Vietnam to Establish 1,700 Credit Funds by 2020

Vietnam will set up 1,700 people’s credit funds (PCFs) with a total mobilized capital of VND30 trillion (US$1.9 billion) by 2020, the State Bank of Vietnam said on November 28.

 

These PCFs are expected to attract 2.7 million clients in the period.

 

People's Credit Funds are a kind of cooperatives established by the Government to carry out savings and credit services. These funds collect deposits from both members - who are households, poor people and small enterprises - and non-members, but loans are provided to members only.

 

PCFs have made great a contribution to the economic development and poverty elimination, and restrained lending with high-interest charge in the country.

 

To date, Vietnam has more than 900 PCFs nationwide with the combined capital of VND4.7 trillion (US$297.5 million) as of the beginning of last year, including chartered capital of VND244.4 billion (US$15.5 million).

 

The PCFs are forecast to gross total revenue of VND9.8 trillion (US$620 million) in 2005, compared with VND7.8 trillion (US$493.7 million) in 2004.

 

The funds have lured more than seven million members over the last ten years.

 

In related news, the network of PCFs in Ho Chi Minh City was reported to operate efficiently this year.

 

The total capital of PCFs in the city so far this year has surpassed VND163 billion (US$10.3 million), a 38 per cent increase from last year. Their total outstanding debts have gained VND117 billion (US$7.4 million), up 11 per cent from 2004.