Government takes bold measures to ensure safety of finance system
Poorly-performing State-owned people’s credit funds – a type of credit institution focusing on people in rural areas to help them escape poverty and avoid dependence on loan sharks – will be merged, acquired or dissolved to ensure the safety of the country’s finance and banking system.
Hanoi (VNS/VNA) - Poorly-performingState-owned people’s credit funds – a type of credit institution focusing onpeople in rural areas to help them escape poverty and avoid dependence on loan sharks – will be merged, acquired or dissolved toensure the safety of the country’s finance and banking system.
The plan was part of a directive released lastweek by Prime Minister Nguyen Xuan Phuc to enhance the operationaleffectiveness of the country’s people’s credit funds with an aim to meettargets set in the Government’s project on restructuring creditinstitutions in association with the settlement of non-performing loans (NPLs)in the 2016-2020 period.
The move was made as there are still several poorly-performing people’s creditfunds in some locations, which were having anadverse impact on the safety anddevelopment of people’s credit funds in particular as well as the finance andbanking sectors in general.
However, PM Phuc also noted the bold measuresmust be implemented prudently to ensure legitimate interests of depositors and maintain the stabilityand safety of the finance and banking system.
Under the directive, the PM instructed the StateBank of Vietnam to enhance the supervision as well as assessment andclassification of the funds so that measures can be taken to deal with subparperformance according to the Government’s scheme on strengthening anddeveloping the system of people’s credit funds until 2020.
He also asked relevant ministries and agenciesin cities and provinces nationwide to implement measures to restructure thefunds according to the project on restructuring credit institutions.
Specifically, they must continue to improve andstrengthen the safety and effectiveness of the existing people’s credit fundsas well as creating new ones in rural areas.
The Government has focused on the establishmentof people’s credit funds, especially in remote and rural areas, which lackaccess to banking services.
The funds help mobilise capital and lending topeople in rural areas, contributing to the eradication of hunger, reduction in poverty and dependence onloan sharks.
According to the SBV’s report, there were 1,181people’s credit funds operating in 57 cities and provinces by the end of Junelast year. The funds provided services for nearly 1.6 millioncustomers.-VNS/VNA
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Illustrative image (Source: VNA) 
