“The People’s Credit Funds (PCFs) network risks losing its competitive edge amid the rapid advancement of financial digitalization, fintech, and digital banking.” This concern was raised by numerous delegates at the international workshop titled “Strengthening and Enhancing the Role of the PCFs network in the Economy and the Collective Economic Sector,” jointly organized by the Ministry of Finance and the Raiffeisen Cooperative Federation (Federal Republic of Germany) on the afternoon of March 12 in Hanoi.
According to the delegates, alongside the continued improvement of the institutional framework to sustain momentum for the development of PCF networks, it is essential to place particular emphasis on strengthening Co-opBank’s capacity so that it can effectively assume its central role in leading the network.
A Key Driver of Finance for the Collective Economic Sector
Speaking at the workshop, Mr. Bui Anh Tuan, Director General of the Department of Private Enterprise and Collective Economy under the Ministry of Finance, emphasized that “the collective economy, with cooperatives at its core, is an important component of Vietnam’s national economy.” Resolution No. 20-NQ/TW, issued in 2022 by the Central Committee of the Communist Party of Vietnam, affirmed that “the development of the collective economy is an inevitable trend in the context of international integration, consistent with the socialist-oriented market economy; it stems from practical needs, protects the interests of members, and creates conditions for effective production and sustainable development.” Notably, the PCFs network – a cooperative model operating in the field of credit – has been identified in the Collective Economy and Cooperative Development Strategy for the 2021–2030 period as one of the key drivers in promoting financial services for the collective economic sector and in supporting cooperatives in developing commodity production.
Mr. Bui Anh Tuan – Director General of the Department of Private Enterprise and Collective Economy (Ministry of Finance) delivered the opening remarks
During the 2021–2025 period, despite global uncertainties, the collective economic sector and cooperatives in Vietnam maintained stable development in both scale and quality. The operations of the PCF system continued to be strengthened in accordance with its nature as a cooperative credit institution; governance, management, and internal control capacities have improved; the majority of PCFs operate profitably, with non-performing loan ratios maintained at low levels. As of 2025, there were 1,176 PCFs nationwide – though this represents a decline of 0.4 percentage points compared to the end of 2020, when PCFs accounted for 3.3% of the broader financial network.
During the 2021–2025 period, despite global uncertainties, the collective economic sector and cooperatives in Vietnam sustained stable development in both scale and quality. The operations of the PCF system continued to be strengthened in accordance with its nature as a cooperative credit institution; governance, management, and internal control capacities improved steadily; and the majority of PCFs remained profitable, with non-performing loan ratios maintained at low levels. As of 2025, there were 1,176 PCFs nationwide, reflecting a decline of 0.4 percentage points from the end of 2020, when PCFs accounted for 3.3% of the broader financial network.
From a practical standpoint, a representative of Kim Chung PCF noted that PCFs play a vital role in contributing to socio-economic development at the local level, particularly in rural and remote areas. However, the system is currently facing three major challenges.
First, financial capacity remains limited. Many PCFs have small charter capital bases that are insufficient to meet the growing capital demands of members or the requirements for business expansion.
Second, governance and management capacity remains inadequate. A portion of PCF staff lack proficiency in risk management, financial analysis, and the application of information technology, which undermines operational efficiency and internal control. Effective oversight from higher-level authorities is further constrained by the large number and wide geographic distribution of PCFs; consequently, despite ongoing efforts by Co-opBank and the State Bank of Vietnam (SBV), many challenges persist.
Third, technological and product/service limitations persist. Most PCFs continue to rely on manual processes or basic software solutions that lack system-wide synchronization. Their product and service offerings remain narrow, focused predominantly on deposit mobilization and conventional lending, without sufficient diversification to meet the increasingly sophisticated financial needs of their members.
Strengthening Co-opBank’s Role in Leading the System
Drawing from operational experience, the representative of Kim Chung PCF proposed that the SBV continue to strengthen the legal framework governing the network, including the development of specific mechanisms for resolving non-performing loans, policies to incentivize the enhancement of financial capacity, and support for training and human resource development.
With regard to Co-opBank, delegates recommended reinforcing its role in capital regulation and liquidity support for member PCFs, while diversifying capital management instruments — such as short-term and medium-term lending, overnight lending, and refinancing facilities — in a manner consistent with the specific operational characteristics of PCFs.
