GIS Assignment 3

Market Potential Profile Report

Tan Ying Da

In anticipation that people will gradually open bank accounts, in proportion to growing incomes and savings, we would be analysing the feasibility of opening bank branches at new locations to cater for retail (consumer) banking. We would focus on the savings growth for each district as our market potential parameter. Firstly, in Qspaitalite, we create a new column called SAVGROWTH in the District_Profile table and then export it into a TXT file.

We open the TXT file with MS Excel and save it into CSV format; not forgetting to create a CSVT file specifying the data types for it.

After that, we import the table into QGIS and join it with the District vector and save it as District_savgrowth.shp Shapefile before we import the vector containing the savings growth again.

We have a total of 658 unique values for the district savings growth. Using Sturges formula, we can derive the number of classes for classification.

k = 1 + 3.32 * log n = 1 + 3.32 * log(658) = 10(rounded) Since using more than 7 shades of a single colour for classification would dilute the middle ranges, we would choose 2 distinct colours (Orange and Purple) instead of one. As the range variation is very high between the lowest and highest savings growth values, we would use Natural Breaks (Jenks) as our classification method using natural groupings.

Finally, we compose 2 Choropleth maps to show the main outliers with reference to the ranges of district savings growth. We would also examine the potential centres nearest to the districts of interest.

From the Choropleth maps, we could see that the majority of the districts savings growth is at around 14 million and below (darker shades of orange) while gradually increasing as we move towards the Southern region (lighter shades of orange). This means that any districts coloured in darker shades of purple is definitely worth an in-depth investigation because of their extremely high savings growth (more than 100 million). Our recommendation is to consider the potential centre of Hanoi; near the districts of Quan Dong Da as well as potential centre of Ho Chi Minh City near Quan Tan Binh and Quan Binh Thanh. Other considerations would be due to the fact that those 2 potential centres are far apart across the Northern and Southern part of Vietnam (no cannibalisation would occur) and they are connected to the rest of the country as they lie in the vicinity of the railway line.

Bank Branch Network and Potential Revenue Estimation Report In this report, we would focus on the first potential bank branchs set up location. We would examine the attractiveness index of the potential centres by joining the Attractiveness index table to the PotentialCentre vector in QGIS.

As we examine the attractiveness of the potential centres, Hanoi and Ho Chi Minh City (HCMC) centres are the clear winners because of their extremely high attractiveness index score of 1000.

However, a clearer choice would be HCMC potential centre because it has the highest number of neighbouring districts with savings growth of more than 86 million (16 compared to just 4 districts around Hanoi).

We would be interested to investigate further by applying the Huff Gravity Model to measure the tendency of patronage to HCMC by populated places in the country.

First, we duplicate the PopulatedPlace_UTM while omitting unwanted columns and name it as PopulatedPlace_UTM_Huff_HCMC. This can be done easily using a select statement and the Create Spatial Table option from QspatiaLite.

A new column, DIST_2_HCMC is added and is updated with the distances (square km) between the populated places and HCMC potential centre.

We then create another 2 columns for the Huff Models numerator (Huff_AD) and probability followed by updating of the respective computations. Because we do not have a survey on consumers sensitivity to distance as well as attractiveness of banks, the Huff Models Alpha and Beta is set to arbitrary values of 1 and -0.5 respectively.

The new table is then loaded into QGIS.

After applying the classification on the patronage probability of HCMC, our map should look like this:

We assume that the top 2 tiers of patronage probability (>0.0011) would yield the highest chance of consumers in projected populated areas banking with the new HCMC bank branch. As such, we would like to find out the projected revenue made from consumer loans at the new HCMC branch. Assuming the growth rates of lending amounts between 2010 to 2014 and 2006 to 2010 in all districts are the same, we would compute a forecasted total household lending amount for 2014 and update it into a new LOAN2014 column in the District_Profile table in QSpatiaLite.

Based on the reported rates in the article: http://vietnambusiness.asia/consumer-loan-rate-remainshigh-in-vietnam/, we assume consumer loan interest rate for 2014 to be at a conservative rate of 13%. With that, we compute the projected 2014 consumer loan revenue derived from the interest rate for all districts and update them into the new LOANREV2014 column the District_Profile table.

Now that we have the projected 2014 consumer loan revenue for all districts, we can use spatial query to highlight the projected revenue for the new HCMC branch based on the patronage probability. First, we select the populated places where patronage probability for HCMC is more than 0.0011.

Then go to Plugins on the QGIS menu and select the Spatial Query function and set the conditions for the spatial query.

A result will be generated; create a new layer with the result list of items. The default vector layer name would be District <Contains> PopulatedPlace_UTM_Huff_HCMC.

After that, we export the latest District_Profile table from QSpatiaLite into TXT format and save as CSV format while creating a new CSVT file for it before loading it into QGIS and joining it to the District <Contains> PopulatedPlace_UTM_Huff_HCMC vector layer.

The newly joined vector layer needs to be saved as a new Shapefile and re-imported again before the Basic Statistics function can be used.

The forecasted potential revenue based on the patronage probability of its neighbouring populated places of the proposed bank branch at Ho Chi Minh City is about 73.1 million in year 2014. This amount however, does not take into account the revenue lost due to its competitors in the region.