time, avoiding customers because of waiting Therefore, the banks always take the initiative

in improving the procedures, reducing paperwork on the basis of legal guarantee In addition, the bankers are also instructed to be flexible in the customer service process, not rigid but on a case by case basis to help customers get the best service Therefore, trust and peace of mind in trading is a very important measure of customer satisfaction

with banking services Customers tend to deal with banks recommended by their friends, relatives, banks with great facilities, large branch networks and large chartered capital

Competitive interest rates and fees, incentives: The price of banking services is expressed in terms of interest rates and service fees, which have a very deep relationship with customer satisfaction Peace of mind for the customer, that they have the right choice and that choice is the best choice Therefore, in the context of fierce competition, the maintenance of competitive interest rates, preferential for customers is one of the solution banks to attract customers

Customer service: When using banking services, in addition to finding solutions

to their financial problems, the customer is very interested in sensory elements Banks always try to create close relationships with customers through activities such as sending cards, flowers on holidays, birthdays; send calendars, gifts on holidays, Tet; There are promotions, after 0- sales service with VIP customers

2.1.4 Relationship between quality of service and customer satisfaction

Quality of service is the most influential factor in customer satisfaction (Cronin and Taylor, 1992; Yavas et al., 1997; Ahmad and Kamal, 2002) If service providers to give customers the quality products that meet their needs, the enterprises which have initially make the customer satisfied

Therefore, to improve customer satisfaction, service providers must improve service quality Quality of service and customer satisfaction are closely related, in which the quality of service is what is created first and then determines the satisfaction

of customers In the study of the relationship between these two factors, Spreng and Mackoy (1996) also point out that service quality is the premise of customer satisfaction

According to Oliver (1993), although the relationship is closely related, the quality of service and customer satisfaction are certain differences in the following aspects:

The quality measurement criteria is specific service while customer satisfaction

is related to many factors other than the quality of service such as price, customer relations, time use the service

Assessments about the quality of service depends on how the service is performed, but the customer satisfaction is a comparison between the value received and the expected value for the implementation of such services

Awareness of the quality of service less dependent on experience with service providers, the business environment while the customer satisfaction depends much more on these factors

2.1.5 Overview of consumer loans

2.1.5.1 Concept of consumer loans

Consumer loans are loans intended to finance consumer spending, including individuals and households This is an important source of financial assistance for people in need of housing, household appliances and vehicles In addition, spending on education, health and tourism is also possible financed by consumer loans

Consumer lending is a popular product in many countries, especially in developed countries In Vietnam, most commercial banks have consumer lending products, from large loans such as buying houses, buying cars to small loans such as loans for home appliances

There are many concepts and perspectives on consumer loans, although bearing different words, but the basic content is the same wish to express the same mention the main purpose of this type of loan: Consumer loans are loans used for consumption

purposes, personal activities, households, those who wish to improve their living standards but due to the economic situation is not able to pay in the present From there, development banks offering loan packages to meet consumer customer needs and the profit obtained from the original on loan

2.1.5.2 Characteristics of consumer loans

The characteristics of this type of loan are different from other lending activities, customer size, risk and interest rates

 The size of each loan contract is small because the demand is usually individual and household, but because of the large number of individuals and households, the total size of the loan Consumer lending is huge Besides, the cost of lending institutions high, the bank has to do all the business from collecting information

on customers, customer financial appraisal, contract signing, disbursement, loan control and require large human resources

 The quality of financial information of borrowers is not high: banks can not completely verify personal information about customers such as health, real income, employment, living conditions, all of this increase the risk

 Consumer demand is almost unstable with interest rates Usually, they are only interested in the amount of money they pay, rather than the interest they incur This is different from the business, the interest rate is the decisive factor as it is part of the cost of the business, usually very large Thus, the interest rates of consumer loans are often higher and more rigid than the interest rates of other loans of commercial banks such as loans for business production in agriculture, industry

 Consumer demand often depends on the economic cycle: when the economy grows strongly, it means that people's living standards soar, consumer demand

will increase, leading to increasing demand for loans for consumer activity has increased markedly and vice versa

 Income and education are two variables that have close ties to demand consumer loan of customers because this is a form of unsecured loans, borrowers will have to repay the principal and interest information through their income as wages

