Bad training skill of debt collection center and verification department at VP bank

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Phan Ngoc Thuy Duong

BAD TRAINING SKILL OF DEBT
COLLECTION CENTER AND
VERIFICATION DEPARTMENT AT
VP BANK

MASTER OF BUSINESS (HONOURS)

Ho Chi Minh City – Year 2019

1


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Phan Ngoc Thuy Duong

BAD TRAINING SKILL OF DEBT
COLLECTION CENTER AND
VERIFICATION DEPARTMENT AT
VP BANK
MASTER OF BUSINESS (HONOURS)

SUPERVISOR: Dr Doan Anh Tuan

Ho Chi Minh City – Year 2019

2


TABLE OF CONTENTS
Executive summary .................................................................................................................... 3
1.

Company overview ............................................................................................................. 4
1.1.

Viet Nam Prosperity Joint Stock Commercial Bank (VP Bank) ............................... 4

1.2.

Organizational chart ................................................................................................... 4

1.3.

Risk Management Department .................................................................................. 5

2.

Symptoms: High bad debt (NPL) ratio in Retail segment.................................................. 7

3.

Problem indentification ..................................................................................................... 9

3.1.

4.

3.1.1.

Problem finding process ...................................................................................... 10

3.1.2.

Poor credit risk management policy .................................................................... 10

3.1.3.

Bad training skill in debt recovery and verification............................................. 11

3.2.

Problem validation ................................................................................................... 13

3.3.

The importance of main problem ............................................................................. 14

Cause justification ........................................................................................................... 15
4.1.

Possible causes ......................................................................................................... 15

4.1.1.

Lack of training document ................................................................................... 15

4.1.2.

No department specializing in training ................................................................ 15

4.1.3.

Uneven knowledge of instructors ........................................................................ 16

4.1.4.

Lack of cost for training ....................................................................................... 16

4.2.
5.

Potential problem ...................................................................................................... 9

Validating causes ..................................................................................................... 16

Alternative solution and action plan ................................................................................ 18
5.1.

Solution 1: Propose to establish training team for Verification and Collection

department............................................................................................................................ 19

3

5.2.

Solution 2: Build internal training program ............................................................. 25

5.3.

Solution 3: Hire external partners to train staffs of Collection and Verification

department............................................................................................................................ 28
6.

Supporting information .................................................................................................... 34

REFERENCES ......................................................................................................................... 41

4


LIST OF FIGURES
Figure 1: VP Bank’s organization chart
Figure 2: Risk Management Department’s organization chart
Figure 3: NPL ratio of banks at the end of the third quarter of 2018
Figure 4: % New NPL by month from 2017 to 2018
Figure 5: Accumulated New NPL by product in 2018
LIST OF DIAGRAMS
Diagram 1: Initial Cause-effect map of Risk Management Department
Diagram 2: Updated Cause-effect map of Risk Management Department
Diagram 3: Final Cause-effect map of Risk Management Department

LIST OF TABLES
Table 1: Reasons for delinquency of NPLs

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LIST OF ABBREVIATIONS
NPL

Non performing loan

UPL

Unsecured personal loan

KPI

Key performance indicator

CI

Credit institution

VPB

Viet Nam Prosperity Joint Stock Commercial Bank (VP Bank)

2

Executive summary
Bad debt is considered a big problem for the banking system in Vietnam in particular
and the economy in general. In recent years, the bad debt ratio in Vietnam has been constantly
rising. This is a consequence of many internal and external causes. But in it, the outstanding
problem is the limited risk management of commercial banks but directly. Recognizing that,
the state bank as well as commercial banks have focused on completing the management of
bad debts. This is the basis for controlling and minimizing losses in credit activities, ensuring
banking operation efficiency and promoting the country's economic development.
Vietnam Prosperity Joint Stock Commercial Bank is one of the joint stock commercial
banks established early and developing steadily in Vietnam. VP Bank is constantly expanding
credit activities and many other products and services. In parallel with this development
orientation, risks arising from credit activities increased significantly, reflected in the annual
bad debt ratio of the bank. Based on the symptom is high NPL rate in retail segment, after
verifying potential problems, the main problem of bad training skill in debt recovery and
verification is revealed with two main causes are pointed out which are
Since then, by using internal reports and conducting in depth interview with some staffs
to understand the main problem, the thesis would like to propose some solutions to improve
the management of bad debts in credit activities of VP Bank.

