Contributing to the fight against illegal lending in rural areas.

To attract members, contribute to community cohesion, and meet the demand for investment capital for production and business development in rural areas, most People's Credit Funds (PCFs) in the province have strived to innovate and improve the quality of their services; operating in accordance with their goals and principles. As a result, the operational quality of PCFs has become increasingly effective, promoting socio-economic development in the locality, contributing to combating illegal lending, and maintaining security and order in rural areas.

Contributing to the fight against illegal lending in rural areas. People come to borrow money at the Ngu Loc People's Credit Fund (Hau Loc).

The Ngu Loc People's Credit Fund (Hau Loc district) is a long-standing unit within the provincial People's Credit Fund system, boasting the largest operational scale. Currently, the Ngu Loc People's Credit Fund has 4,980 members operating across six communes: Ngu Loc, Minh Loc, Hung Loc, Hai Loc, Hoa Loc, and Phu Loc. Chairman of the Board of Directors, Nguyen Van Ngu, stated: "Throughout its operation, the fund has always prioritized the development of its members, creating the best conditions for people to access loans easily, simplifying loan procedures, and offering preferential interest rates on deposits and loans, promptly meeting the capital needs of people to expand production and develop their businesses." As of March 2024, the fund's total operating capital reached nearly 444 billion VND; total outstanding loans reached nearly 261 billion VND. Throughout the loan process, members have consistently demonstrated a commitment to using borrowed funds for their intended purpose and repaying both principal and interest on time. The fund's capital has supported member households in investing, developing production and business, and expanding service sectors, contributing to improving people's lives, developing the local economy, and combating usurious lending practices.

Visiting the seafood processing facility of Mr. Pham Van Long's family in Chien Thang village, Ngu Loc commune, we learned that from a small-scale, self-organized household, his family has expanded production thanks to loans from the Ngu Loc People's Credit Fund. Mr. Long shared: "Previously, due to limited capital, my family only traded seafood to serve the needs of local people. Thanks to the loan from the Ngu Loc People's Credit Fund, we were able to purchase equipment and expand production with two refrigerated trucks and two cold storage facilities for frozen seafood. Now, each year, my family's facility purchases hundreds of tons of seafood and sells it to many provinces and cities nationwide, creating regular jobs for 20 workers and dozens of seasonal workers."

Currently, there are 67 People's Credit Funds (PCFs) licensed to operate in 18 districts, towns, and cities in the province, with an average of 1,828 members per fund. As of early April 2024, the total operating capital of these funds reached nearly 8,700 billion VND; of which, charter capital was 387.9 billion VND, and mobilized deposits reached 7,695.2 billion VND... Total outstanding loans reached nearly 6,300 billion VND, with an average outstanding loan balance of 97.88 billion VND per fund. The credit quality of these funds is basically ensured, with the non-performing loan ratio within the permissible limit, accounting for 0.4% of the total outstanding loans. The practical operation of PCFs in localities has proven that this is an effective collective economic model, supported by a large number of people, contributing to poverty reduction, especially helping to limit usurious lending in rural areas. The operations of people's credit funds have met the basic objectives of mutual support among members and community development, while simultaneously covering costs, preserving capital, and accumulating reserves for growth. As a result, members' rights are protected, and people's credit funds have the conditions to accumulate capital for expansion and sustainable development.

To effectively utilize the capital of People's Credit Funds, in the coming period, the State Bank of Vietnam - Thanh Hoa Branch will continue to advise the Provincial People's Committee to direct the People's Committees of districts, towns, and cities, relevant departments and agencies, and the People's Committees of communes, wards, and townships with People's Credit Funds to coordinate with the State Bank of Vietnam Thanh Hoa to effectively implement Directive No. 06 dated March 12, 2019, of the Prime Minister on strengthening measures to ensure operational safety and consolidate the People's Credit Fund system; the Project on restructuring credit institutions associated with handling bad debts in the period 2021-2025; and the Project on consolidating and developing the People's Credit Fund system until 2020, with orientation to 2030. It will also continue to direct People's Credit Funds to implement solutions to strengthen financial capacity, improve governance, management, internal control, quality, and operational efficiency. Promoting the resolution of bad debts and credit growth should be accompanied by strengthened credit quality control.

At the same time, strengthen the linkages and mutual support among members to properly achieve the goals and principles in the operation of the People's Credit Funds. Strengthen supervision, inspection, and auditing of People's Credit Funds in the area to prevent, detect, and strictly handle risks, shortcomings, and violations of People's Credit Funds, helping the funds operate safely, effectively, in accordance with their goals and principles, and develop sustainably.

Text and photos: Minh Ha

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