 Source of repayment of the borrower can be large fluctuations, depending on the course of work, skills and experience to the work of these people Thus the probability of consumer lending is often higher than that of business loans

 The status of the client is a difficult determinant, but it is important to decide on the repayment of the loan because it is a form of unsecured credit This loan has higher interest rate so it is usually a big profit for commercial banks

2.1.5.3 Role of consumer loans

 Customers:

While loans for business production are traditional business activities of commercial banks, formed and developed together with the development of banks, consumer lending has just developed in the near time However, consumer loans has developed rapidly due to the increasing demand for life and the economic boom Commercial banks are increasingly focusing on developing consumer loans

Indeed this loan has helped consumers enjoy better living conditions, benefited from the benefits before they accrue enough money and is especially important than it

is necessary for cases where individuals have spent Urgent, urgent needs such as spending on education and health,

However, if consumer abuse of consumer loans is bad, it can also cause borrowers to exceed their allowable spending limits, as well as future spending activities, leading to financial turmoil

 Banks:

Although this is a risky and expensive loan, it requires accurate and reliable decisions from banks but this loan really gives the bank a lot of profit from the operation It also shows:

 It helps to share risk, diversify banking activities, attract new customers, and establish a close relationship between the bank and its customers by enhancing and expanding the network Improving the quality of consumer lending services made the bank's ability to adapt to increasing competition with banks and other credit institutions during the current economy

 Creating the trust of customers for the bank, because the bank is not only the organization that is interested in companies and businesses, but banks are very interested in the small and necessary needs of consumers

 To meet consumer demand of customers, offering useful products of his to each client and increase the number of customers trading through retail stores, this can mean a lot in sharing risks for the bank

 This not only helps banks increasingly promote intermediary role in the economy but banks still gives consumers approach a new life complete with amenities and more

 Economy:

Once demand increases will stimulate the production development, especially when the economy needs a stimulus, rising consumer price stability, socio-economic stability

Although this is one of many loans in the operation of commercial banks, this loan really brings many benefits to the economy of the country, meet consumer demand and through which the State achieved stability goals To reduce unemployment, improve people's life and reduce social evils, step by step integrate our country into the world economy

2.2 RESEARCH MODELS BEFORE

2.2.1 Model of technical quality - function of Gronroos (1984)

Gronroos (1984) argues that the quality of a business's service is determined by three components: technical quality, functional quality, and images Inside:

Technical quality: These are the values that the customer actually receives from the service provider (what is the customer receiving?)

Functional Quality: Shows how the service is delivered to the consumer of the service provider (How do customers get that service?)

Images: Playing a very important role for the service provider and this factor is built primarily on two components of technical quality and functional quality n addition, Gronroos (1984) argues that customer expectations are also influenced by factors such as: traditional marketing (advertising, public relations, pricing) and external influences (customs, habits, consciousness, word of mouth), in which word of mouth has a significant impact on potential customers than traditional marketing and emphasizes that the quality of service research must be based on the viewpoint of the consumer

2.2.2 The SERVQUAL model of Parasuraman (1988)

The SERVQUAL model is based on a perceived quality of service perspective that is a comparison between expected values and perceived customer values

Quality of Service = Perceived Level - Expected Value

The SERVQUAL scale measures service perceptions through five components

of service quality, including:

 Tangibles: Expressed through the appearance, dress of service personnel, equipment to provide services

 Reliability: Demonstrating the ability to perform the right service on time

 Responsiveness: Expressing the willingness of service personnel to provide timely service to customers

 Assurance: Showing the professional level and the way of serving courtesy, hospitality with customers

 Empathy: Expressing care to individual customers

The scale consists of two parts, each with 22 statements The first part is to determine customer expectations for the type of service Respondents indicated their level of desirability for the service The second part is to determine the customer's perception of service performance The results of the study are to identify the gaps between customer perception of service quality and customer expectations for quality

of service

2.2.3 The SERVPERF model of Cronin and Taylor (1992)

The SERVPERF model is developed based on the SERVQUAL model but measures service quality based on service quality assessment rather than the gap between expected quality and perceived quality Where by:

