The issuance by the State Bank of Vietnam (SBV) of the Scheme for the Comprehensive Restructuring of the People’s Credit Fund (PCF) Network and the Co-operative Bank of Vietnam (Co-opBank) for the 2026–2030 period, with a vision to 2045 (the Scheme), is not merely a step toward addressing existing issues at individual PCFs, but also aims to build a modern, closely integrated cooperative financial system capable of proactively preventing risks and adapting to the evolving needs of the economy.
Standing Deputy Governor of the State Bank of Vietnam Doan Thai Son emphasized that PCFs and Co-opBank constitute one of the important pillars in implementing the National Financial Inclusion Strategy, helping bring banking services closer to people in agricultural and rural areas, as well as remote and isolated regions. Therefore, restructuring the system is not only an immediate requirement but also a strategic task aimed at enhancing competitiveness, ensuring operational safety, and better meeting development requirements in the new period.
From Practical Requirements to a Strategic Reform
After nearly 30 years of establishment and development, the PCF Network has affirmed its role as an important link in the network of credit institutions, channeling formal sources of funding to agricultural and rural areas and locations where access to banking services remains limited. With nearly 1,200 PCFs operating nationwide, approximately 2 million members, and a network extending to the commune level, the system has contributed to promoting household economic development, the cooperative economy, and the effective implementation of financial inclusion objectives.
However, alongside economic development and increasingly stringent requirements for governance, digital transformation, and risk management, the PCF model has also revealed a number of limitations. Most PCFs remain small in scale, with uneven financial capacity and limited ability to invest in technology, while competitive pressures in the financial market continue to intensify. These realities call for a major transformation so that the system can not only operate safely but also build sufficient capacity for development in the new period.
According to Mr. Hoang Viet Dung – Deputy Director of the SBV’s Credit Institutions System Safety Department, the issuance of the Scheme represents an important step toward addressing the fundamental challenges that have affected the PCF Network over many years. The fundamental difference between this Scheme and previous programs to strengthen the system lies in its scope and objectives. Whereas previous efforts focused primarily on addressing weak PCFs, the current Scheme expands its objectives toward establishing a foundation for sustainable development across the entire system.
Accordingly, the Scheme sets out six key objectives. First, it seeks to continue upholding the operating principles of PCFs, placing members at the center of their operations and contributing to the achievement of financial inclusion objectives. At the same time, the Scheme clearly defines PCFs as operating in the microfinance segment, in line with their role in providing small loans associated with agricultural production, household businesses, and micro-enterprises.
Another important objective is to strengthen the financial capacity and competitiveness of PCFs through increasing charter capital and encouraging mergers and consolidations to establish larger-scale funds with sufficient resources to invest in technology, improve governance quality, and expand their capacity to serve members.
The Scheme also clearly defines Co-opBank’s central role within the system. In addition to performing its function of capital intermediation across the system, Co-opBank will strengthen syndicated lending and joint appraisal to support member PCFs in accessing larger loans. At the same time, the Bank will develop shared technology infrastructure, strengthen risk controls, and provide common services for the entire system. This is an important solution to strengthen system-wide connectivity and enable the cooperative financial system to operate more effectively amid intensifying competition.
The core objective of the Scheme is not to reduce the number of PCFs, but to build PCFs with stronger financial capacity, more modern governance, and sufficient capabilities to serve their members over the long term. As individual PCFs are strengthened and Co-opBank fulfills its role as the system’s central connecting institution, the entire system will have a solid foundation for safe and sustainable development.
One of the highlights of the Scheme is the repositioning of Co-opBank’s role within the PCF Network. Whereas the Bank previously focused primarily on capital intermediation and providing operational support, in the new period, Co-opBank is positioned as the central institution connecting the entire system.
Under the Scheme’s orientation, Co-opBank will strengthen its financial capacity; expand syndicated lending and co-financing; develop shared technology platforms; enhance human resources training, internal audit, and risk management support for member PCFs. Establishing a sufficiently strong central institution will enable PCFs to better leverage the advantages of the system, rather than operating independently as they have in the past.
According to experts, the Scheme can only be effectively implemented when it receives the consensus of the entities directly responsible for its implementation. With regard to the Scheme for the Comprehensive Restructuring of the PCF Network and Co-opBank, it is noteworthy that, from the development stage, many entities across the system have proactively studied the Scheme, reviewed their resources, and prepared the necessary conditions to enter a new phase of development.
As an area with a well-developed PCF network, Co-opBank Bac Ninh Branch views the Scheme as an opportunity to improve the operational quality of the entire system, rather than focusing solely on addressing immediate shortcomings.
According to the leadership of Co-opBank Bac Ninh Branch, in the coming period, the Branch will continue to strengthen its financial capacity, enhance its role in capital intermediation and providing liquidity support, and accompany member PCFs throughout the restructuring process. The objective is not only to ensure operational safety, but also to create favorable conditions for PCFs to enhance their capacity to provide funding to members and local residents.
