A boost for people's credit funds.

People's credit funds in Da Nang city have been helping people access low-interest loans to develop their economy, creating new changes for rural areas.

People access banking services at the Go Noi People's Credit Fund. Photo: QUANG VIET

Da Nang City, along with the rest of the country, is implementing the restructuring of the people's credit fund system to create momentum for sustainable development in the future. Through the formation and development of the people's credit fund system, alongside outstanding achievements, some limitations have also emerged that need to be addressed.

Effective capital channels in rural areas

The People's Credit Fund system was established in 1993 with the goal of mobilizing resources from the community to help people access banking services for economic development, especially in agricultural, rural, and remote areas.

After more than 30 years of formation and development, the people's credit fund system nationwide in general, and in Da Nang city in particular, has expanded, increasing people's access to banking services...

Mr. Truong Van Cuong's household (Cam Phu village, Go Noi commune) borrowed 400 million VND from the Go Noi People's Credit Fund in 2024 to invest in raising 50 3B cows. To date, Mr. Cuong has sold one batch of 3B cows and is preparing to sell another batch. He bought each 3B cow for 20 million VND, and after 10 months of raising them in pens, he sells them for an average of 40 million VND each.

“I raise 3B cattle in the Go Noi riverside area, which has many advantages in terms of feed, fresh air, and I diligently care for the cattle, so they grow quickly and rarely get sick. After deducting expenses, each 3B cow brings in a profit of about 10 million VND when sold. We accessed low-interest loans from the Go Noi People's Credit Fund to invest in raising 3B cattle,” Mr. Cuong said.

Mr. Truong Van Cuong's household successfully raises 3B cattle using capital borrowed from the Go Noi People's Credit Fund. Photo: QUANG VIET

Ms. Nguyen Thi Hang Nga, Director of the Go Noi People's Credit Fund, said that the fund currently has 2,120 members contributing capital, providing loans to farmers in the Go Noi area with a maximum of 600 million VND and a minimum of 10 million VND to purchase agricultural supplies for livestock farming, crop cultivation, and investment in economic models. The lending interest rate of the Go Noi People's Credit Fund is 5.5% per year (lower than the interest rate for loans to poor households of the policy bank, which is 6.6% per year). Currently, the Go Noi People's Credit Fund has outstanding loans of 42 billion VND.

Mr. Dang Van Tinh, from the Planning and Inspection Department (Da Nang City Cooperative Union), said that in recent times, people's credit funds in the area have flexibly mobilized members, increased charter capital, and increased locally mobilized capital to meet the production and business needs of the people. The funds have ensured loans are used for the intended purpose, are effective, limit illegal lending, and help people build effective economic models.

Creating new impetus for development

Recently, the State Bank of Vietnam organized a workshop to gather broad opinions on the draft plan "Overall restructuring of the system of People's Credit Funds and Vietnam Cooperative Bank in the period 2025 - 2030, with orientation to 2045".

People's credit funds need new impetus for sustainable development and to promote socio-economic development in rural areas. (Illustration: QUANG VIET)

According to Deputy Governor of the State Bank of Vietnam, Doan Thai Son, the people's credit fund system, in addition to its outstanding achievements, has also revealed some limitations during its formation and development.

Specifically, the linkages between people's credit funds and cooperative banks are not strong; loan growth remains limited, and some people's credit funds even experience negative growth. Based on this reality, it is necessary to promptly recognize and assess the situation in order to restructure and improve the operations of the people's credit fund system, creating a major impetus for the socio-economic development of the country.

According to Deputy Governor of the State Bank of Vietnam, Doan Thai Son, the future operational orientation of the People's Credit Fund system will continue to uphold the principle of "mutual assistance," focusing on serving farmers, small-scale producers, especially vulnerable households, contributing to the goal of inclusive financial development. The overarching principle in the operation of the People's Credit Funds is to put the people at the center, ensuring that no one is left behind.

Mr. Pham Trong, Deputy Director of the State Bank of Vietnam, Region 9, believes that restructuring the people's credit fund system in Da Nang city is crucial to overcome limitations, build upon achievements, and create new impetus for the rapid and sustainable development of the people's credit fund system.

It is crucial to establish more new People's Credit Funds to act as a lever for the development of rural, remote, and disadvantaged areas. Accordingly, it is essential that these funds focus on regulating capital, supporting liquidity, controlling risks, providing technological services, and training human resources.

"People's credit funds in the area need to encourage the development of green credit products, credit supporting the transformation of high-tech agriculture, organic agriculture, and the development of a circular economy, thereby meeting the goal of developing ecological agriculture and modern rural areas, which is a major policy of Da Nang city," Mr. Trong said.

Currently, there are three People's Credit Funds operating in Da Nang City; in addition to the Go Noi People's Credit Fund, there are the Tay Dien Ban People's Credit Fund and the Dien Duong People's Credit Fund. To date, the total operating capital of the three People's Credit Funds is over 525 billion VND, attracting 13,428 members. In recent years, all three People's Credit Funds have been profitable, exceeding their annual targets, affirming their role as an effective channel for capital mobilization and lending in rural areas.

Source: https://baodanang.vn/luc-day-cho-cac-quy-tin-dung-nhan-dan-3265356.html