Quality of service = level of perception

Due to its shortness and simplicity, the SERVPERF model is considered to be a more efficient model In addition, many empirical studies have confirmed the stability and superiority of the SERVPERF model compared to SERQUAL in practice The

SERVPERF scale model, though simple, is better for responding to the question of consumer perceptions than to the desire and perception of the questionnaire

2.2.4 Comparison of service quality assessment models

Table 2.1 Comparison of service quality assessment models

before using the

perceived value of the service provided, the quality of service when the expected value is lower than the value of the service and vice versa

Quality of service = Perception-

perception is the good quality of service and vice versa

Quality of service = level

of perception

Scale

3 components:

technical quality, functional quality, and image

Commonly used to evaluate the quality of many different types

of services Ability to assist managers in identifying relevant quality of service

customer perspective

argued that SERVPERF overcomes the limitations

model in that customers find it difficult to

similar parts of the

perceptions This model

customer uses the service This is very difficult to do,

Information must be collected before and after the customer uses the service This is very difficult to do,

More general need for all kinds of services The SERVPERF model does

information needed for

because it does not know what characteristics of the service are highly

customer

2.3 RESEARCH MODELS BASED ON THE SERVPERF MODEL

The official study model for measuring the quality of consumer loan services at VIB Bank in Ba Ria is composed of five elements: (1) tangibles, (2) reliability, (3) responsiveness, (4) assurance, (5) empathy

Hypotheses:

H1: The higher the visibility of a vehicle, the higher the satisfaction of the customer H2: The higher the reliability, the higher the customer satisfaction

H3: The higher the satisfaction rating, the higher the customer satisfaction

H4: The higher the security rating, the higher the customer satisfaction

H5: The higher the empathy, the higher the satisfaction of customers

Figure 2.1 Research model suggests the influence of factors on customer satisfaction on the quality of consumer loan services at VIB Bank Ba Ria Branch

SUMMARY

Chapter 2 has systematized the theory of service quality, customer satisfaction, the relationship between them, the general consumer loan service It also presents the previous research models to provide a recommended research model of five elements: (1) tangible means, (2) reliability, (3) ability to respond, (4) assurance, (5) empathy

CHAPTER 3

RESEARCH METHODOLOGY

Chapter 3 presents VIB Ba Ria Bank, the advantages and disadvantages of consumer lending It also presents the research process, scale construction, questionnaire

3.1 STUDY BACKGROUND

3.1.1 Introduce VIB bank

Ba Ria International Bank Vietnam Branch was established on August 28, 2007,

at 1264 - 1266 Bach Dang, Phuoc Trung Ward, Ba Ria Town, Ba Ria Vung Tau Province As one of the leading facilities in the system, focusing on implementing retail banking operations in the locality, taking service development and bringing customers convenience as a foundation; operations with bank business processes and modern advanced technology, in strict accordance with the project to modernize the current Vietnam bank

The establishment of Ba Ria branch is in line with the process of implementing the restructuring program, associated with comprehensive innovation and solid development with a high growth rate, serving development investment, diversifying guests goods of all economic sectors, developing and improving the quality of banking products and services, improving the safety efficiency of the system as required by the market mechanism and integration roadmap, being the core for building a multi-functional, strong financial group and international integration

3.1.2 Advantages and disadvantages of consumer lending

3.1.2.1 Advantages

VIB's prestige and brand name in the domestic market: VIB only operates for 22 years but has built a strong brand position in the current financial market and a prestigious VIB image in the eyes of customers and partners of VIB For individual customers, the level of awareness of VIB brand is still not high compared to some other banks in the market but has improved significantly in recent years, when VIB is promoting banking activities Retail, aimed at individual customers

Technology platform: VIB has deployed Cisco ACI, launching new features for MyVIB mobile banking application each month to increase customer experience VIB can provide services on MyVIB mobile banking quickly, flexibly and centrally As a result, the number of regular customers using MyVIB increased by 87% in 2017; 93%

of all individual customers' financial transactions are made on MyVIB and digital channels Many of VIB's retail products have quite competitive advantages compared

to the market

With a network of 162 branches and transaction offices in 27 key provinces / cities nationwide has enabled VIB to easily reach customers to provide their NHBL products, help customers choose suitable and effective products

