“It is difficult for PCFs to implement digital transformation themselves due to their limited resources and their geographical distances”, said Mr. Nguyen Quoc Cuong – Co-opBank’s Chairman at the “Promoting financial inclusion towards sustainable development of agriculture and rural areas in Vietnam” seminar, which was recently organized by the Banking Journal – State Bank of Vietnam (SBV) and chaired by Deputy Governor Nguyen Kim Anh.
Discussing the solutions to promote financial inclusion towards sustainable development of agricultural and rural areas in Vietnam, Chairman Nguyen Quoc Cuong affirmed that the co-operative credit system which includes Co-opBank and the PCFs was considered as a community supporting model which has a mission relevant to the goals of financial inclusion.
Participating in the National Financial Inclusion Strategy, the co-operative credit institutions system which includes Co-opBank, 32 branches and nearly 1,200 PCFs, serving about 2 million members with a total capital and total loans of nearly 200 trillion VND and 150 trillion VND respectively, mainly for agricultural and rural areas. The system’s operation over the past time has contributed to the implementation of guidelines and policies of the Party, Government and the SBV on investment policies for agricultural and rural areas development; the policy of ”farmers, agriculture and rural areas” has promoted the economic restructured process, then contributing to hunger elimination and poverty reduction and restricting the use of black credit in agricultural rural areas.
Co-opBank and PCFs’ missions are consistent with the message of financial inclusion which is for members and aiming to serve the disadvantaged people who have limited access to financial services especially those in remote areas. However, it is necessary to focus on the implementation of 3 big goals in order to exploit the strengths of the system. In particular:
Firstly, the legal framework for the PCFs system and Co-opBank should be completed, bringing the PCFs back to its fundamental and original purpose which is supporting members in their lives, business and production development to exploit local capital and loan, especially towards the goals of the National Financial Inclusion Strategy, developing financial services in both quality and quantity, covering all regions, serving members and farmers where the PCFs and Co-opBank are present. Besides that, the organizational structure of the system should also be strengthened so that Co-opBank will be able to promote its role as the Bank of all PCFs and the apex of the entire system, performing the tasks assigned by the SBV by becoming an effective tool to support the PCFs system in operating safely and stably.
Mr. Nguyen Quoc Cuong – Co-opBank’s Chairman speaks at the Conference
Secondly, the system’s financial capacity should be strengthened by themselves and through the support from the Government and technology application and digital transformation should be promoted. In the context of intensive digital transformation in the financial market, Co-opBank and PCFs will certainly be part of that trend. It is difficult for PCFs to transform themselves, due to their resources and financial limitation and their geographical distances, thus requiring Co-opBank to take the lead and support them through the digital transformation process. Currently, Co-opBank has connected the payment network for about 700 PCFs and the Mobile Banking system as well as the fast payment system connected to the National Payment Gateway NAPAS, the chip card system, other credit cards and modern banking products will soon be launched.
Thirdly, people’s tranditional mindset must be changed to improve the efficiency in administration and management and more training and education for employees in the system will be needed. If PCFs want digital transformation to take place, they will need to firstly change their mindset and strengthening, upgrading and restructuring the governance system to be relevant to the Industry Development Strategy and the Financial Inclusion Strategy.