3


1. Company overview
1.1. Viet Nam Prosperity Joint Stock Commercial Bank (VP Bank)
Vietnam Prosperity Joint Stock Commercial Bank (VP Bank) was established on
August 12, 1993. After nearly 25 years of operation, VP Bank has developed its network to
219 transaction points with a staff of nearly 24,000 employees. By the end of 2017, VP Bank's
charter capital has increased to VND 15,706 billion.
VP Bank is gradually asserting the reputation of a dynamic bank with stable and
responsible financial capacity to the community. In 2017, VP Bank closed its 5-year journey

(2012-2017) with great achievements in scale and profitability, making VP Bank one of the
leading commercial joint stock banks in Vietnam.
Especially, 2017 is a historic milestone for the bank when nearly 1.5 billion shares were
officially listed on HOSE, attracting great attention of domestic and international investors.
With constant efforts, VP Bank's brand has become more and more strong and confirmed
through many prestigious awards. Particularly in 2017, VP Bank received 20 domestic and
international awards continuously, showing the recognition of prestigious organizations for VP
Bank's impressive growth in brand value.
VP Bank's new brand with the motto "Act for dreams" is built from the following
elements: Professional, Dedicated, Different, and Simple. Towards a long-term vision, VP
Bank is determined to promote the image of a bank that always strives to serve customers with
the friendly attitude and the fastest speed.
VP Bank is ranked by Brand Finance, the world's leading brand valuation consultancy,
as one of the four banks with the highest brand value and one of the 22 most valuable brands
in Vietnam in 2017.
1.2. Organizational chart

4


Source: VP Bank’s website (www.vpbank.com.vn)

Figure 1: VP Bank’s organization chart
1.3. Risk Management Department

Figure 2: Risk Management Department’s organization chart

5

As in organization structure of Risk Management Department in figure 2, the
department divided into many teams. In this thesis’ scope there is three teams in retail
segment, namely: Debt Collection Center (include Debt Collection Strategy and Retail Debt
Collection), Retail Risk and Verification Department should be focused on. Each team has
specific responsibility:
Debt Collection Strategy
-

Develop management and debt recovery strategies;

-

Build and manage automatic debt reminder system;

-

Set up training programs to train debt recovery officers;

-

Control the quality of debt recovery through the reporting system;

-

Make plans for debt recovery in each period based on the strategy of the bank's
leadership.

Retail Debt Collection
Responsible for recovering loans from individual customers, including:
-

Remind pre-due debts and overdue debts by SMS message system based on the list of
loans due in the month;

-

Call overdue customer to collect debt according to the available scenario;

-

Field visit to meet customers directly;

-

List out loans with signs of fraud then sent to the in charge department for further
actions;

-

List out customers having difficulties in repaying debts to implement financial
solutions.

Verification Department
-

Analyze and assess customer's risk level when making a loan decision;

-

Assessing risks with disbursed loans: determining the financial situation of loan

applicants.

Retail risk
-

Develop and implement a credit risk management framework.

-

Develop and implement a credit risk strategy based on VPB's credit risk appetite.

-

Give opinions on credit risk aspects for the deployment of new credit products and
credit activities in the new market.

