Attending the working session, the World Bank (WB) delegation included Mr. Trieu Quoc Viet - Senior Financial Expert, Mr. Davit Babasyan - Senior Financial Expert in Europe and Central Asia, Mr. Juan Buchenau - Senior Banking Consultant; Ms. Nguyen Chau Hoa - Program Assistant.
The WB representatives said that this working trip continued the survey activities from December 2024, in which the State Bank of Vietnam (SBV) and the WB working group agreed to conduct a comprehensive assessment of the People's Credit Funds (PCFs) sector in Vietnam. The assessment focused on operational capacity, suitability, strategic development options as well as legal framework and monitoring mechanisms for this sector.
WB experts at the meeting
At the meeting, Dr. Hung stressed that in 2024, the National Assembly passed the amended Law on Credit Institutions to meet practical requirements. This is an important legal basis to promote the restructuring of the banking system, creating conditions for financial institutions and enterprises to transform and develop in line with global trends. At the same time, the State Bank of Vietnam is currently restructuring its branch system, reducing it to 15 regional branches. This is an important shift to improve governance efficiency.
Mr. Hung assessed that inspection and supervision are key factors regarding the PCFs system. With a network spread across provinces and cities, PCFs are currently being supported by the Co-opBank in capital regulation and restructuring. With nearly 1,200 PCFs, it has created a convenient credit channel to meet the capital needs for production, business, services and life development of almost 2 million members in 57/63 provinces and cities nationwide. However, this model poses a big problem regarding management and supervision capacity, when the number of funds is quite large and dispersed. Therefore, it is necessary to review the operating structure, have appropriate solutions for restructuring, towards safety, transparency and sustainable efficiency in the coming time.
Mr. Hung also said that while commercial banks and credit institutions have strongly implemented digital transformation, PCFs still face many difficulties in management and supervision. Therefore, innovating the operating model and applying information technology to management is an urgent requirement. According to him, for PCFs to be truly effective in supporting people, especially in remote areas, they need to be comprehensively restructured, their position enhanced and resources concentrated. At that time, the funds will play an important role in promoting production, increasing people's income and moving towards non-cash payments according to the Government's policy.
The meeting view
In response to the WB's question about the operational orientation and the suitability of PCFs to people's needs, Dr. Nguyen Quoc Hung said that the National Financial Inclusion Strategy to 2025, with a vision to 2030 - approved by the Prime Minister in Decision No. 149/QD-TTg dated January 22, 2020 - has clearly defined the goal: All people and businesses, especially vulnerable groups, the poor, low-income people, small and micro enterprises must have access to and use financial services conveniently, appropriately and at a reasonable cost. Therefore, the operating model of PCFs needs to aim at practically serving people, contributing to improving the quality of life and promoting financial inclusion. He also noted that commercial banks in the region need to work closely with the Co-opBank to form a solid financial ecosystem, in which the State Bank of Vietnam plays a more effective role in remote supervision. The PCFs system is an important component in the credit institution system, and if management is loosened, it will pose many risks and can seriously affect the entire system.
At the end of the meeting, the World Bank representative expressed his deep gratitude for the practical sharing and valuable information from VNBA. At the same time, WB hopes to continue receiving support and consultation from the Association to complete the assessment report, thereby making appropriate proposals and recommendations, contributing to promoting the effective implementation of the National Financial Inclusion Strategy in Vietnam in the coming time.
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