Furthermore, Co-opBank should strengthen its inspection, supervision, and technical support functions for member PCFs. This encompasses providing in-depth technical assistance, including advisory services on operational procedures, the development of risk management frameworks, and the implementation of information technology solutions. In parallel, it is imperative to establish an early warning system anchored in the financial and operational indicators of PCFs, capable of delivering timely alerts and actionable recommendations.
Particular emphasis was placed on advancing technology and diversifying the product and service portfolio to support PCFs. This encompasses investing in integrated IT solutions, providing management software, electronic payment systems, and digital banking services to member PCFs. Equally important is the need to research and deploy tailored products and services — such as financial advisory services, guarantee services, and payment agency services — enabling PCFs to broaden their operational scope and strengthen their competitive position. In parallel, specialized training programs should be developed to equip PCFs with the knowledge and skills required to adopt new technologies and develop innovative products and services.
The Cooperatives Alliance should incorporate PCF development into its action program for collective economic development for the 2025–2030 period, while establishing regular coordination mechanisms among the Alliance, the SBV, and Co-opBank to support the advancement of the system.
Echoing the views and assessments of the delegates, Mr. Nguyen Thac Tam — Deputy General Director of Co-opBank — particularly underscored the importance of digital transformation for the development of the PCFs network in the new phase. Mr. Nguyen Thac Tam emphasized that digital transformation represents a critical enabler for the system and a fundamental solution through which PCFs can enhance their competitiveness and strengthen customer retention.
Mr. Nguyen Thac Tam noted that in recent years, despite limited financial resources, Co-opBank has implemented a range of initiatives to drive digital transformation across the PCF system. These include establishing a Steering Committee on Digital Transformation; formulating IT and digital transformation strategies; conducting system-wide surveys on the current state of digital transformation within the PCF network; issuing relevant regulations and policies; and developing a broad suite of digital solutions, comprising:: the PCF Reporting and Monitoring System (PRMS), compliance reporting systems, credit rating systems, debt classification and early warning systems, mobile banking applications for individuals/members and for PCFs/businesses, the CF-eBank payment system, the CF-ePCF service initiation system, the CF-eAM identification system, the CF-ecenter customer care system, AI chatbot virtual assistant, internal communication platform (Gapowork), debit and domestic credit card products, payroll services, and collection/payment services for PCFs and their members. At the same time, training programs have been organized for PCFs on topics such as information security, payment and transfer services, mobile applications, domestic credit cards, and collection/payment services.
In the coming period, Co-opBank will explore the deployment of shared software for PCFs, upgrade the PRMS management information system, and develop a data warehouse, management information systems (MIS), a Payment Hub, a centralized credit management system, and an electronic office system interconnected with PCFs. Co-opBank will also introduce a modern e-learning system to enhance staff capacity across the network, and will proceed with signing payment agency agreements with eligible PCFs to comprehensively extend payment services to PCF members.
Furthermore, Mr. Nguyen Thac Tam recommended that regulatory authorities augment Co-opBank’s financial resources to more effectively support the digital transformation of the system. “For PCFs, although Co-opBank will play a supporting role, PCFs themselves must standardize their operational processes and proactively mobilize the necessary human and financial resources to closely coordinate with Co-opBank in implementing digital transformation solutions,” he stressed.
Speaking at the workshop, Mr. Hoang Viet Dung — Deputy Director General of the Department for the Safety of the Credit Institutions System under the SBV — stated that the PCF system faces an imperative to restructure in order to improve operational quality and efficiency. He further noted that the legal framework must increasingly align with international standards and remain consistent with the state management orientation for PCF system development. Accordingly, in 2026 and the period ahead, it is essential to continue reviewing, amending, and refining the regulatory documents governing Co-opBank and PCFs to ensure comprehensive and tailored regulation in keeping with their specific characteristics. This includes strengthening system linkages with Co-opBank at the center and progressively establishing shared mechanisms and ecosystems across the entire PCF network.
In parallel, sustained focus is required on enhancing the governance, management, and financial capacity of individual PCFs, and on deepening system-wide linkages among Co-opBank, PCFs, relevant ministries and agencies, and provincial and municipal People’s Committees. This should be pursued through the study and implementation of coordinated solutions, thereby supporting the sustainable development of Co-opBank and the PCFs network and preserving their role as an effective channel for capital provision in service of the country’s socio-economic development.
Overview of the workshop
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