-

Prepare annual debt collection plan

-

Evaluate debt recovery strategies that are being applied

-

Evaluate the quality of debt collection activities compared to the plan
6

-

Evaluating policy documents related to debt recovery activities

-

Review reports on debt recovery activities and debt recovery quality

2. Symptoms: High bad debt (NPL) ratio in Retail segment
Bad debt is the money that the bank lends to borrowers but when it is due, it cannot be
claimed due to subjective factors from customers such as customers, businesses, credit
institutions loss, bankruptcy leads to the inability to pay the bank's borrowed debt when it is
due. Bad debt has been and will continue to negatively impact the flow of capital into the
economy. The higher the NPL ratio, the greater the risk and loss of capital flow of commercial
banks. This is considered to be the main reason to curb and limit the flow of credit in the
economy.
According to the Decision No. 493/2005 of the Governor of the State Bank of Vietnam
dated April 22, 2005 on debt classification, appropriation and use of provisions to deal with
credit risk in banking activities of credit institutions bad debt is defined as follows:
"Bad debts are those classified into group 3 (Non-standard debts), group 4 (Doubtful debts)
and group 5 (Loans capable of losing capital).
Debt groups are classified under Article 6 and Article 7 in this Decision. Include:
-

Classification of debts under Article 6 is mainly based on the overdue period of
debts (Group 3: overdue period from 90-180 days, Group 4: overdue from 181 360 days, Group 5: overdue is over 360 days).

-

Classification of debts under Article 7 is mainly based on the debt repayment

capability of customers. (Group 3: Debts which are assessed by the CI as capable
of partially losing principal and interest, Group 4: Debts assessed by the CI as a
high possibility of loss, Group 5: Debts which are evaluated by the CI that no longer
able to recover, accept loss of capital).

Thus, bad debt in the opinion of the State Bank of Vietnam is also determined based on
two factors: (i): overdue more than 90 days or (ii): worrying ability to repay debts ”. However,
the approach of Vietnamese commercial banks according to which factors depends on the
ability and conditions to conduct debt classification under Article 6 or Article 7 of Decision
493/2005.

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When bad debt increasing in the loan portfolio of the bank will cause serious effects for
the operation process of bank's business (1). A higher ratio of bad debt shows the limitation of
financial institutions and influence to fund management. Bad debt also effects significantly to
the functions of the bank goods through weakness bank assets and distress decrease in income
when the irrecoverable debt widening.

Source:

Figure 3: NPL ratio of banks at the end of the third quarter of 2018
According to VP Bank's consolidated financial statements, consolidated bad debt has
increased sharply from 3.4% at the end of 2017 to 4.7% at the end of the third quarter of 2018.

Figure 4: Ratio of new NPL by month from 2017 to 2018

8

The above table shows the percentage of new non-performing loan in Retail segment from
January to December between year 2017 and 2018. In retail segment, it can be seen from the
data that, most of the months, new NPL rate of 2018 is higher than 2017 and also higher than
the target for 2018.

Figure 5: Accumulated New NPL by product in 2018
When analyzing the NPL ratio by product of the individual customer segment, it can be
seen that this rate is highly concentrated in products without collateral. As a result , it illustrates
that high NPL rate in retail segment, especially in unsecured product (UPL and credit card)
should be seen as a symptom that manager need to focus on.
3. Problem indentification
3.1. Potential problem

Diagram 1: Initial Cause-effect map of Risk Management Department
9


3.1.1. Problem finding process
In order to identify main problem of the department, following steps were executed:
-

Take in-depth interview with some staffs in Risk Management Department to
understand the symptoms and potential problems.

-

Review theories related to the symptoms and potential problems.

-

Analysis financial data.

