Duc Hong Vo*

The CBER - Research Centre in Business, Economics and Resources, Ho Chi Minh City Open University, Ho Chi Minh City, Vietnam

duc.vhong@ou.edu.vn

ORCID 0000-0001-7823-0349

*Corresponding author

Financial inclusion, corporate social responsibility and customer loyalty in the banking sector in Vietnam

Loan Thi-Hong Van

School of Advanced Study, Ho Chi Minh City Open University,

Ho Chi Minh City, Vietnam

loan.vth@ou.edu.vn 

ORCID 0000-0003-0118-3884

Luong Thi-Huyen Dinh

Sacombank, Vietnam

huyenluongdinhthi@gmail.com

Chi Minh Ho

The CBER - Research Centre in Business, Economics and Resources, Ho Chi Minh City Open University, Ho Chi Minh City, Vietnam

chi.hm@ou.edu.vn 

ORCID 0000-0002-6400-185X

Abstract. The banking sector in Vietnam is under enormous pressure today due to competition arising from the integration of Vietnamese economy into the world economy. Survival and success of this sector significantly depend on customer loyalty which has mostly been built on the recognition of banks' social responsibility and their provision of inclusive services, generally known as financial inclusion. The recognition of social responsibility from the banking sector and its strategy on financial inclusion has largely been ignored in current literature, in particular for Vietnam. This study has been conducted to examine the impact of corporate social responsibility (CSR), financial inclusion inter alia, on customer loyalty in the banking sector in Vietnam.  The pyramid model is utilized in this paper, including various CSR factors/attributes such as philanthropic responsibility, ethical responsibility, legal responsibility, economic responsibility, customers-centric strategy and bank reputation.  A sample of 368 responses to the well-defined questionnaires has been collected from the commercial banks in Vietnam in 2019. The structural equation modelling is utilized. The findings from this paper indicate that philanthropic responsibility of the banking sector has the most substantial impact on customer loyalty, followed by customer-centric strategy. Improving the aspects of CSR programs, in particular customer-centric strategy, will lead to improved extent of financial inclusion which currently attracts attention of Vietnamese government and practitioners. Doing so will improve the reputation of banks and enhance customer loyalty, thus preparing banks for competition in the near future.

Received: December, 2019

1st Revision: August, 2020

Accepted: December, 2020

DOI: 10.14254/2071-8330.2020/13-4/1

JEL Classification: L26, L69, M14

Keywords: financial inclusion, corporate social responsibility, customer loyalty, structural equation modelling, Vietnam