With more than 45,000 members of 25 people's credit funds (PCFs), this is a large and widespread number of people participating in collective economic activities in the province. Therefore, the State Bank of Vietnam (SBV) regularly monitors and inspects to support PCFs to operate stably, limit errors, improve competitiveness and develop sustainably...
Model contributes to poverty reduction
Like other credit institutions (CIs) in the province, in the past time, due to the impact of the Covid-19 pandemic, QTDND has encountered many difficulties in its operations, especially unstable fluctuations in the market and production and business activities. However, with efforts and active support from local authorities and branches, and the Cooperative Bank Branch, QTDND has closely followed the direction of the State Bank to well implement its tasks, ensuring that the QTDND system in the area continues to develop stably, contributing to promoting local socio-economic development. The outstanding results are that financial capacity as well as management and operation capacity have been enhanced, and QTDND operations have been gradually diversified. QTDND officers have met the conditions and standards, QTDND has been more active in reviewing, amending and supplementing internal regulations, and at the same time paying attention to studying legal provisions to apply in professional activities.
Thanks to that, business activities continued to develop stably, safely and effectively. Most of the People's Credit Funds have paid attention to controlling bad debts well, with a low bad debt ratio (0.87%), and credit quality indicators generally meeting requirements. The People's Credit Funds have organized member congresses, elected key personnel to ensure order and procedures in accordance with legal regulations, and developed and approved a basic restructuring plan closely following the instructions of the provincial State Bank. The State Bank of Binh Thuan has proactively monitored and closely supervised the People's Credit Funds, effectively managed the People's Credit Funds, supported the removal of difficulties and created conditions for the People's Credit Funds to develop sustainably. Every year, the State Bank of Binh Thuan reviews, evaluates and classifies each People's Credit Fund. Based on the classification, the State Bank of Binh Thuan has classified the People's Credit Funds in the area into 2 groups: Group of People's Credit Funds operating normally and Group of People's Credit Funds operating poorly, with many potential risks that could affect the safety of banking operations, security, and social order in the locality to apply appropriate forms of management, supervision, and handling such as enhanced supervision, early intervention, special control, etc.
In addition to remote monitoring, timely detection and warning of risks and violations during the operation of the People's Credit Fund, the State Bank of Binh Thuan has increased direct inspection and examination of the People's Credit Funds in the area. The inspection frequency according to the direction of the State Bank of Vietnam is to re-inspect after 3 years for funds that are assessed to be operating normally through supervision and consider more inspections for funds that are assessed to have high potential risks through remote monitoring, and are rated as average or weak. Up to now, the whole province has 45,548 people participating in the People's Credit Fund, an increase of 1,199 members compared to 2023. Of which, individual members are 39,801, household members are 5,734, and legal entity members are 13. The total capital of 25 QTDNDs reached 3,431 billion VND, an increase of 253 billion VND, equivalent to an increase of 7.98% compared to 2023. Of which, the charter capital was 121 billion VND, an increase of 16 billion VND, an increase of 15.5% compared to 2023.
Mr. Phan Thanh En - Director of the State Bank of Vietnam, Binh Thuan Branch, said: Through practical activities, it has been proven that the People's Credit Funds are an effective collective economic model, supported by the majority of people, contributing to hunger eradication and poverty reduction, an effective capital channel, both directly mobilizing resources and solving lending for production and consumption, meeting the needs of people to deposit and borrow money, developing the local economy, pushing back black credit and usury, stabilizing political security, especially in rural areas.
Strengthening support for QTDND to improve competitiveness
Despite achieving certain results, the People's Credit Funds still face many difficulties such as human resources, digital transformation... leading to some funds having to be put under special control such as the People's Credit Fund of Duc Hanh. Through supervision and inspection, the Provincial State Bank has put the People's Credit Fund of Duc Hanh under special control. During that process, the Special Control Board has directed, guided, and supervised the People's Credit Fund to develop and implement plans to strengthen its organization and operations. The Provincial State Bank has coordinated with local Party committees and authorities to strengthen propaganda, mobilization, and search for personnel to replace key officials who have violated the law. There are opinions on transferring personnel to do professional work; advising and proposing to local Party committees and authorities to direct all levels and sectors to support the fund in implementing solutions, in order to gradually stabilize the fund's operations, stabilize security, politics and social order in the area. After 5 years of efforts to fully meet the conditions, Duc Hanh People's Credit Fund was released from special control in November 2020...
In addition to traditional capital mobilization and lending products, some service activities are also effectively implemented by QTDNDs such as providing payment services, money transfer, performing collection and payment services for members, etc. The business processes are mastered by QTDNDs staff and work is handled quickly, correctly, safely and conveniently for customers, thereby generating a part of revenue from service activities. Although the management, operation and financial capacity are strengthened, the competitiveness of QTDNDs in capital mobilization, lending and providing other banking services compared to commercial bank branches is still limited, especially for QTDNDs operating in urban areas, it is even more difficult when there are many branches and bank transaction offices operating, competing and sharing the market. The reason is that the QTDND in Binh Thuan province has a small scale of operation, weak financial resources, the products and services provided are mainly traditional services such as capital mobilization, lending...; facilities, information technology infrastructure, network systems, servers, and software are still limited.
To effectively carry out the tasks, restructure the system of credit institutions (CIs) according to the Project "Restructuring CIs associated with bad debt settlement in the period 2021 - 2025", the action plan of the banking industry and continue to operate effectively, implementing the main goal of supporting members, the People's Credit Funds need to focus on implementing the following contents. Specifically, consolidating operations in accordance with the principles and purposes; improving the capacity of governance, operation, control, and internal audit. At the same time, improving the quality of products, services and care for People's Credit Fund members; Strengthening the application of Information Technology...
Source: https://baobinhthuan.com.vn/thuong-xuyen-giam-sat-de-nang-cao-chat-luong-hoat-dong-quy-tin-dung-125256.html
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