By following above steps, some potential problems are listed as below:
3.1.2. Poor credit risk management policy
Financial institutions face many types of risks. One of the most common risks is credit
risk, which involves a change in the credit quality of the partner, thereby affecting the
profitability of the financial institution that due debt cannot be paid by customers. Preventing
the restriction of credit risk is a difficult and complicated issue because the credit risk is
indispensable, always associated with credit activities, and very complex. Credit risk is often
difficult to control and leads to losses in capital and income of the bank.
There are many different definitions of credit risk, but these views all show the same
nature: credit risk is the possibility of economic losses that commercial banks have to suffer
because the loans that customer borrowed is overdue or customer cannot repay the loan (both
principal and interest) that lead to financial losses such as reducing net income and market
value of capital. According to the definition of the Basel Committee on International Affairs:
"Credit risk is a risk or loss caused by a borrower or partner.” Or "Credit risk is a potential loss
for a debt of CI and a foreigner bank branch because customers do not perform or are not able
to perform part or all of its obligations under commitments ”(Clause 1, Article 3 Circular No.
02/2013 / TT-NHNN).
In the bank's business operations, credit risk is systematic system, so once the credit
risk occurs will cause damage not only for the bank itself in terms of profits, assets, reputation...
but also the affection to the whole banking system and the economy. R. Boffey, G.N. Robson
(2) stated that credit risk cause big impact on bank’s performance and influent directly on bank
failure due to losses from bad loans.
Credit risk management is the best way that all credit institutions need to perform so as
not to lose investment capital. Credit risk management is understood as the process of
identifying, analyzing risk factors, measuring risk, and then choosing to implement measures
and manage credit activities in order to limit and eliminate risks in the process of granting
credit. A good credit risk management will bring benefits to banks such as: (i) Reduce costs,

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improve income, preserve capital for commercial banks; (ii) Create trust for depositors and
investors; (iii) Creating a premise to expand the market and increase prestige, position, image
and market share for banks. According to Viktar Fedaseyeu and Robert Hunt (3) the
implementation of robust and effective credit risk management are very important to enhance
the commercial banks’ performance.
As sharing from Ms.Nguyen Hong Ngoc – Retail Risk team leader, credit policy is a
system of measures related to the expansion or restriction of credit to achieve the planned
objectives and limit risks, ensuring safety in banking business. Credit policy helps banks target
the loan portfolio effectively, and instructs credit officers on necessary procedures, work steps
to perform lending activities. The current limitation of credit risk management policy at retail
segment of VP Bank is partly due to excessive credit expansion, which means poorly selected
customers, the ability to monitor the use of weak loans. More importantly, the compliance with
the credit process is loose and the weakness of staff is also likely to lead to increasing of credit
risk and then cause bad impact to NPL rate.
3.1.3. Bad training skill in debt recovery and verification
First of all, it must be seen that, as a financial intermediary, the bank performs the role
of mobilizing capital from depositors, making loans, recovering debts and repaying to
depositors (principle, interest). This is a regular, continuous and indispensable process of
commercial banks, any interruption in the above process can affect the role of "financial
intermediaries" of commercial banks. Accordingly, if there is no capital mobilization, there
will be no capital to lend; otherwise, it is difficult to recover the debt, it will increase the risk
provision, increase bank costs and increase lending interest rate...
How to improve the efficiency of debt recovery at VP Bank and prevent bad debt has
always been a headache for managers as well as management agencies. Debt recovery without
timely management and recovery measures will lead to prolonged appropriation of capital,
directly affecting business turnover and payment situation as well as profitability of the
business. Like all banks, VP Bank always determines debt handling and recovery is a key task

along with business activities, credit granting. When customers encounter difficulties, they are
unable to repay their debts, if due to objective, temporary and remedy causes, the Bank may
coordinate with customers to find solutions to solve and gradually recover debt. In case the
customer violates a serious credit contract (using capital for wrong purposes ...) or cannot take
remedial measures, recover the business, the Bank will exchange and discuss clearly with the
customer to clearly defining the nature and situation and thereby persuading customers to take
measures to repay debts as soon as possible, avoiding additional losses. Ms. Le Viet Thu –
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Collection Manager – shared that due to the high workload at her team with target for one debt
agent (collector) is contact at least 200 customers per day and the insufficient headcount hence
many new employees have to work (collect debt from customer by call or field visit) after 2 or
3 days being instructed by mentors. Also, currently her department has no team specializing in
training for new staffs and coaching for current staffs. As Ms. Vo Thi Sa Mi – Senior Debt
Collection Officer – besides her daily tasks, sometimes she has to train for some new staffs by
attach them to guide them how to use collection system, how to call customer for their
payment…, she also shared that some of her colleagues have to guide for new staffs like her,
it really impacts to their own performance.
Also, credit verification is an important step to help banks identify and screen good
customers to ensure credit quality. Credit verification is the use of analytical tools and
techniques to evaluate customers according to credit criteria to provide objective and complete
assessments of customers, as a basis for making decisions in terms of granting credit. The
process of credit verificaiton of commercial banking system is the instruction (in the form of
documents) of steps taken from the consideration and collection of necessary information until
the final conclusion about the possibility debt recovery ability when lending. The entire credit
verification process can be done through the following steps: examining customer loan records;
collect additional necessary information; appraise debt recovery ability through information
obtained; estimating and controlling credit risks; final conclusions about debt recovery ability.
Ms. Tran Thi Lien Oanh – Verification team leader – shared that her department conducted a

