Factors Affecting The Decision To Choose A Loan Bank For Individual Customers at Samcombank - Vung Tau

Volume 6, Issue 6, June – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
Factors Affecting the Decision to Choose a Loan

Bank for Individual Customers at Samcombank -
Vung Tau
Author: Nguyen Thi Phuong Anh
Ba Ria – Vung Tau University
Abstract:- This research is conducted to build and test a decision to choose a bank for a loan of individual customers
theoretical model among factors affecting individual at Sacombank.
customers' borrowing decisions at Sacombank-Vung
Tau. The study used qualitative research method II. LITERATURE REVIEW AND RESEARCH
combined with quantitative research. The research MODEL
results show that the factors influencing the customer's
decision to choose a loan bank include: bank image (β = 2.1. Loan decision
0.269); service staff (β = 0.2); financial benefits (β = Loan capital is capital formed from borrowing, to a
0.438); suggesting relatives (β = 0.276). The four factors predetermined time to be returned to the lender.
explains 70% of the variance in the decision to choose a
loan bank. The research results provide suggestions to Loan capital of an entity is formed through credit
the bank managers in improving major factors to relationships. The basic characteristics of loans are
increase the customers' decision to borrow capital at the repayment and compensation. The repayment of a loan is
bank. Some limitations and future research directions reflected in the repayment obligation of its owner to the
are also mentioned. person who has transferred the capital. At the end of the
loan term, the owner of the loan capital must return it to the
Keywords:- Decision to Choose a Loan Bank, Individual person who transferred the capital to him and the principal
Customers. debt must be accompanied by a credit interest that represents
the compensatory nature of the loan.
I. INTRODUCTION
2.2. Previous relating studies
In various business activities of a bank, credit Research by Martin Owusu Ansa (2014) conducted
activities are one of those that bring the biggest source of face-to-face interviews with 250 teachers in Ghana. Factors
revenue and profit for the bank. In which, the customer affecting the choice of bank of high school teachers
segment that accounts for a major proportion in terms of includes: Loan interest rate; Bank reputation; Security of the
number and balance is the group of individual customers. bank; Number of years of establishment of the bank; Low
Individual customers have very diverse and rich loan needs service fees; and the Easiness to make loan.
such as production and business loans, home loans, car loans
and other consumer loans. Like other commercial banks, Christos C. Frangos et al. (2012) studied the factors
Sacombank - Vung Tau branch is also facing many affecting the customer's decision to borrow from a bank.
difficulties in achieving credit growth target. The number of The research results show that the factors of service quality,
deployed products has not met the needs of customers. On lending policy, satisfaction from the bank's services have
the other hand, in terms of advertising, human resources still influences on the decision of individual customers to borrow
have many limitations and obstacles that affect the branch's money.
ability to develop personal credit activities.
Hafeez Ur Rehman and Ahmed (2008) collected data
The question that needs to be addressed are: what through direct interviews from 358 individual customers of
should Sacombank - Vung Tau Branch do to access the high banks in Pakistan. The research results show that the factors
demand for loans of individuals and achieve the goal of affecting the choice of a bank of individual customers are
personal credit growth?; What solutions does the bank need customer service, convenience, equipment of the bank and
to offer to keep existing customers and attract new potential the general environment of the bank.
customers?
2.3. Theoretical model and research hypothesis
The study is conducted to build and test the factors Based on the reviewed theory, factors such as financial
affecting the decision to choose a loan bank of individual benefits, bank image, service staff, and suggesting relatives
customers. From the obtained results, the study provides are proposed to have positive influences on the decision of
managerial implications to improve the factors affecting the individual customers to choose a loan bank.
IJISRT21JUN189 www.ijisrt.com 205

ISSN No:-2456-2165
Figure 1. Proposed research model
III. RESEARCH METHODS evaluated through Cronbach's Alpha coefficient and EFA
analysis, CFA analysis. Next, in order to test the proposed
The group interview method is carried out in research hypotheses, the study used the analysis of linear
qualitative research, collecting opinions from 11 customers structural model (SEM).
who are having loans at the Bank. The qualitative research
method is conducted with the goal of testing if the IV. RESEARCH RESULTS
theoretical model suit the research context, supplementing
and modifying the scale accordingly. The results of testing the theoretical model and basic
research hypothesis are presented. The theoretical model has
Preliminary study (n = 60): Preliminary research sample was 109 degrees of freedom. SEM results show that the model
performed by preliminary analysis through Cronbach's alpha has a Chi-squared of 199,749 (p = 0.000). If adjusted for
coefficient and EFA discovery factor to evaluate the degrees of freedom with CMIN/df = 1.833 < 2, the other
convergent and discriminant value of the scale. Observable criteria are satisfactory: TLI = 0.943; CFI = 0.955; RMSEA
variables that are not qualified in this step will not be used = 0.064. Thus, the SEM results show that the model is
in later steps and the remaining variables will be used at the compatible with market data.
official quantification stage.
The estimated results of the (normalized) theoretical
Formal research (N = 210): The main topic is surveyed by model are shown in Figure 2. These results show that
the official research questionnaire. The scales will be hypotheses H1 to H4 are accepted at 99% confidence.
Figure 2. SEM results of theoretical (normalized) model
Table 1. SEM estimated results

