As part of the restructuring of the People’s Credit Funds (PCFs) network, mergers are not merely an organizational change or a means of reducing the number of PCFs. Rather, they present an opportunity to pool resources, strengthen governance capacity, and lay a solid foundation for sustainable development, ultimately enabling PCFs to better serve their members and communities.
Over the past 30 years, the People’s Credit Funds (PCFs) network has played an important role in providing credit and financial services in rural areas, supporting millions of members and contributing to local economic development. However, as expectations continue to rise for digital transformation, cashless payments, risk management, information security, and service quality, the small scale and fragmented resources of some PCFs have created significant challenges.
The Scheme on the Comprehensive Restructuring of the People’s Credit Funds network and the Co-operative Bank of Vietnam for the 2026–2030 Period, with a Vision to 2045 sets out a strategic direction for renewing, strengthening, and enhancing the competitiveness of Vietnam’s cooperative financial system.
International experience shows that, as financial markets and technology evolve rapidly, consolidation and mergers can enable mutual financial institutions to leverage economies of scale, concentrate resources for technology investment, strengthen governance capacity, develop human resources, and diversify their products and services.
The Australian experience offers a valuable reference. From around 748 credit unions in the 1970s, the number of credit unions in Australia declined significantly to approximately 292 institutions by 1995, amid major changes in the market, technology, governance requirements, and the regulatory framework. This contraction reflected the combined impact of financial liberalization, heightened prudential requirements, and changes in tax policies, which placed significant pressure on credit unions, particularly smaller institutions. Against this backdrop, many credit unions chose to consolidate or merge in order to achieve greater scale, strengthen their financial capacity, and enhance their competitiveness. This process contributed to the emergence of larger and stronger mutual financial institutions, with greater capacity to invest in technology, develop products, improve service quality, and adapt to evolving governance requirements. According to statistics from the Australian Prudential Regulation Authority (APRA), as of 2025, Australia had 52 mutual banks – the designation adopted by many credit unions following mergers – as well as a number of credit unions that had not merged and continued to provide financial services to their members and customers. Source: Australian Prudential Regulation Authority (APRA).
Despite differences in institutional models and regulatory frameworks, Australia’s experience offers a valuable lesson: stronger linkages and cooperation within the system are key to enhancing institutional capacity, adapting more effectively to change, and supporting sustainable development.
In Vietnam, mergers are one of the solutions for restructuring the PCFs network, based on plans approved by the authorities and implemented in accordance with the circumstances and specific conditions of each PCF. The overarching objectives are to ensure operational safety, safeguard the legitimate rights and interests of members and depositors, and maintain the capacity to serve local communities.
As the central bank linking the system, Co-opBank continues to support PCFs in liquidity and fund management, payment services, technology, training, and strengthening governance capacity. The shared infrastructure and technology ecosystem provided by Co-opBank will help reduce the pressure of individual technology investments while enhancing service quality, operational safety, and information security. Within its functions and responsibilities, Co-opBank coordinates in monitoring and providing early warnings of risks, and supports PCFs throughout the process of assessing conditions, developing merger plans, transitioning to new technologies, and training staff, while ensuring the continuity of services.
A merger is not merely an organizational change; it can also open a new chapter of development on a stronger foundation. Under the direction of the State Bank of Vietnam (SBV), with the commitment and proactive engagement of PCFs and the continued support of Co-opBank, this process can contribute to building PCFs with more appropriate scale, stronger governance capacity, and safer and more efficient operations, enabling them to better serve their members and communities.
United Today – Stronger Tomorrow. When resources are connected and effectively leveraged, the collective strength of the system can be multiplied, enabling PCFs to remain trusted financial anchors, closely connected with their members and communities for the long term.
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