survey in end of 2018 on nearly 2000 customers having NPLs and the result from this survey
showed that the ratio of customer having income/business was fake is highest among other
reasons for delinquency that caused NPLs. She also insisted that this result come from the
weakness in skill of verification staffs.
No

Reasons for delinquency

Ratio

1 Income/Business was fake

23.76%

2 Business/Financial problem

20.95%

3 Lost job

19.12%

4 Customer's attitude

17.08%

5 Imprisoned/Run-away

7.76%

6 Debt at other banks

7.49%

7 Heath issues

3.84%

Total
Table 1: Reasons for delinquency of NPLs

100.00%

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Source: Verification Department – VP Bank

It can be seen that trainings are considerred as leverage, a important key to further
improving the quality and efficiency of work before new mission requirements. The training
contents are equipped with very important background knowledge about work as well as skills
training, this is also an opportunity for employees to meet and exchange experiences, solve
together problems at work. The training process aims to help employees perform well the
functions and tasks in their current job by providing them with the knowledge and skills
necessary to improve their professional skills and qualifications which are factors that
employees need to supplement. Training is also a constant effort to increase working capacity
and improve the operational capacity of individual individuals in particular and the operational
capacity of the entire organization. It is a key work in the strategy of human resource
development and closely related to other remaining factors such as career planning,
organizational development, assessment of individual and organization's activities ...

3.2. Problem validation
Credit policy is an overview of the bank's regulations on credit activities in order to
provide orientation and guidance on the operations of bank in providing credit to customers.
As Ms. Ngoc, whose task is setting credit policy for retail segment, ensures that the strategic
objectives of the organization are fulfilled, high NPL rate in retail segment partly due to the
excessive credit expansion, which means poorly selected customers, the ability to monitor the
use of weak loans. However, compliance with the credit process is loose and the weakness of
staff that lead to increasing of credit risk. She also mentioned that the current policy is aligned
with bank’s strategy so the remained problem is skill of verification and collection staffs. The
skill of staff is very important to help the bank identify problem loans and can negotiate with
customers in order to avoid transferring debt groups.
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On the other hand, bad training skill in debt collection and verification could lead to 1)
Weak skills in credit ratings and therefore will be able to decide on loans that are not profitable
or even make the bank lose its capital; 2) there is no ability of appraisal of collateral for the
right loan; 3) difficult to control and monitor the purpose of using customers' capital after
granting credit to customers. According to Ms. Anh, she had a lot of difficulties when started
to work without training and her performance was very bad in several months. So she think
training is very important for her job. As Ms. Mi said with strong skills, collectors can resolve
overdue loans in early stages, prevent accounts move to higher buckets that cause bad debt,
then achieve their target and also save the bank from loss of bad loans. Besides, Mr. Dong said
that he thinks training in very first steps make staffs more confident in work, but without
training, like Ms. Anh, he had bad performance and also met many difficulties in work.
To sum up, based on in-depth interviews, bad training skill in debt recovery and
verification of Risk Management Department can be considered as main problem that impacted
to NPL rate of retail segment at this time.
3.3. The importance of main problem
“Training is generally considered as tool which is used to enhance individual skills,

