25 years ago, when the People’s Credit Fund (PCF) network was still in its pilot stage, the primary role of Co-opBank Bac Ninh Branch was to intermediate capital and ensure the smooth flow of funds among local PCFs. A quarter of a century later, that mission has not only been maintained but also significantly expanded, with the Branch becoming the “Bank of the PCF system” in the locality, supporting PCFs in digital transformation, strengthening governance capacity, enhancing risk management, and developing modern banking services. This journey also reflects the growth of Vietnam’s PCF networkm itself – from a cooperative credit model facing numerous challenges to an important component of the inclusive finance network, contributing to the development of agriculture, rural areas, and the collective economy.
From the mission of capital intermediation…
On 27 July 1993, the Prime Minister issued Decision No. 390/TTg approving a pilot scheme to establish a three-tier People’s Credit Fund system, comprising grassroots PCFs, Regional Credit Funds (the predecessors of some Co-opBank branches), and the Central People’s Credit Fund (the predecessor of Co-opBank). The model was established to concretize the Party and State’s policies on developing cooperative credit, meet the capital needs of the agricultural and rural sectors, and diversify credit institutions serving the country’s industrialization and modernization.
With this mission on its shoulders, in August 1998, the Bac Ninh Regional Credit Fund Branch was established as the focal point for capital intermediation and coordination among PCFs in the former Ha Bac Province (now Bac Ninh Province). Although operating under challenging conditions, as the PCF network was still in its infancy, the legal framework remained incomplete, and banking technology was not yet integrated, the Bac Ninh Regional Credit Fund successfully fulfilled its capital intermediation role, provided financial support to grassroots PCFs, and laid an important foundation for the stability and development of the network.
During the 2001–2012 period, as the entire system implemented Directive No. 57-CT/TW of the Politburo, Decision No. 135/2000/QD-TTg of the Prime Minister, and Decision No. 207/QD-NHNN dated 20 March 2001 of the Governor of the State Bank of Vietnam, the Bac Ninh Regional Credit Fund was transformed into the Bac Ninh Branch of the Central People’s Credit Fund.
In the initial years, to support the consolidation of the PCF network in the locality while capitalizing on emerging development opportunities, the Central People’s Credit Fund Bac Ninh Branch stepped up its capital intermediaion activities, achieving remarkable growth in both scale and operational efficiency. From a modest starting point of 10 employees and total operating funds of just VND 11 billion, by 31 December 2012, the Branch’s total operating funds had reached VND 549 billion, an increase of VND 538 billion from the time of its establishment, representing an average annual growth rate of 48.18%. Of this, deposits from member PCFs reached VND 191 billion, with an average annual growth rate of 100.11%. Outstanding loans to PCFs reached VND 141 billion, growing at an average annual rate of 64.61%.
In 2013, following the transition to the Co-opBank model, Bac Ninh Branch entered a period of strong growth alongside the PCFs. By 31 December 2025, the Branch’s total operating funds had reached VND 4.828 trillion, an increase of VND 4.279 trillion from the time of the transformation, representing an average annual growth rate of 19.14%. Of this, the balance of capital intermediation deposits reached VND 1.715 trillion as of 31 December 2025; it peaked at VND 1.921 trillion in 2024, with an average annual growth rate of 45.08%. This contributed to the growth of the Branch’s total operating funds and provided a crucial foundation for expanding lending, diversifying banking operations, increasing profitability, and strengthening financial capacity.
However, the balance of capital intermediation deposits is inherently volatile due to seasonal factors. Each year, the first and second quarters are typically the periods when deposits received for capital balancing increase sharply, reaching up to 30% above the previous year-end level. By contrast, the fourth quarter is when PCFs withdraw their deposits and request capital intermediation loans to meet payment needs and extend loans to their members, causing the balance of capital intermediation deposits to decline rapidly by 20%–30% from the highest level recorded during the year. To address this challenge, the Branch has established a flexible capital intermediation mechanism capable of serving as a “liquidity shock absorber” for the PCF network in the locality. This is achieved by proactively balancing capital sources and mobilizing funds from the Head Office, residents, and economic organizations, thereby ensuring that the capital needs of PCFs are met at all times. This has been an important factor enabling PCFs to confidently expand lending while providing a solid foundation for the stable and safe operation of the entire system.
