Open AccessDealing With Non-Performing Loans During The Bank Restructuring Process in Vietnam: Assessment Using The AHP and TOPSIS Methods
Author(s) -
Anh Thi Van Tran,
Nhung Nguyen,
Tu Thi Thanh Tran
Publication year - 2020
Publication title -
gadjah mada international journal of business
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.192
H-Index - 9
eISSN - 2338-7238
pISSN - 1411-1128
DOI - 10.22146/gamaijb.44453
Subject(s) - non performing loan , analytic hierarchy process , loan , topsis , bad debt , restructuring , vietnamese , collateral , business , order (exchange) , debt , actuarial science , computer science , finance , operations research , engineering , linguistics , philosophy
This article aims to assess the solutions that have been implemented in Vietnam to deal with non-performing loan(s) (NPLs) in the banking system. By trying to build evaluation criteria through a literature review and an expert survey, as well as using the analytic hierarchy process (AHP) and technique for order preference by similarity to ideal solution (TOPSIS), this research measures the effectiveness of the resolution of NPLs in Vietnam through many factors. The empirical results show that, in the past, the banking system in Vietnam has not dealt very well with bad debt, as it mostly uses traditional methods such as NPL write-offs by loan loss reserves or the liquidation of collateral. Based on our consideration of the NPLs’ resolutions that the Vietnamese banking system has implemented recently, we propose some suggestions to improve the necessary conditions for applying more market-based solutions, such as debt-equity swaps and securitization to thoroughly resolve the NPLs in Vietnam