Factors Affecting Loan Repayment Capacity of Student Loan Program in the Vietnam Bank for Social Policies in Ho Chi Minh City

Abstract

This study analyzes the factors affecting loan repayment capacity of student loan program in the Vietnam Bank for Social Policies in Ho Chi Minh City (VBSP) to propose some recommendations to reduce risks for these loans. In order to find out the factors affecting the repayment capacity of customers, data were collected for 400 observations of VBSP program loan application for students in Ho Chi Minh City in 2020. Based on obtained data, the study analyzes the factors affecting the customer's ability to repay loans through the Binary Logistic regression model. The results show that there are seven independent variables affecting the ability to repay the student loan student program in the VBSP in Ho Chi Minh City: (i) gender; (ii) education; (iii) scale; (iv) members of unions; (v) credit history; (vi) sense of savings; and (vii) demand for loans from other credit institutions.