People's credit funds in the digital transformation process.

The digitalization process has been opening up new avenues for people's credit funds, helping cooperative credit organizations become closer to the people, even in the digital age...

Technology contributes to risk management and transparency of capital flows.

In the context of digital transformation becoming an inevitable trend in the banking industry, the people's credit fund system is also gradually changing to adapt, improve operational efficiency, and better serve the capital and financial service needs of the people.

In the Central and Central Highlands region, the State Bank of Vietnam's Regional Branch 10 is managing and supervising the operations of 60 People's Credit Funds (PCFs), including 7 in Khanh Hoa and 53 in Lam Dong. Over the years, the PCFs in these two provinces have developed in accordance with the principles and objectives of the cooperative credit institution model, ensuring safety, efficiency, stability, and sustainability. Through providing capital, the PCFs have contributed to curbing illegal lending, supporting agricultural and rural development, ensuring social security, and achieving sustainable poverty reduction in the localities.

Currently, there are 60 People's Credit Funds operating in the two provinces of Khanh Hoa and Lam Dong.

A positive sign is that recently, the capital mobilized from savings deposits of people's credit funds has grown significantly, while the demand for loans from the Vietnam Cooperative Bank (VCB) has tended to decrease. This reflects the increasing confidence of the people in the people's credit fund system, and at the same time helps the funds become more proactive in terms of capital sources, reducing their dependence on loan support.

Regarding capital utilization, the outstanding credit balance of the People's Credit Fund system in the area is mainly concentrated on lending to members, with short-term loans serving production and business in the fields of agriculture, fisheries, forestry, etc. This capital flow not only helps members develop their household economies and improve their lives, but also makes a practical contribution to the goal of agricultural and rural development in accordance with the policies of the Party and the State.

During their operations, the Cooperative Bank branches in Binh Thuan, Lam Dong, Binh Dinh, Dak Lak, etc., have effectively played their role as "banks for People's Credit Funds," providing timely capital support, applying appropriate interest rate policies, and strengthening inspection, supervision, and risk warnings to help People's Credit Funds rectify and comply with legal regulations.

Many people's credit funds have focused on applying information technology and implementing digital solutions in loan management and monitoring…

Besides strengthening their financial capacity, many People's Credit Funds in Khanh Hoa and Lam Dong provinces have proactively invested in upgrading facilities, building spacious offices, purchasing equipment, security monitoring systems, vaults, and data storage equipment in accordance with the regulations of the State Bank of Vietnam. This is an important foundation for the funds to gradually modernize their operations, enhance their image, and improve their position in the region.

Notably, many People's Credit Funds have focused on applying information technology and implementing digital solutions in loan management and monitoring. Through sending SMS messages or notifications via applications when transactions occur, reminding borrowers of repayment schedules, providing tools to check outstanding balances and transaction history, etc., the funds have helped members proactively monitor their loans, while also supporting the People's Credit Funds in improving management efficiency and reducing credit risks.

Gradually overcoming technological "bottlenecks" will help people's credit funds become closer to and more connected with the people.

Overcoming technological bottlenecks

At the B'Lao People's Credit Fund, a leading unit within the Lam Dong province's People's Credit Fund system, the harmonious combination of business efficiency and risk management is considered a key factor. According to Ms. Tran Thi Thanh Lan, Chairwoman of the Board of Directors, the fund consistently maintains a reasonable interest rate policy, ensuring the rights of depositors and supporting members in borrowing capital for production development. Simultaneously, strict adherence to legal limits and safety ratios has helped the fund achieve positive results, exceeding its planned targets.

Meanwhile, at the Nhon Hai People's Credit Fund, operating in Vinh Hai commune, Khanh Hoa province, digital transformation is being implemented in conjunction with communication and outreach to members. The fund has utilized social media platforms such as Zalo, Facebook, and the local broadcasting system to advise on banking products and services. In 2024, in coordination with the State Bank of Vietnam's Ninh Thuan (formerly) branch and the Cooperative Bank's Binh Thuan branch, the fund organized a cashless payment conference to support members in accessing digital banking services.

Developing a practical digital transformation guide, providing technical support, and training human resources for the funds are key solutions.

Currently, 1,042 members of the fund are using the Co-opBank Mobile Banking application. The average annual money transfer volume through the Cf-eBank system is nearly 200 billion VND. The information technology system has been invested in comprehensively, ensuring connectivity and reporting to support the State Bank of Vietnam's supervisory work.

Meanwhile, at the Ninh Hoa People's Credit Fund in Khanh Hoa province, despite its small scale of operation, the unit has proactively invested in information technology. According to Ms. Nguyen Thi Bich Thi, Head of the Supervisory Board, over the past two years, the fund has sent staff to participate in training courses on digital transformation, technology application, and artificial intelligence, invested in servers to ensure data security, significantly reduced manual processing time, and improved labor productivity. Notably, the fund also uses Zalo to provide interest rate information and debt reminders, and is gradually applying artificial intelligence in building communication content and customer care, with the motto "wherever the customer is, the credit fund is there."

The digitalization of people's credit funds is linked to the goal of achieving comprehensive financial inclusion…

However, in reality, the digitalization process of the People's Credit Fund system still faces many difficulties. Small operating scale, limited financial resources, and a lack of dedicated IT personnel hinder investment in modern digital infrastructure. Furthermore, the majority of members are farmers in rural and remote areas, resulting in uneven access to digital technology, and online services cannot yet completely replace traditional transaction methods.

Given this reality, to promote the sustainable digitalization of People's Credit Funds, a more coordinated effort is needed from the Association of People's Credit Funds, Cooperative Banks, and relevant agencies. Developing a practical digital transformation handbook, creating a shared core banking system, providing technical support, and training human resources are key solutions. At the same time, People's Credit Funds themselves need to continue improving their financial capacity, reducing costs, increasing investment in technology, and gradually forming a modern, safe, and efficient cooperative credit institution model that truly serves as a reliable financial support for people at the grassroots level.

Source: https://thoibaonganhang.vn/quy-tin-dung-nhan-dan-trong-dong-chay-chuyen-doi-so-175394.html