As the bank for People’s Credit Funds (PCFs), over the course of 30 years of formation and development, the Co-operative Bank of Vietnam (Co-opBank) has always stood by, supported, and provided operational guidance and capital harmonization for PCFs within the system. Notably, to help PCFs meet the increasing capital demands of their members, Co-opBank has actively partnered with PCFs in implementing syndicated lending—providing loans to customers who are members of PCFs for business projects or plans, thereby supporting the economy and contributing to the strong socio-economic development of local communities…
Many PCFs in Hai Phong and Nam Dinh such as An Dong PCF, Hop Duc Ward PCF, Phuong Dinh PCF, and Tho Nghiep PCF have affirmed that Co-opBank’s syndicated lending product is highly beneficial in enhancing capital efficiency for PCFs. When member loan demands exceed the PCF’s maximum lending limit, Co-opBank provides consultation and co-lends to meet those member needs.
Mr. Le Ba Thanh—a member of An Dong PCF in Hai Phong—is a testament to the effectiveness of syndicated lending. A VND 600 million loan co-financed by An Dong PCF and Co-opBank Hai Phong Branch marked a turning point for his family. A new house replaced their small, old one, and recently, an elegant second floor was added. Life has since become more prosperous and improved.
Mr. Le Ba Thanh – Member of An Dong PCF, Hai Phong (far right) with leaders from Co-opBank Hai Phong Branch and An Dong PCF
Through syndicated lending, PCFs not only meet higher capital needs of their members but also gain opportunities to enhance their reputation and competitiveness compared to other financial institutions in the area. Furthermore, co-financing member loans allows Co-opBank to detect and promptly address operational limitations in PCFs, thereby ensuring overall system safety.
To manage implementation effectively and limit risk, Co-opBank has assigned credit officers to directly collaborate with PCF staff in appraising loan applications, evaluating collateral, and guiding the use of credit software and accounting systems. Co-opBank has also actively promoted the benefits of syndicated lending to members and the community to facilitate broader adoption among PCF members.
Syndicated lending is a highly useful product that helps improve PCF capital efficiency. (Illustrative image)
Over time, the effectiveness of syndicated lending has become evident as it has met the funding needs of PCF members whose loan requests exceed PCF lending limits, when PCF financial capacity cannot meet loan requirements, or when Co-opBank’s planned funding allocations have reached their cap….
This helps PCFs enhance financial capacity and competitiveness by co-lending with Co-opBank. Additionally, the product allows PCFs to diversify credit risk, with Co-opBank participating in proportion to the co-lending contribution.
With lending amounts reaching up to 80% of total loan value (PCFs must contribute a minimum of 20%), syndicated lending is an important financial product that clearly demonstrates Co-opBank’s function of strengthening system linkage and supporting PCF operations. Together, Co-opBank and PCFs form a cooperative financial institution that accompanies PCF members, enhances operational capacity, expertise, and working capital for PCFs.
Syndicated lending also enables Co-opBank to monitor PCF operations more closely, providing timely and effective consultancy and supervision to help PCFs operate efficiently, safely, and in line with their intended goals. This form of lending also supports mutual training and knowledge exchange between Co-opBank and PCF staff during loan file processing…
Customers receiving detailed guidance from Co-opBank branch staff. (Illustrative image)
Mr. Mai Van Uy – Director of Co-opBank Nam Dinh Branch – stated that the branch has consistently considered developing and serving members a top political priority, focusing on serving member PCFs. Their core lending target is to meet member capital needs and support deposit disbursement, helping maintain the credibility of the entire system.
“In particular, we have proactively promoted syndicated lending at PCFs to both enhance PCF financial capacity for supporting members and mitigate risks while also improving PCF capabilities in project appraisal and lending,” he noted.
Ms. Le Thi Phuong – Director of Co-opBank Hai Phong Branch – shared that in recent years, the branch has actively implemented syndicated lending with local PCFs, especially An Dong PCF, Tam Da PCF, and Cao Minh PCF. In 2023 alone, the highest syndicated lending volume reached VND 37 billion. This proved to be one of the most effective lending activities, expanding credit access for local people, supporting business development, increasing income, and reducing “black credit” in the area.
It can be affirmed that syndicated lending has delivered practical benefits to PCFs. Beyond meeting their members’ borrowing needs, it enhances system connectivity, enables Co-opBank to efficiently carry out capital harmonization for PCFs, prioritize funding for lending, credit expansion, and support payment and disbursement needs of PCFs in accordance with current regulations and each unit’s capital capability. The outcomes of syndicated lending thus far provide a strong foundation and motivation for Co-opBank to further its role as a central hub, develop more services for PCFs, and serve as a solid pillar for a safe, effective, and sustainably growing PCF system.
Syndicated lending continues to deliver practical benefits to PCFs. (Illustrative image)
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