The aim of this study is to investigate factors affecting credit risks of the
borrowers (both corporate and individual customers) of Vietnam bank for
agriculture and rural development's branch at Can Tho city (lender), thereby
proposing several solutions to improve the bank’s operational efficiency in
the upcoming years. Simultaneous qualitative and quantitative research
methods are applied and secondary data from 102 corporate customers and
2100 individual clients are collected directly from the financial report of the
Can Tho branch of Vietnam bank for agriculture and rural development
(Agribank) until the end of 2018. A binary logistics model is employed to
identify the determinant factors of the credit risk of bank customers.
Estimation results reveal that the credit risk of corporate customers is
affected by the factors of sales growth, return on sales ratio, Debt to equity
ratio, collateral-to-outstanding loan balance ratio, and customer's loan
history which are consistent with those of previous studies, whereas the
credit risk of individual customers is influenced by the factors of age,
educational level, loan purpose, loan maturity, type of collateral, customer
income, and customer loan history, which are confirmed by previous studies.
The empirical findings of the article imply that the Can Tho branch of
Agribank should take precautions in order to limit the credit risk of bank
customers. In addition, several governance recommendations are given for
bank’s manager to improve the operational efficiency of bank.