Many shortcomings in the legal basis for the operation of people's credit funds

(GLO)- Circular No. 29/2024/TT-NHNN, effective from July 1, 2024, is the legal basis for the operations of people's credit funds. However, some provisions in this Circular are becoming barriers, causing difficulties for credit funds, limiting access to capital for people and businesses.

The regulation that the People's Credit Fund (PCF) has an inter-commune operating area which is the communes adjacent to the commune where the PCF has its headquarters within the scope of a province or centrally-run city before July 1, 2024 is one of the regulations considered unreasonable in the current context of Circular No. 29/2024/TT-NHNN.

The case of QTDND Nhon Loc, An Nhon Tay commune is an example. This unit originally operated credit in Nhon Loc commune (where QTDND Nhon Loc's headquarters is located) and 3 neighboring communes: Nhon Tan, Nhon Phuc, and Nhon Tho (old).

Currently, Nhon Loc and Nhon Tan communes merged into An Nhon Tay commune, while Nhon Phuc and Nhon Tho communes merged into other wards located near An Nhon Tay commune and all under the scope of other QTDND activities. The change of administrative unit narrowed the scope of QTDND Nhon Loc, and at the same time, many other problems arose.

Credit activities at Nhon Loc People's Credit Fund. Photo: T.Sy

Ms. Dang Thi Nha - Chairwoman of the Board of Directors of Nhon Loc People's Credit Fund - said: There are many people and businesses in the two communes of Nhon Phuc and Nhon Tho (old) who are members and are depositing savings and borrowing capital at Nhon Loc People's Credit Fund. Therefore, the State Bank's (SBV) restriction on the scope of operations, along with the regulation that each person can only be a single member of one People's Credit Fund, has caused us to lose a large number of familiar customers, while they still want to stick with us.

This not only affects the fund's credit activities but also limits customers' access to capital. It is not easy to stop transactions and remove old members, because the customers have not violated anything. Moreover, they still have time to deposit savings and pay interest at QTDND Nhon Loc.

Circular No. 29/2024/TT-NHNN stipulating that each commune and ward has only one People's Credit Fund is also not suitable for reality, because after merging administrative units, many localities have 2 or even 3 People's Credit Funds operating at the same time.

Meanwhile, the State Bank has not yet provided specific guidance on whether to allow the People's Credit Funds to continue operating as before or to merge or dissolve some People's Credit Funds in the same commune or ward to ensure compliance with the above regulations.

Ms. Phan Nhu Bich Van - Director of Nhon Thanh People's Credit Fund (An Nhon Bac Ward) said: In addition to Nhon Thanh People's Credit Fund, there is also Nhon Hanh People's Credit Fund in the ward. While waiting for instructions from the State Bank, both People's Credit Funds still maintain credit activities in the old communes and wards. Currently, the plan of Nhon Thanh People's Credit Fund is also being applied by many People's Credit Funds in the province.

Many households in An Nhon Bac ward borrowed capital from Nhon Thanh People's Credit Fund to invest in developing ornamental mai trees. Photo: T.Sy

In addition, the State Bank's regulation that the People's Credit Fund requires borrowers to declare information of related people, including spouses, children and siblings on both paternal and maternal sides, is also difficult to implement and is a major barrier to the activities of the People's Credit Fund.

Especially for customers who need to borrow capital, have specific investment plans, but relatives live far away, are inconvenient or do not provide personal documents, making credit transactions impossible. This not only wastes time for QTDND and people, businesses but also erodes customers' trust in QTDND's services.

In order for QTDND to maximize its role in promoting the local economy and serving the community, management agencies need to listen to opinions from practice, thereby making timely adjustments suitable to the operation of this model.

Mr. Nguyen Tra Duong - Deputy Director of the State Bank of Vietnam, Region XI Branch - said: The Branch has grasped information on issues arising when applying Circular No. 29/2024/TT-NHNN and has compiled opinions from QTDNDs to send to the State Bank for consideration and decision.

Source: https://baogialai.com.vn/nhieu-bat-cap-trong-co-so-phap-ly-cho-hoat-dong-cua-quy-tin-dung-nhan-dan-post567004.html