Estimated C.R. P
Relationship
B S.E. 
LCNH <--- HANH 0.281 0.066 0.269 4.281 ***
LCNH <--- NVPV 0.213 0.067 0.2 3.16 0.002
LCNH <--- LITC 0.462 0.081 0.438 5.724 ***
LCNH <--- GYNT 0.388 0.091 0.276 4.273 ***

ISSN No:-2456-2165
The coefficient of determination of the estimated [7]. Mokhlis, S., Mat, N. H. N., & Salleh, H. S. J. I. R. o.
model (R2 = 70% > 50% ) shows that the explanatory level B. R. P. (2008). Commercial bank selection: the case
of the model is strong. This shows the level of explanation of undergraduate students in Malaysia. 4(5), 258-270.
of the independent variables to 70% of the variance of the [8]. Mokhlis, S. J. T. J. o. H. R., & Learning, A. (2008).
individual customers' decision to choose a bank for a loan. Consumer religiosity and the importance of store
attributes. 4(2), 122-133.
V. CONCLUSION [9]. Saleh, M., Rosman, M. R. M., Nani, N. K. J. J. o. b., &
management. (2013). Bank selection criteria in a
After adjusting and supplementing, the scales are customers’ perspective. 7(6), 15-20.
reliable and satisfy the allowable values. The research [10]. Siddique, M. (2012). Bank selection influencing
results show that the factors affecting the decision to choose factors: a study on customer preferences with
a bank for a loan of individual customers at Sacombank reference to Rajshahi city. Asian Business Review, 1
Vung Tau branch include: (1) financial benefits, (2) bank (1), 81-87. In.
image, (3) service staff, and (4) suggesting relatives. [11]. Tam, P. T., & Thuy, P. T. N. J. T. c. K. t. v. N. h. c.
ASIAN. (2014). Factors affecting the tendency to
Regarding the research method: The research results choose banks. (56), 17.
have added to the scale system of factors affecting the [12]. Zulfiqar, B., Arshad, H. M., Fareed, Z., Shahzad, F.,
decision to choose a bank for a loan of individual customers Hussain, S. J. I. J. o. M. V., & Chains, S. (2014).
in the world by adding a case in Vietnamese market. This Criteria of selecting bank in Pakistani banking sector:
will support applied researchers to conduct their researches Study of banking customers in Sahiwal, Pakistan. 5(4),
in Vietnamese market. 19.
Regarding research in the field of behavior: The results

of the measurement model in this study contribute to support
researchers in the field of behavioral science in general as
well as in the field of human resources in particular. The
scale applied in this study must be evaluated for their
validity and reliability in different cases.
The test results show that the theoretical model fits the
market data. The research hypotheses proposed in this study
are accepted and have important implications for bank
leaders and managers.
Finally, the theoretical model added to the theoretical

system in the behavioral field. Researchers can refer to this
research model for their researches in different fields of
activity. In each different field, the relationship building is
also different, therefore the new relating research models
needed to be carefully tested, reviewed and constructed.
REFERENCES
[1]. Asafo-Agyei, D. (2011). The factors that influence the

choice of banks by customers–A case study of Makola
community.
[2]. Chigamba, C., Fatoki, O. J. I. J. o. B., & Management.
(2011). Factors influencing the choice of commercial
banks by university students in South Africa. 6(6), 66.
[3]. Davidson, P. (2011). Post Keynesian macroeconomic
theory: Edward Elgar Publishing.
[4]. Giao, H. N. K., & Dat, H. M. J. T. c. p. t. k. t. (2020).
Evaluation of the selection factors for commercial
banks in Ho Chi Minh City. Ho Chi Minh of the
elderly. 97-115.
[5]. Kotler, P., Armstrong, G., Saunders, J., & Wong, V.
(1999). Principles of Marketing: of Europe. In: New
Jersey: Prentice Hall.
[6]. Kotler, P., & Armstrong, G. J. N. J. (2010). Principles
of marketing Pearson Prentice Hall.

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Volume 6, Issue 6, June – 2021 International Journal of Innovative Science and Research Technology

Factors Affecting the Decision to Choose a Loan

IJISRT21JUN189 www.ijisrt.com 205

Figure 1. Proposed research model

Figure 2. SEM results of theoretical (normalized) model

Table 1. SEM estimated results

IJISRT21JUN189 www.ijisrt.com 206

Regarding research in the field of behavior: The results

Finally, the theoretical model added to the theoretical

[1]. Asafo-Agyei, D. (2011). The factors that influence the

IJISRT21JUN189 www.ijisrt.com 207

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