Enhancing the management and operational capacity of people's credit funds.

With advantages such as local knowledge, low operating costs, and a focus on mutual support among members, the development of grassroots people's credit funds (PCFs) in the province over the past period has been of significant importance in providing capital for local socio -economic development, reducing usurious lending, and contributing to the stability of local security and order.

The Minh Phuong Ward People's Credit Fund in Viet Tri City is increasing investment in resources and improving the skills of its staff to meet the demands of the new situation.

Accelerate restructuring for development.

The operations of the People's Credit Fund system primarily involve deposit mobilization and lending. Besides the inherent risks from customers, ethical risks are also a significant concern. Therefore, restructuring to ensure the safe and efficient development of the People's Credit Fund system is a crucial and inseparable task aimed at overcoming inherent limitations, sanitizing the financial market, and strengthening the operational capacity of each fund as well as the entire system.

Recognizing this importance, the restructuring of the People's Credit Fund system in the province has been implemented continuously, from the implementation of the Project on Restructuring the System of Credit Institutions in the period 2011-2015, the Project on Restructuring the System of Credit Institutions associated with handling bad debts in the period 2016-2020, to the present, the Project on Restructuring the System of Credit Institutions associated with handling bad debts in the period 2021-2025, with orientation to 2030; especially the implementation of Directive 06/CT-TTg, dated March 12, 2019, of the Prime Minister on strengthening solutions to ensure operational safety and consolidate the People's Credit Fund system. The State Bank of Vietnam's provincial branch has proactively classified funds with potential risks to develop appropriate solutions.

Simultaneously, research and develop groundbreaking strategies to serve management work, focusing on building an information connectivity system between the State Bank of Vietnam and the funds, guiding funds to operate according to loan portfolio size, organizing plans to expand operating areas, reorganizing operations after administrative boundary mergers, and setting salary guidelines...

In addition, the State Bank of Vietnam's provincial branch has assigned and arranged many officers to monitor and manage, coordinate with relevant units to support the operations of the People's Credit Funds, and strengthen on-site visits to understand difficulties and obstacles in order to direct the resolution of requests within its authority.

Furthermore, the State Bank of Vietnam's provincial branch also conducts inspections and supervision to promptly detect, warn against, and handle violations of the law, and impose administrative penalties... aiming to ensure the safe and healthy development of the People's Credit Fund system. This protects the legitimate rights and interests of depositors and customers, contributes to curbing usurious lending, and enhances public confidence in the People's Credit Fund system in the area.

As one of the first six funds established in the province, Mr. Nguyen Van Minh - Chairman of the Board of Directors of Duu Lau People's Credit Fund, Viet Tri City, shared: In monetary business operations, restructuring is always a top priority for the fund. The fund closely follows and implements the restructuring plan in conjunction with handling bad debts, strengthening administrative procedure reforms, building a communication culture; actively training and developing the professional capacity and ethics of its staff, always leading in the application of information technology, and actively deploying digital banking services... In its operational activities, the fund proactively grasps the market to adjust deposit and loan interest rates appropriately, proposing many solutions to improve credit quality as well as promptly resolving difficulties for borrowers... Therefore, the quality and efficiency of the fund's operations are increasingly improved, and the people trust and support the fund.

In practice, it has been observed that not only the Dữu Lâu People's Credit Fund but the entire system has consistently implemented restructuring with a focus on strengthening, rectifying, consolidating, and improving safety and efficiency, while simultaneously expanding new funds in rural areas; ensuring that the funds comply with the regulations of the Law on Credit Institutions and the Law on Cooperatives; and respecting the principles of voluntariness, autonomy, self-responsibility, mutual benefit, cooperation, and community development, primarily aimed at mutual assistance among fund members.

The funds focus on improving financial capacity, management and operational capabilities, professional expertise, and bad debt resolution, gradually diversifying their business activities. Therefore, despite facing difficulties, the funds in the province operate effectively, develop stably, and generally meet credit quality standards.

Enhancing the management and operational capacity of people's credit funds.

The Hung Viet People's Credit Fund in Cam Khe district inspected the use of loan capital for livestock development by member Nguyen Manh Dung in Phu Xuan area, Hung Viet commune.

Building an increasingly robust system.

With the synchronized involvement of the entire political system and the decisive direction of the banking sector, the province now has 39 funds and 16 transaction offices. Total operating capital exceeds 8,000 billion VND, outstanding loans exceed 6,400 billion VND with over 53,000 members, and charter capital exceeds 325 billion VND; bad debts are under control; all funds have spacious offices with equipment meeting requirements; 100% of funds apply information technology in transaction activities, and 36 out of 39 funds participate in the CF-eBank electronic money transfer system...

To build an increasingly robust and developed fund system, in the coming period, the State Bank of Vietnam's provincial branch will continue to focus on reviewing, consolidating, and rectifying the entire system of people's credit funds to ensure stability, safety, soundness, and efficiency, and to enhance governance and operational capacity commensurate with the scale of operations.

Alongside addressing existing shortcomings and limitations, it is crucial to strengthen state management of the People's Credit Fund system through supervision, inspection, and auditing, contributing to preventing and mitigating potential risks and ensuring the safety of the People's Credit Fund system in particular, and the safety of credit institutions in general.

Implement mechanisms and policies to link responsibilities and benefits among members of People's Credit Funds, and to establish connections between People's Credit Funds and Cooperative Banks, People's Credit Fund Associations, and Reserve Funds to develop the People's Credit Fund system. Continue to strengthen support activities in case of liquidity risks and mutual assistance in the operation of People's Credit Funds in the province...

The People's Credit Fund system focuses on improving governance, management, and internal control capabilities, developing and implementing internal rules and regulations, ensuring liquidity, developing risk provisions, implementing restructuring, and handling bad debts.

Mr. Pham Truong Giang, Director of the State Bank of Vietnam's provincial branch, emphasized: The fund system continues to affirm its position as a new, effective cooperative economic model in the monetary and credit sector. Accordingly, the funds will continue to accelerate restructuring associated with handling bad debts in the 2021-2025 period, with a vision to 2030; strengthen and develop in accordance with the objectives and principles of operation as stipulated by law and international practices; operate safely, efficiently, stably, and sustainably, meeting capital needs and improving access to finance for members, primarily aiming at mutual support and assistance in production, business, and improving living standards. The funds continue to enhance their capacity, gradually digitizing their management and operational activities according to the roadmap and plan of the State Bank of Vietnam and the province on digital transformation... This contributes to sustainable poverty reduction, limits usurious lending, ensures social security, and promotes the socio-economic development of the locality.

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