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The introduction chapter provides background information and introductory knowledge about the research topic, what will be studied and analyzed in this research. In other words, this chapter is the foundation for later chapters to follow. As such, all the problems and issues mentioned in this chapter are to be resolved in succession along the way of the dissertation. Areas include statements problems on research, objectives of the research, research questions, research outcome and preview of the research study.


Overview of the Bank for Investment and Development of Vietnam

The Bank for Investment and Development of Vietnam (BIDV) is one of the five largest State-owned commercial banks in Vietnam. According to ratings published by Asia-week magazine, BIDV ranks at 351th (Vietnam commercial bank system entrance list of 500 largest Asia with 4 banks: BIDV, Vietnam Bank for Agriculture (ranking 335th), Bank of Foreign Trade of Viet (ranking 345th), and Indl. & Coml. Bank of Vietnam (ranking 347th)).

BIDV was established on 26 April 1957 under Decision No. 177/TTg dated 26th April, 1957 by the Prime Minister as the Bank for Construction of Vietnam and it adopted its present name on 14 November 1990. Bank total assets reaches to more than USD14 billion and the revenue in 2008 is about USD 500 million, increase more 7% than in 2007. At the end of December 2008, BIDV has 1 headquarter (Hanoi), 2 representative offices, 3 transaction centres, 105 branches nationwide and more than 400 local transaction offices all over Vietnam; BIDV's total employees is nearly 130,000.

BIDV functions as a universal commercial bank providing a full range of currency, credit, banking and non-banking services, and acting as authorized agency funding projects with sources from domestic and international financial institutions. With its experience investing in key projects, BIDV plays the leading role in development investment and project financing in Vietnam.

Figure1.1: Number of BIDV's branch and transaction office in Vietnam

Source: the researcher

(Adapted from the statistics of BIDV, 2008)

Overview of operation of BIDV PhuYen

Problem statement

The economy cannot develop if it is not invested and investment plays the key of foundation of the economic development. Evaluating investment project in lending activities is the most basis form and most efficient measure to bring out the effective results and reducing its risks.

After the WTO accession, with other industries, finance and banking industry in Vietnam achieved some significant success: high growth speed, revenue increasing, expanding more new banks, etc. But in Vietnam banking there are still many shortcomings in regulation, laws, policies to demand of rapid developing. Moreover, in operation of banking, there are a lot of potential risks that affect on operation and benefit of banks. So the banks need to have specific solutions to resolve these risks. BIDV PhuYen is a local bank with small size and limited capital. Furthermore, because it is a local bank in a province in Vietnam so the evaluating investment process is still weak. There is also lack of management skill, information technology, not strict in credit analysis and so on. Hence, the quality of evaluating investment project affects directly on making investment decisions and it is very necessary not only for benefits of bank but also benefits for area economic development.

Research objective

Since evaluating investment project in lending activities is more and more importance in the operation of banking system in Vietnam, BIDV PhuYen itself has to meet in terms of requirement in investment appraisal. Therefore, the purpose of this dissertation is giving out the current problems of investment appraisal in BIDV PhuYen. Then from these situations, the solutions for improving the evaluating investment project in landing activities will be recommended. In particular, the dissertation has four objectives:

  1. Introduce the overview the operation of evaluating investment in BIDV PhuYen in current years
  2. Analyze the data and information; result the effective or ineffective of the investment evaluation
  3. Find the reasons which are the obstacles in investment appraisal of BIDV PhuYen
  4. Based on the above results, recommend the effective solutions to enhance the evaluating investment project in lending activities in bank

Scope of the research

The process of evaluating investment project in lending activities in banks has several aspects such as profile appraisal, loan customer appraisal, financial appraisal and insurance for lending appraisal, etc. In this dissertation, because of lack of time and experience, researcher focuses on the financial appraisal and some non-financial factors can affect on the operation of the evaluating investment project in BIDV PhuYen.

Research question

With a view of evaluating investment project and from the research objective, these listed questions are set to fulfill as the basis of studying and making the suggestions for its improvement efficiency.

Question 1: How do BIDV PhuYen‘s officers perform the evaluating investment in lending activities?

The reason for this question is to understand the evaluation process of BIDV PhuYen to make investment decisions in the past few years.

Question 2: How can they manage to improve the investment appraisal?

The purpose of this question is the researcher want to know BIDV PhuYen do or do not improve their evaluating investment process in different time (from the past to now), and also want to know the way they improve the process if they do.

Question 3: Which methods are the most efficient to analyze and evaluate the projects that BIDV PhuYen invests in recent years?

The researcher want to know what are the normally techniques that BIDV PhuYen uses for evaluating of investment projects and those techniques are up-to-date or not.

Question 4: What are the obstacles in investment appraisal of BIDV PhuYen?

This question‘s purpose is to find out which can be the barriers when BIDV PhuYen do their evaluating investment projects. And from the results, the researcher will offer the solutions to improve the investment appraisal for BIDV PhuYen.

Research outcome

This research will give reader an overview about the performance of BIDV PhuYen in evaluating investment projects in lending activities in current years. From that, it is pointed out the current problems and disadvantages in their process of investment evaluation, it is lacks of reasonable techniques for financial appraisal, and staffs are lack of credit assessment skills and so on. This research also help managers have a good view about investment evaluation skills and know the way to manage sensibly of setting a problem.

Structure of the report

For the sake of clearness, the report will be separated into the following elements, as specified in the figure 1.2:

Figure 1.2: the mind map of the research

Chapter I


Chapter III

Research methodology

Chapter II

Literature review

Chapter IV


Chapter V


Chapter I: Introduction overview the operation of BIDV and particular BIDV PhuYen, a statement of purpose and specific aims of study, problem statement (inclusive of relevant theory and research) and the research questions.

Chapter II: Review of literature including relevant theory on the lending activities in banking, the evaluating investment project of bank and review of previous studies in the area of research.

Chapter III: Prescribe the methodology that clearly outlines the approach adopted, the methods used and depth of analysis to be conducted. It details “how” the solution of the research problem will be sought, created and produced.

Chapter IV: Analyses the efficiency of the investment evaluation from primary data and secondary data collected based on the prescribe methodology to reach a conclusion about the research problem. Results of research also are illustrated by charts, tables, etc. From the findings, recommendations for improving the evaluating investment project in BIDV will be provided.

Chapter V: Describe and summarize the conclusion reached. It interprets the analytical results to solve the research problem. It also presents the research limitation, difficulties encountered and recommendations for future research.


This chapter represents the outline for the purpose of this research. The objective and scope of the research are clearly stated to the orient the dissertation to follow in a rational and logic way. Moreover, questions and hypothesis based on the research problems are enumerated which will be analyzed in later chapters. In line with the aim to study evaluating investment projects in BIDV PhuYen, the structure of the research provides a mindset and approaches to find the effective solutions to better improve the evaluating investment projects in bank

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