FACTORS AFFECTING CREDIT ACCESS OF INDIVIDUAL BUSINESS HOUSEHOLDS IN HO CHI MINH CITY, VIETNAM

Abstract

Purpose: The study studies the factors affecting access to credit of individual business households in Ho Chi Minh City (HCMC), Vietnam. The authors proposed policy implications based on research results that improve access to credit for individual business households. Theoretical framework: Access to formal credit can be understood in many ways. This article considers that access to proper credit is the ability of a customer to use the capital of a traditional credit institution based on meeting financial obligations - emphasizing the ability to repay both principal and interest. Design/methodology/approach: The authors chose a mixed method to conduct the study. This is a suitable research method to answer the research questions raised. Mixed methods include both qualitative and quantitative methods. However, this combination is the implementation of interlacing, replacing the two approaches to solve each problem, the research design's specific goal. The authors analyzed Data from May 2022 to December 2022 in HCMC based on the EFA and CFA, using the structural equation model analysis (SEM) method with SPSS 20.0 software and Amos. Findings: The article's findings showed five factors affecting access to credit of individual business households in HCMC, Vietnam. In particular, the loan procedure factor substantially impacts the five factors affecting credit access. Research, Practical & Social implications: The study has provided empirical evidence on the factors affecting formal credit access by a linear structural model and provides evidence that factors such as the loan procedure affect traditional credit affecting access to credit. Originality/value: The authors give some policy implications for state management agencies, credit institutions, customers, and mass organizations, such as increasing the role of local Government and increasing the ability to use banks, E-commerce, design new loan products to help individual business households access more formal capital, and at the same time, reduce black credit.