At the same time, the Branch has consistently been ready to provide funding to PCFs to expand lending for production, business activities, and people’s livelihoods; accept surplus funds from PCFs at interest rates higher than those offered on deposits from residents and economic organizations across all maturities; and, through its credit operations, ensure liquidity is readily available for the PCF network, enabling the most efficient use of surplus funds. As of 31 December 2025, outstanding loans to PCFs had grown at an average annual rate of 61.71% compared with the time of the Branch’s transformation.
Moreover, the Branch has gradually shifted from providing liquidity support to becoming a development partner for member PCFs by expanding support products and services, including syndicated lending, overdraft facilities, interest waivers and reductions, and unsecured lending support.
“A Strong Foundation” for the Development of the local PCF Network
The 2010 Law on Credit Institutions entrusted Co-opBank with a new mission as the “Bank of the PCF network”. Accordingly, the Branch’s role was elevated to a higher level, focusing on strengthening the overall development capacity of the PCF network in the locality.
This role is most clearly reflected in the digital transformation process. Co-opBank Bac Ninh Branch has not merely introduced technology into banking operations but has also helped PCFs adopt new approaches to management and governance. Products and services such as Co-opBank Mobile Banking, NAPAS chip cards, Co-opSmart, PRMS, together with Cf-eBiz, Cf-eAM, and Cf-ePCF applications, have created a digital service ecosystem that enables PCFs to expand their services, enhance transparency, strengthen risk management, and better serve their members.
Alongside digital transformation, the Branch has also focused on strengthening its governance and management capacity. Through the mandate entrusted by the SBV to support the inspection of the PCF network during the 2019–2024 period, the Branch promptly reported identified shortcomings and recommended corrective measures, contributing significantly to improving operational quality, reducing violations, and refining the business processes of PCFs.
Co-opBank Bac Ninh Branch has also regularly monitored the operations of PCFs through statistical reporting systems and periodic information exchanges, enabling it to provide timely advice, risk warnings, and recommendations to ensure the safe and efficient operation of the system. For PCFs facing liquidity difficulties, the Branch proactively coordinated with regulatory authorities to provide capital support, helping many PCFs overcome challenging periods, maintain stable operations, and ensure system safety.
In addition, the Branch has coordinated with the Head Office, the Vietnam Association of People’s Credit Funds (VAPCF), and the Safety Insurance Fund for the PCF network (Safety fund) to organize training programs, update legal regulations, standardize business processes, and promote professional ethics among PCF staff. These measures have provided a fundamental basis for enhancing the governance quality and competitiveness of the entire system.
Alongside effectively fulfilling its role as the Bank of the PCF network in the locality, Co-opBank Bac Ninh Branch also provides credit to businesses and individuals, with an average annual growth rate of 44.98%. Of this, outstanding loans to the agricultural and rural sectors accounted for 67.8% of total outstanding loans. By prioritizing lending to households, cooperatives, small and medium-sized enterprises, employees and workers, as well as effective production and business projects, while taking the lead in adopting technology and developing inclusive financial products, Co-opBank Bac Ninh Branch has contributed to helping local people, particularly those in remote and underserved areas, develop agriculture and rural economies, create jobs, reduce poverty, and curb illegal lending.
At the end of 2025, Co-opBank Bac Ninh Branch officially joined the group of Special-Class Branches across the Co-opBank system. This marked an important milestone, affirming the Branch’s position, financial capacity, and outstanding operational efficiency after more than a decade of transformation and development.
Building on the achievements attained over 25 years of establishment and development, Co-opBank Bac Ninh Branch aims to build a branch with strong financial capacity, effective governance, management and internal controls, and safe and sustainable operations, enabling it to effectively fulfill its role as the Bank of all PCFs in the locality. The Branch will contribute to building a unified, modern, safe, and sustainable PCF network, while also supporting the inclusive finance objectives of the SBV and Co-opBank.
Minh Ngoc