knowledge and abilities of a resource, and to enable that person to understand certain aspects
of business” (4). Training will help employees to release frustration and anxiety caused by
heavy workload and help them to enhance the productivity in work (5). According to Bolotbek
Orokov, Dan Durning and Sergei Pushkarev (6) “training was considered to be job-focused,
limited to the technical skills and abilities needed by public employees to perform specific
tasks”, also stated that isolated experience may not contribute to the success of organization.
Therefore, if Collection and Verification department still assign experienced staffs to train for
new one without specializing training team, it will continue negatively impact to performance’s
departments, especially in NPL rate then affect to the VP Bank’s profit. Besides, training is
one of popular methods to enhance productivity and performance of employees (7) and also,
as Wambugu Martha Karungari (4) with the right kind of operatives, well trained and
knowledgeable, more debt is recovered. In fact, employees being trained being able to build
new skills and improve work efficiency. According to Ms. Oanh if verification staffs is trained
professionally, they will be able to identify loans with signs of fraud or high risk then reject
these applications then avoid the difficulty of debt recovery in the future, even prevent the loan
from becoming bad debt which causing loss to the bank. Obviously, continuous internal
training will lead to a cohesive and loyal staff and can elevate themselves in more challenging
roles. Hence, finding proper solutions for the problem of bad training skill in debt recovery and
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verification is able to improve NPL rate in Risk Management Department is necessary as of
now.
4. Cause justification
4.1. Possible causes
With previous analysis in addition with literature review, there are four potential causes
of the main problem is updated in Cause-effect map of Risk Management Department at
Diagram 2 as below:

Diagram 2: Updated Cause-effect map of Risk Management Department

4.1.1. Lack of training document
According to the observation and confirmation of managers and staffs at Collection and
Verification department, both of these departments have not yet had any documents to train
new employees as well as references for current employees. In fact, training materials are one
of the factors that play an important role in the success of the training, providing information
for the staff's skills and serving the management. Therefore, it is necessary for these two
departments to have materials for training. The lacking of training materials is the cause of bad
training skill for debt recovery staffs and loan appraisal staffs.
4.1.2. No department specializing in training
According to the staff and managers at the Collection and Verification department,
these two departments currently do not have a team specializing in skill training for employees.
They often instruct experienced staff to guide new employees, this is known as on-job training.
On job training is taken place at actual working place of employee while they perform actual
job (4) and this is considered as the tool to enhance satisfaction of staff (8). However, with
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different knowledge and experience of trainers, also the constraint of training time , this method
is ineffective at these departments.
4.1.3. Uneven knowledge of instructors
As Dev G. Raheja (9), people play an important role in organization system. It can be
seen that human factor is always the leading determinant, directly controlling the training
process in the business. Human factor not only refers to the trainers and trainees but also the
management staffs. Professional qualifications and professional capacity of of trainers are key
success factors in training. But if the trainers is unprofessional or have weak skill or different
experience… will have a negative impact on the quality of training. In fact, effectiveness of
training depends upon the knowledge and skill of the trainers, but currently Collection and
Verification department is assigning senior staffs who have different skills, knowledge and
performance to train new staffs, as the result, it will cause the conveying knowledge in a
heterogeneous way, then impact directly to performance of staffs. Besides, this kind of training

is not systematic, the instructors have no expertise in training so limited in the instruction
process, making the training results limited.
4.1.4. Lack of cost for training
According to Arshad Ahmad et all (10), the importance of training and cost of training
are obvious. Many companies want to reduce costs which is considered as losses, to use the
budget for business. However, in the current economic integration period, cutting down the
cost of training solutions incorrectly will have no small consequences (11) like employees do
not meet the skills when working causing the development of the business to go down, the
quality decreases, the fewer training, the more turnover rate and the work is interrupted
continuously causing stagnation in business activities, spending cost to hire highly qualified
employees (long-term experience) with a high salary to grow their business. VP Bank is not an
exception, in some departments, the investment costs in training employees has not been taken
seriously which leads to a situation where there is no training team like in the case of Debt
Collection Center and Verification Department.
4.2. Validating causes
Based on above analysis and in-depth interviews, many employees in Risk
Management Department have emphasized the importance of having team specializing in
training in Collection and Verification department and the knowledge of instructors. More
specifically, Ms. Ngoc shared that in one of her business trip, she found that there is no training
to train for new staffs and also coaching current staffs in Collection and Verification
department. Furthermore, Ms. Mi and Ms. Oanh clarified that instead of having training team,
16