In addition, the Branch will continue to strengthen inspections and supervision with a proactive, preventive approach, identifying and mitigating risks at an early stage and from a distance, with system safety placed at the forefront. Supervision should shift from case-by-case handling toward risk identification, early warning, and risk control throughout the course of operations.
Another key focus for Bac Ninh Branch is digital transformation. The Branch is continuing to develop digital banking products and services, promote synchronized technology connectivity between Co-opBank and member PCFs, and gradually establish a modern cooperative financial ecosystem.
While Bac Ninh emphasizes strengthening support capacity, at Co-opBank Thai Binh Branch, the focus is on reinforcing the linkage between Co-opBank and member PCFs. According to Ms. Do Thi Thanh Huyen – Director of Co-opBank Thai Binh Branch, the Scheme clearly identifies Co-opBank as the central institution connecting the entire system, with a role in capital intermediation, providing operational support, and strengthening the capacity of PCFs.
With 85 member PCFs currently under its service coverage, the Co-opBank Thai Binh Branch recognizes the need to take a more proactive approach to providing support at the grassroots level, thereby contributing to the safe and effective operations of PCFs.
According to Ms. Huyen, achieving this objective requires the synchronized implementation of four groups of solutions.
First, strengthen capital linkages by improving the quality of capital intermediation and liquidity support, enabling PCFs to promptly meet the borrowing needs of their members.
Second, strengthen service linkages by developing digital payment platforms and modern banking products, helping PCFs gradually narrow the technology gap with other credit institutions.
Third, strengthen human resource linkages by stepping up training and providing consulting support on governance, risk management, and digital transformation, thereby improving the operational quality of individual PCFs.
Fourth, strengthen system-wide linkages by promoting experience sharing, operational coordination, and mutual support between Co-opBank and PCFs, as well as among member PCFs, thereby building a more unified and secure network.
Ms. Do Thi Thanh Huyen emphasized that, from the time the Scheme was still under development, the Branch had proactively prepared its human resources, strengthened the unit responsible for member PCFs, enhanced staff training, and refined coordination mechanisms with PCFs in the locality. Early preparation will facilitate the synchronized implementation of the Scheme’s tasks, contributing to improved support and supervision across the system.
Practical implementation at Co-opBank Bac Ninh Branch and Thai Binh Branch shows that both units share the view that restructuring is not merely aimed at strengthening individual PCFs, but at building a more closely integrated system with stronger financial capacity and more modern governance.
Proactively Embracing Change
Immediately following the issuance of the Scheme, many PCFs proactively studied its provisions and developed development plans aligned with the new orientation. This reflects a shared understanding across the system that restructuring is not an administrative change, but an opportunity to strengthen operational capacity, enhance competitiveness, and achieve sustainable development.
As one of the entities directly affected by the Scheme, Tan Phong PCF views system restructuring as an inevitable trend in the development process. According to Mr. Phan Thanh Giang – Director of Tan Phong PCF, after studying the Scheme, the Tan Phong PCF believes that the time is right for the PCF Network to enter a new stage of development, in which PCFs will operate on a larger scale, with greater professionalism and sufficient capacity to meet the increasingly demanding requirements of the economy.
According to Mr. Phan Thanh Giang, most importantly, the Scheme continues to reaffirm the fundamental nature of the PCF model – operating for the benefit of members, closely connected with local communities, and pursuing the principle of mutual assistance. This is also a distinctive advantage of the PCF Network, setting it apart from commercial credit institutions.
With a clearer definition of their target customer base, PCFs will be better positioned to focus their resources on the appropriate market segment, leverage their in-depth understanding of local conditions, and improve the quality of products and services provided to members.
Regarding the policy of reorganizing the network in line with commune-level administrative units, Mr. Phan Thanh Giang said that this is a step consistent with the development trend. During the initial stage, changes to the operating model may raise concerns among some entities. However, through discussions and efforts to build a common understanding, many PCFs have come to recognize that consolidation will create opportunities to expand capital scale, invest in technology, improve governance quality, and better serve members.
Therefore, Tan Phong PCF is ready to participate in the consolidation process and work with PCFs in the locality to build an organization with a larger scale, stronger financial capacity, and more stable and effective operations.
It is clear that the Scheme for the Comprehensive Restructuring of the People’s Credit Fund Network and the Co-operative Bank of Vietnam for the 2026–2030 period, with a vision to 2045, not only sets out a roadmap for strengthening this distinctive type of credit institution, but also aims to build a cooperative financial system with greater competitiveness, more modern governance, and stronger linkages.
More importantly, the Scheme marks a shift from addressing immediate shortcomings to creating a foundation for long-term development; from strengthening individual entities to building the strength of the entire system; and from focusing on operational safety to enhancing competitiveness and adaptability amid digital transformation.
Through these efforts, the Scheme aims to build a safe, modern, and sustainably developing cooperative credit institution system, which will continue to serve as an important channel for mobilizing and providing capital to the agricultural and rural sectors, contributing to socio-economic development, ensuring system safety, and maintaining security and social order in local communities. This will also provide a foundation for the PCF Network to continue accompanying individuals, small businesses, and the agricultural and rural sectors in the country’s economic development toward 2045.
According to The Banking Times
