Strengthening the role of Vietnam Cooperative bank for sustainable development of people's credit fund system

Abstract

 Developing the People’s Credid Fund System (PCFs)- the cooperative model- is one of the important solutions for rural socio-economic development and for reducing loan sharking. Despite the achievements of the PCFs operations in the past, some individual PCFs revealed problematic with weaknesses, shortcomings and errors which needed to be considered and dealt with in order to strengthen the PCF system to develop sustainably, avoiding the side effects to reputation of the whole system. The apex institution for supporting and supervising PCF system was established in 1995 as the Central People’s Credit Fund and transferred into the Vietnam Cooperative Bank in 2013. The overview of Coop Bank development process, as well as the apex role implementation demonostrated the importance of Coop Bank for the sustainable development of the PCF system. Using the SWOT model for assessing the role of Coop Bank in accelerating the sustainable development of PCF system in this paper, the 6 strengths, 6 weaknesses, 7 opportunities and 12 challenges were summarized. From that, the two strategic objectives and major orientationed are developed basing on general orientation of Vietnam banking industry till 2025, vision 2030. To optimize the SWOT content, in this paper, the authors proposed 6 recommendations focusing on improving Coop Bank capacity to better meet the needs of PCFs and promote financial inclusion; and 3 recommendations for improving the role of “bank of PCFs”.