Financial capacity is constantly being strengthened: VIB has become one of the leading joint stock commercial banks in Vietnam with total assets of VND 123.2 trillion, charter capital of VND 5,644 billion and equity of nearly VND 9,000 This is one of the factors determining the scale of retail banking services development

Quality of human resources: VIB currently has more than 5,000 employees with open thinking, flexibility in business management, a team of experienced employees, with basic training to serve nearly 2 million customers

3.1.2.2 Disadvantages

Capital constraints: It can be said that equity capital plays an important role in enhancing the Bank's competitiveness In recent years, VIB has had a good growth in equity but in terms of Vietnam commercial banking system, VIB's charter capital is quite low compared to other banks

Marketing work has not been implemented in a specific and system-wide manner, the cost of marketing is not large, mainly promotional gifts and gifts on certain occasions, or periodically at the end of the year, often not regularly

The quality of products and services is diversified but not different from other banks New products are often launched more slowly than other banks, so they have not attracted customers

Training and development of human resources is still limited Employees only follow the help of experienced staff, but are not really well trained about how to work

as well as clearly about the bank's operating system

3.2 RESEARCH PROCESS

The research process is shown in the following figure

Figure 3.1.Research process

3.3 RESEARCH DESIGN

3.3.1 Preliminary research

The author consulted with the branch and customer about the research problem

to adjust the variables into the model, check the scale, build the research model and set

up the questionnaire

Questions for credit officers, bank leaders:

 Customer rating bank, How satisfied are you with the bank's consumer lending service?

Correction

Preliminary research Scales rough

 Are the criteria (variables observed) in the SERVPERF model applicable to banks appropriate?

 What are the opinions of the bank about measuring quality of service?

 In the criteria above, what criteria are the most important, second, third? Which criteria does the customer care about?

 How does the bank bring satisfaction to customers when using consumer loan services?

3.3.2 Formal study

3.3.2.1 Research sample

Sample selection: Samples were taken by convenient method The distribution

of questionnaires and discussions with customers is done by the author and assisted by the Head of Division, Deputy Manager and Credit Officers of the Personal Banking Division of VIB Bank Ba Ria Branch

Sample size: There are many different views on sample size Many researchers require a large sample size because it is based on large sample distribution theory (Raykov & Widaman 1995) However, the size of the sample is so large that it is not clearly defined Moreover, the sample size depends on the estimation method used However, one researcher suggested that using the ML estimation method requires a sample size of at least 100 to 150 (Hair et al., 1998) There are also researchers specifying a minimum sample size of 200 (Hoelter 1983)

The research model included in this study was composed of 5 independent factors, with 22 variables of observation and customer satisfaction based on 3 variables (Table 3.1) According to Hair & Ctg (1998), for exploratory factor analysis data should be collected with sample size of at least 5 samples per observation variable

Therefore, the sample size must be at least n = 25 x 5 = 125 The study was conducted

to select individual customers using consumer loan services of Ba Ria Branch VIB

A total of 150 questionnaires are sent to customers when customers come to the bank During the survey, there were some customers misplaced, some questionnaires were left empty and some customer did not take consumer loans All questionnaires were discarded prior to entering data Therefore, the number of formal questionnaires

to be entered for analysis was only 126

3.3.2.2 Methods of data analysis

The data analysis method used in this study was the EFA exploratory factor analysis and multiple linear regression All data is encrypted and processed with the support of SPSS 20 software

3.3.2.3 Survey procedures

Step 1: Sample description obtained

This study uses a four-variable sampling method: sex, age, occupation, family income, and education

Step 2: Assess the reliability of the scale (Cronbach's Alpha)

Cronbach's Alpha is a method that allows the operator to eliminate unsuitable variables and limit the scale variables, while evaluating the reliability of the scale via Cronbach's α coefficient According to Nunnally (1978) and Bernstein (1994), only those with Corrected Item-total Correlations greater than 0.3 and Cronbach's Alpha coefficients greater than 0.6 were acceptable and included in the analysis

Step 3: Analyze the EFA Discovery Factor

According to Hair & ctg (1998), exploratory factor analysis is a statistical analysis method used to reduce a set of many interdependent observation variables into