their department assigned senior staffs to spend 2-3 days to attach new staffs to train them and
guide them basic knowledge or skill to work with customer and they also do not have quality
control team to evaluate staff’s performance to provide prompt feedback or coaching. Ms. Anh
who have one year experience at Collection Center of VP Bank also told that when she started
to work, her manager assigned one senior staff to be her mentor to guide her how to use system
and support her in handling customer’s enquiries. Moreover, Mr. Dong believed that training

in very first steps make staffs more confident in work.
In fact, each employees have a different background of knowledge and skills, if not
equipped with a systematic knowledge when starting work, they can easily be conveyed some
non-advanced experience skill manipulations. Furthermore, due to the changing of technology,
volatility of the job market ... but the old job skills are no longer appropriate, so companies
have to re-train staff continuously with new knowledge to take on work. For those employees
who have been fulfilling their duties well, equipping them with knowledge and experience so
that they have the opportunity to develop higher positions in the future. Accordingly,
professional training not only helps employees increase their work efficiency but also
positively impact the company's performance. A survey found that 40% of employees quit their
jobs in the first year if they received poor vocational training. High turnover rate is very
expensive for the business in many ways - not just the cost of hiring new people, but also the
lost knowledge, wasting time, etc. Providing good training to employees may retain them to
the company. Therefore, the establishment of a team specializing in training or hiring external
partner to train staffs is a necessary requirement for Debt Collection Center and Verification
Department.
Professional qualifications of trainers are very important. But if that person is
unprofessional, their skill or knowledge is not strong enough will cause bad impact on the
quality of training. The quality of trainers with sufficient qualifications and ability is a key
factor affecting the quality of training.
Based on the summarized information from the interviews and the above validations,
no department specializing in training and uneven knowledge of instructors or trainers can be
identified as main causes of bad training skill in the department. In short, according to all
previous analysis, the final cause-effect map will be shown as below.

17


Diagram 3: Final Cause-effect map of Risk Management Department
5. Alternative solution and action plan

Recently, VP Bank have considered credit risk management for enterprises and there
are many measures to limit credit risks, but the results are not as expected. Finding positive
solutions to enhance the credit risk management system for the bank is always urgent and
important in long-term. After analyzing the potential cause of the main problem of Collection
and Verification of retail segment of VP Bank “Bad training skill in debt recovery and
verification”, it is obviously that these departments need to find proper solutions and take
appropriate action as soon as possible to solve this problem.
In fact, many staffs in Collection and Verification department complained about having
no training team in their department, emphasize the impact on performance of staffs without
training and mentioned about the crucial of having training team to support their job. Besides,
as Ms. Mi – Senior Debt Collection Officer, assigning senior staffs to attach and guide for new
staffs also affect the quality of training due to the difference of skill and knowledge of these
senior staffs. It can be seen that through training staffs will be supplemented with professional
knowledge and skills to perform better the assigned work. Training also helps staffs having
better understand the work, better grasp about operations, handle situations well at work, work
more self-conscious, have a better working attitude, improve their adaptability in the future.
Since then, the quality and efficiency of work is enhanced. In addition, for new staffs who are
not familiar with the job, training will help them get used to the job; mastering organizational
structure and functions, help them equip additional knowledge and skills needed to complete
the task assigned. However, due to the limitation of cost for operation, it is necessary to identify

