On March 31st, 2022, the SBV held a conference on PCFs’ operation in Thanh Hoa province
Mr. Dao Minh Tu – Deputy Secretary of the Party Personnel Committee, Standing Deputy Governor of the SBV and Mr. Nguyen Van Thi – Member of Standing Committee of Provincial Party Committee, Standing Vice President of People’s Committee were present
Mr. Dao Minh Tu – Deputy governor of SBV speaks at the conference
However, Thanh Hoa was one of the provinces that has experienced highest rate of development in recent years in the developed trend of Vietnam. Therefore, the challenges for local PCFs are not only providing sufficient capital but also ensuring operational safety without affecting local socio-economy.Speaking at the opening of the conference, Mr. Dao Minh Tu said that the Government and the SBV recently issued many guidelines and policies for PCFs’ operation, safety and soundness. In addition, PCFs in the area had important contributions by providing loans to individuals businesses, especially small and medium enterprises (SMEs), households, etc. thereby leading to an improvement in life quality, job creation and economic development.
Therefore, according to Mr. Dao Minh Tu, this conference was for PCFs to share difficulties and recommendation to improve their weaknesses for PCFs’ better operation.
Mr. Tong Van Anh – Director of SBV Thanh Hoa Branch reported about the PCFs operation on 31st December, 2021. In particular, there are 67 PCFs in Thanh Hoa which is one of 5 biggest numbers of PCFs in Vietnam with operated areas in 178 communes, wards and towns of 18 districts in Thanh Hoa.
Total operating capital is VND 7,390 billion. The mobilized capital is VND 6,327 billion, for accounting for 85.6% of total capital; Loan capital is VND 256 billion, representing 3.5% of total capital; equity is VND 471 billion, accounting for 6.4% of total equity; Total loan outstanding is VND 5,428 billion, 31,303 loan members/115,656 members currently borrow loans at PCFs. Credit quality of PCFs is generally guaranteed, reflected by an NPL rate within the allowed limit.
As a result, PCFs affirmed their role and position in locality with efficient capital channel in both providing loans and mobilization. They have contributed significantly to the reduction of black credit, develop the economy, stabilize the political security in agriculture and rural areas, especially in the economy of Thanh Hoa province.
The conference gave time for PCFs’ to share their ideas and recommendations and answered by the Banking Supervision Agency, the Deposit Insurance and Co-opBank.
Mr. Nguyen Van Thi – Standing Vice President of People’s Committee of Thanh Hoa highly appreciated the attention of SBV, especially by hosting this conference to comprehensively evaluate the PCFs’ operation, thereby finding measures and solutions for future development.
According to Mr. Nguyen Van Thi, in general, PCFs in Thanh Hoa has operated effectively and promoted their role in creating jobs, improving and developing the quality of life, eradicating hunger and reducing poverty, increasing the local community’s wealth and limiting black credit, etc., contributing to promoting socio-economic development of Thanh Hoa.
Mr. Nguyen Van Thi believed that close direction and the effective coordination between the banking sector and the authorities will help PCFs in Thanh Hoa for efficient, safe and sound development in the future.
Overview of the conference
To ensure the safety, efficiency and soundness of PCFs system, Mr. Dao Minh Tu directed the entire system to implement synchronously solutions: Continue consolidating the PCFs system nationwide, including Thanh Hoa; continue implementing the restructured project to improve financial, administrative, staff capacity and strengthen the inspection, supervision activities.In conclusion, Mr. Dao Minh Tu acknowledged the contribution of PCFs system in Thanh Hoa during the past 30 years. By the end of 2021, outstanding loans balance grant by PCFs was 3.4% of Thanh Hoa’s total outstanding loans, the highest rate in Vietnam which proved PCFs’ significance in local economic and social development especially in rural and remote areas. Besides the positive results, PCFs also have weakness. Therefore, it is necessary to consolidate and improve the performance of PCFs in Thanh Hoa. Mr. Dao Minh Tu emphasized that “This is a key task of the banking industry in the coming time”.
Besides that, SBV Thanh Hoa branch needs to coordinate closely with local authorities to hold annual conference for evaluating the general activities and policies of the local; PCFs have to strengthen their technology and comply strictly the law.
Mr. Dao Minh Tu assigned SBV’s functional units to answer and handle the suggestions and recommendations of PCFs. Mr. Dao Minh Tu said that, in the long term, it was necessary to study and renew the operating model of PCFs system to ensure the suitability and meet Vietnam’s socio-economic development requirements in the future.
