Promoting effective capital channels of the people's credit fund system

Comrade Bui Thanh An - Member of the Provincial Party Standing Committee, Vice Chairman of the Provincial People's Committee attended and gave a speech. Attending were representatives of leaders of relevant departments and branches, Deposit Insurance of the North Central region, Vietnam Cooperative Bank, and people's credit funds in the area.

Credit funds all operate effectively and profitably.

As of December 31, 2023, in Nghe An province, there are 59 People's Credit Funds licensed by the State Bank of Vietnam, Nghe An Branch, to establish and operate in 16 districts, towns and cities. The total operating capital of the funds in the area is VND 10,780 billion, an average of VND 182.7 billion/fund, an increase of 14% compared to the beginning of the year.

The mobilized capital from savings deposits as of December 31, 2023 was VND 9,665 billion, an increase of 15.78% compared to the beginning of the year, accounting for 89.6% of the total capital, reaching an average of VND 163.8 billion/fund. The mobilized capital increased significantly compared to the beginning of the year and accounted for a high proportion of the total capital, helping the Funds proactively support their members.

The total outstanding loans of People's Credit Funds in the area by the end of 2023 was VND 8,133 billion, down 1% compared to the beginning of the year. The credit quality of the Funds is basically guaranteed, the bad debt ratio is within the allowable limit.

Deposits at the Cooperative Bank reached VND 2,354 billion, accounting for 21.8% of total assets, an increase of 145.6% compared to the beginning of the year (59/59 Funds have deposits at the Cooperative Bank). The on-site capital mobilization of People's Credit Funds in the area in 2023 is relatively good, in addition to meeting the borrowing needs of members with surplus to deposit at the Cooperative Bank, creating conditions for the Funds to be proactive in liquidity and demonstrate increasing prestige to members and people in the area.

All Funds in the business area are profitable, with the total profit of the Funds reaching VND 88.4 billion. Currently, 56/59 Funds provide money transfer services, perform collection and payment services for members through the CF-eBank system of the Cooperative Bank of Vietnam with a total collection and payment amount of VND 18,774 billion, an increase of VND 12,042 billion compared to 2022, equal to 178.8%. In addition, the Funds are also a point of introduction and consultation for ATM card issuance services and cash withdrawal at the counter using POS machines of the Cooperative Bank, Nghe An Province Branch.

At the conference, delegates listened to the report on the implementation of duties and responsibilities for people's credit funds of the Nghe An branch of the Cooperative Bank; Report on the Vietnam Preservation Fund. Representatives of people's credit funds also shared experiences in directing and managing to overcome weaknesses, bad debts; difficulties in operating the salary project...

Overcoming limitations, continuing to be an effective capital channel

Speaking at the conference, Vice Chairman of the Provincial People's Committee Bui Thanh An emphasized: In 2023, in the context of general economic difficulties, the activities of People's Credit Funds continued to affirm the role and position of the type of credit institution "close to the people, close to the people", as an effective capital channel, mutual support in the member community, timely capital support for members to develop the economy, improve life, create jobs, contribute to local socio-economic development, and build new rural areas.

In addition to the achieved results, the operation of the People's Credit Fund system in the area still has many potential risks due to some shortcomings and limitations. The management capacity of the Board of Directors and Executive Board of some Funds is still weak. Some Funds control their operations in a formal manner; internal inspection, control and audit activities have not been focused on and strengthened; violations have not been detected, prevented and handled in a timely manner, or detected but not recommended handling measures...

In order to overcome the limitations, ensure the system operates stably, safely and develops sustainably, in accordance with the objectives, nature and principles of the cooperative credit institution model, the Vice Chairman of the Provincial People's Committee requested the State Bank of Nghe An province to continue to strengthen solutions to ensure operational safety, firmly consolidate the Fund system; Direct and supervise the Funds in the area to well implement the contents of the approved restructuring plan associated with bad debt settlement for the period 2021-2025. Especially the implementation of solutions to improve financial capacity, credit quality, governance, operation, control, internal audit; promptly detect and adjust the plan to suit the reality.

Deposit Insurance of the North Central region, Cooperative Bank Nghe An branch enhances its role and responsibility to help the Funds develop stably, safely and effectively; regulate capital, inspect, supervise, and ensure system safety in the area according to the provisions of law...

For the Credit Fund system in Nghe An province, it is necessary to closely follow the orientation and direction of the State Bank, functional agencies, Party committees and local authorities during the operation process; ensure operations are in accordance with the principles and purposes, comply with cooperative principles, avoid pursuing pure profits; effectively implement the restructuring plan associated with bad debt settlement.

Along with that, strengthen discipline and order in operations and enhance the role of the Board of Control and internal audit, improve the quality of inspection and control work, promote mutual control in professional activities, avoid taking advantage of positions and powers for personal gain. Funds must specify professional processes and internal regulations to ensure publicity, transparency, clearly define the specific rights and responsibilities of each stage and each officer in each department...

On this occasion, Nghe An Cooperative Bank awarded 10 people's credit funds with high average balance of regulated deposits; rewarded 10 people's credit funds with achievements in developing digital banking services in 2023.