When small amounts of capital are delivered to the right people at the right time, they can create significant changes—helping households expand production, build homes, and pursue their dreams of starting a livelihood. This is also the sustainable mission that the network of People’s Credit Funds (PCFs) across the country, including the North Central region, has been and continues striving toward.
Effectiveness Rooted in Community
In recent years, the PCFs network in Nghe An, Ha Tinh, and Quang Tri has increasingly affirmed its important role in the microfinance ecosystem. With the advantage of being “close to the people,” PCFs have become a key link in rural economic development – contributing to poverty reduction, job creation, and limiting loan-sharking practices in remote and disadvantaged areas.
In Truong Phu commune (Quang Tri), a locality newly established through the merger of three former administrative units, the operational model of the Mai Thuy PCF has become a highlight. With nearly 1,800 members, total capital more than 217 billion vnd, and outstanding loans of 185 billion vnd, Mai Thuy PCF not only provides financing for households to expand production but also contributes to the development of services, labor export, and new rural construction.
According to Mr. Nguyen Van Bay, Chairman of BOD- Mai Thuy PCF, the most important principles are “understanding the people, trusting them, and accompanying them.” Thanks to this approach, many households have had the opportunity to rise above poverty and build a better life in their own hometowns.
A typical example is Mrs. Vo Thi Xuan Huong of Truong Phu commune, who received a 1.3 billion vnd loan to develop an egg-laying duck farm. With this capital, she invested in barns and dug ponds; she now raises more than 5,000 ducks, supplying thousands of eggs each day and earning a stable income. “The PCF’s capital has been a support pillar that helped me start my business and create jobs for family members,” Mrs. Huong shared.
With support from the Mai Thuy PCF, Ms. Vo Thi Xuan Huong in Truong Phu commune has invested in developing a duck-farming model that has brought high economic efficiency
Meanwhile, at the Hien Thuan turmeric powder cooperative in the same locality, Director Duong Thi Hien said that thanks to a 500 million vnd loan from Mai Thuy PCF, the cooperative was able to invest in machinery, expand production, and create jobs for seven local women. Its turmeric powder product has now achieved a 4-star OCOP certification, strengthening its brand both within and outside the province.
In recent years, the PCFs network in Nghệ An, Hà Tĩnh, and Quảng Trị has continuously renewed its operating model, modernized procedures, and expanded its services. With the motto of “quick – convenient – reliable – safe – and efficient,” PCFs have become a trusted destination for people to deposit savings, access loans, or engage in production and business activities.
PCFs stand out for their intimate knowledge of local conditions and each member’s financial capacity. This allows the appraisal and disbursement processes to be carried out quickly and in line with actual needs. Many funds assign credit officers to be responsible for 100% of villages and hamlets, enabling them to capture customer information, assess production plans, and determine appropriate disbursement timelines. As a result, loan applications are typically processed the same day, ensuring timely access to capital.
In addition, PCFs place strong emphasis on strengthening financial capacity, increasing charter capital, making provisions, and reducing the share contributions of large member groups to prevent dominance or manipulation. Internal inspection and supervision are reinforced, and staff regularly receive training and professional development organized by the State Bank of Vietnam (SBV), ensuring transparent and safe operations.
Loan from PCF provides vital support for OCOP products in Quảng Trị province
Innovation in Operations, Towards Sustainable Development
However, alongside these positive results, the PCFs network nationwide—as well as in the North Central region—still faces numerous challenges. In some units, management and operational capacity have not kept pace with the demands of reform; the operating model remains somewhat “spontaneous” and lacks professionalism; and internal control is sometimes perfunctory, posing risks related to professional ethics.
Notably, the products and services offered by many PCFs remain simple, mainly focused on lending and deposit mobilization, with limited diversification and a lack of tailored policies for specific customer groups. This requires PCFs to accelerate innovation, adopt technology, and develop digital banking and green credit to keep up with development trends.
To ensure that the PCFs network in the region operates safely, stably, and sustainably, the State Bank of Vietnam (SBV) – Regional Branch 8 has instructed PCFs to strictly implement the restructuring plan linked with non-performing loan resolution for the 2021–2025 period; while simultaneously strengthening financial capacity, management, governance, and internal audit.
Regulatory authorities have also enhanced supervision efforts, issuing early warnings on risk indicators, identifying key inspection areas, and promptly rectifying issues or replacing violating staff. At the same time, local branches of the Co-operative Bank play an important role in liquidity support, capital coordination, and payment services to ensure the safety and cohesion of the entire network.
For PCFs themselves, it is essential to closely follow the directives of the SBV and local authorities, adhere to cooperative principles, and avoid pursuing profit alone. Each fund must strengthen mutual support, promote collective resilience, support members in production development, improve livelihoods, and contribute to building new rural areas. Along with this, reinforcing discipline, enhancing the quality of internal control and inspection, and establishing transparent, standardized operational procedures will help PCFs operate more steadily and affirm their role in local socio-economic development.
Looking at successful models such as Mai Thủy (Quảng Trị) and many other localities, it is clear that PCFs are becoming the “lifeblood” of rural economies. Each loan is not only a source of revolving capital, but also a symbol of trust and a bond that connects members within the community.
