The impact of credit risk on profitability of people’s credit funds in Ben Tre province

Abstract

 This paper studies the impact of credit risk on profitability of people’s credit funds in Ben Tre province. Research data is collected from quarterly operating reports in the period of 2013-2018 of 7 people’s credit funds which are monitored and supervised by the State Bank’s Ben Tre branch. Regression analysis with GLS shows that credit risk has negative significant effect on profitability, credit risk and member loan size have complementary relations when affecting profitability. In addition, the profitability is also explained by the positive impact of people’s credit fund size and cost management efficiency; meanwhile member loan size and people’s credit fund growth have no significant effect on profitability