On March 2, 2023, the State Bank of Vietnam (SBV) organized a Seminar on “Credit for cooperatives: Situations and Solutions”. The Seminar was chaired by Deputy Governor Dao Minh Tu.
Speaking at the Seminar, Deputy Governor Dao Minh Tu shared that, in Vietnam, the collective economy with the core being the cooperatives was established nearly 70 years ago, and has still been developing, making important contributions to the cause of the national liberation, construction and defense. According to the statistics, there are currently 17.3 million rural households, of which 9 million households just own a small farming area each on average. Due to the limited capital and property resources, the farming households and individual farmers need to be linked together and cooperate to organize their production and business activities in the orientation of a collective economic model, i.e. cooperatives, for sustainable efficiency. Accordingly, based on the policy of the Party, the Constitution and the laws, as well as the practical development of the collective economy and cooperatives in Vietnam and around the world, it can be affirmed that the cooperative economic development is a reality, with strategic and long-term significance in the socialist-oriented market economy of Vietnam.
An overview of the Seminar
Deputy Governor Dao Minh Tu also emphasized that the international experience and the practical developments have confirmed that in order to ensure the effectiveness in the cooperatives’ operations, capital resources, especially the banks’ credit, is considered an important element. Therefore, the Seminar was a good opportunity for the policy makers, the competent authorities, and the credit institutions to exchange their views, discuss and find out the current gaps in the legal frameworks in order to further improve the existing mechanisms and policies, and to propose possible solutions to improve the efficiency of the capital supply and credit access for the cooperatives.
The discussions at the Seminar focused on three main topics of: (1) A full and comprehensive assessment of the general theories on the existing credit mechanisms and policies for the cooperative economy, and the international experience in promoting banks’ credit for cooperatives; (2) Practical experience of some credit institutions in providing credit resources to the cooperatives in Vietnam; and (3) Analysis and evaluation of the support mechanisms and policies, and the current status of the credit supply for the cooperatives; identifying the barriers and limitations, which would form the basis for proposing possible solutions to improve the efficiency of the capital supply and the credit access for this economic sector.
In the coming time, the SBV would continue to direct the credit institutions to implement the following tasks: (i) Balancing the capital and granting more credit to the cooperative economic organizations and the cooperatives engaged in production and business, or operating in the priority sectors as stipulated in the Government's policy, the new cooperative models with high economic viability, or the cooperatives engaged in the development of products with comparative advantages, or producing products for a value chain with application of high technology, or the cooperatives with innovations and digital transformation in accordance with the laws; (ii) Continuously studying and developing a variety of credit products; reviewing, improving and renovating the credit granting processes, procedures and conditions in line with the requirements and the operational practices of the cooperatives in order to gradually expand and strengthen the capital support, as well as the access to credit resources for the collective economic entities.
In addition, the SBV would continue to review, research and propose measures to improve the credit mechanisms and policies, focusing on improving the policies on credit for agriculture and rural development; organize the effective implementation of the preferential interest credit programs, the National Target Programs in order to support the cooperatives; frequently monitor the implementation and promptly initiate solutions to remove any difficulties in credit access of the cooperatives, etc.
Le Hang