18


the best solution and considered carefully in terms of expenses to meet the actual need of
department and also save cost for the bank.
In fact, the investment in existing human resources training and development in
Collection and Verification department is not well prepared and currently these departments
do not have a strategy for training and developing human resources, both short and long term,
in accordance with their development goals. Training activity in many enterprises shows that

giving employees new skills or knowledge not only helps them get things done faster and more
efficiently, but also improves their satisfaction at work and has the motivation to increase their
own performance. Employees are instructed to do a good job, they will have a confident
attitude, work more independently and proactively; on the contrary, they become depressed
and leave the company. Therefore, solving the problem in terms of training is essential and
practical.
To sum up, in order to solve two main factors causing the problem of bad training skill,
Collection and Verification department need to establish team specializing in training or
organize training for key staff before training for new employees. Below are three solutions
that I would like to propose in order for Collection and Verification department to overcome
the problem they are facing with the main solution is Propose to establish training team for
Verification and Collection department which can help these departments solve the problem in
the long term.
5.1. Solution 1: Propose to establish training team for Verification and Collection
department.
Hiring good people is not enough. Company should also provide the staff with support
and training so that they can develop the skills and work with best quality. That is the reason
for the training. However, this is the problem: due to limited resources and other priorities,
many department do not provide structured training plans. In fact, many companies seem to
ignore the importance of training for new employees in order to save costs. This not only
creates a workforce that lacks of professional skills, but also negatively impacts the psychology
of new employees, particularly many employees who are not trained before starting work so
having poor performance, causing depression from the beginning. Even many employees quit
their jobs very early because they could not catch up with the work.
In case of Collection and Verification department of VP Bank, these two departments
currently do not have a team specializing in skill training for employees. They often instruct
experienced staff to guide new employees. However, this method is ineffective at these
departments. As many employees in these departments have reflected, senior staffs who have
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different skill and knowledge, will spend 2-3 days to attach new staffs and guide them basic
knowledge and skill to handle customers, therefore, also affect the quality of training.
Training is an important activity that contributes to the survival and development of
each organization. Training help organizations get staffs adapted to environmental changes and
meet the requirements of implementing the strategic goals of the organization. Training is also
activity to meet the needs of development of staffs. When the basic needs of staffs of the
organization are acknowledged and guaranteed, they will work more fervently and efficiently.
Training is also a lucrative investment activity, because human resource development
and training are the powerful means to achieve the most effective organizational development.
Training will bring the following practical benefits:
For company:
+ Helping company improve labor productivity and business efficiency. Maintaining
and improving the quality of human resources, creating competitive advantages for businesses;
+ Solve organizational problems. Training and development can help administrators
solve issues of conflict, set policies on human resource management effectively;
+ Guide work for new employees. New employees often face many difficulties and
surprises in the early days of working in organizations, businesses. Work-oriented programs
for new employees will help them quickly adapt to the new working environment of enterprise;
+ Training and development helps employees acquire the necessary skills for promotion
and replacement opportunities for managers and professionals when needed;
+ Improving stability for the organization: The organization will not be disturbed when
there are changes in personnel, changing production and business environment because the
training have created reserves, prepare skilled and professional human resources to meet the
requirements of the new situation;
+ Reduce the cost of management and supervision: Trained workers will understand
and stick with the work with the organization, thus reducing the requirements and costs of
supervision and management.
For employees:
+ Create professionalism and attachment between employees and company;

+ Directly helps employees perform better jobs, especially when employees perform
jobs that do not meet standards, or when employees receive new jobs;
+ Updating skills and new knowledge for employees, enabling them to successfully
apply technological and technical changes;

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+ Meet the needs and aspirations of employees for their development. Equip them with
the necessary professional skills will stimulate employees to perform better jobs, achieve better
achievements, want to be given more challenging tasks with more advancement opportunities;
+ Create for employees a new way of thinking in their work, which is also the basis for
promoting the creativity of employees in their work;
+ Improving the quality of work performance;
+ Increase the adaptability of employees in organization;
+ Expanding the ability to cooperate in work;
+ Reducing technical errors.
Recognizing that many issues existed with no team specializing in training in the
department, there are some steps that managers consider as followings:

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