Factors Affecting the Ability to Repay Debts of Corporations at Commercial Banks

Abstract

This study aims to estimate the influence of these factors on the ability of corporations to repay debts at commercial banks in Vietnam, especially in Ho Chi Minh City. Moreover, this study focuses on the period from 2018 to 2022. Hence, the effects of the COVID-19 pandemic were also examined in this study. In addition, this study employs a binary logistic regression method to analyze the extent of the factors' impact on the ability of corporate customers to repay debts. The results reveal that the model includes six statistically significant factors: collateral, loan term, income, firm size, leverage, net sales, and COVID-19. Furthermore, the model can be used to forecast corporations’ ability to repay debts, which could help commercial banks plan their loan strategies for corporate customers based on the significant results of the Hosmer-Lemeshow test. The study, on the other hand, only focused on some banks in the biggest city in the south of Vietnam, so further research on the area is needed, such as over Vietnam. Doi: 10.28991/ESJ-2024-08-03-016 Full Text: PDF

Keywords

• debts
• binary logistic
• commercial bank
• corporation
• repay.