Analysis of Factors Affecting the Credit Risk of Individual Customers in the Mekong Delta: Case at the Vietnam Bank for Agriculture and Rural Development

Abstract

This study aims to help managers limit credit risk when financing individual customers. The study was conducted by collecting primary and secondary data from the credit records of 300 individual customers with loans at Agribank at 05 Bank for Agriculture & Rural Development in Tra Vinh province branch, Ben Tre province branch, Soc Trang province branch, and Vinh Long province branch by random sampling method. The author uses a binary logistic regression model to determine and measure the impact of factors affecting credit risk. The research results show that the credit risk of individual customers at Agribank is affected by the following factors arranged in the order of impact from high to low: own capital on the total capital of the loan project, loan amount per total value of assets assessed by the bank, use of loan capital, main occupation generating income for debt repayment, loan history, number of dependents of borrowers, loan supervision inspection, and business credit officer experience. Therefore, the topic also provides some governance implications to help banks manage credit risk for individual customers at Agribank in the near future.

Keywords: individual customers; credit risk; Agribank; governance implications