Bad Debts in Vietnamese Banks - Quantitative Analysis and Recommendations

There has been a raising concern about the bad debts amount in the Vietnamese banks over the past few years. The huge amounts of bad debts lead to variety of consequences for the economy at both macroeconomic and microeconomic levels. The paper concentrates on finding solutions for this critical issue basing on quantitative analysis. The causes of the problem were identified by establishing the models that describe the relationship between bad debts and macroeconomic and bank-specific factors in the context of Vietnam. Overall, the bad debts in Vietnam were mostly contributed by bank-specific determinants. It is recommended that banks should improve the lending procedure to prevent bad debts build up. Besides, SBV should careful watches on interest rate movements and activities of big banks. Most importantly, all solutions need to be carried out timely before the issues become much more severe