Trang Chủ
Contributing to local economic development
Quang Ngai is one of the first 14 provinces throughout the country which carried out the pilot establishment of PCFs. After over 20 years of establishment and operation, all the13 PCFs in Quang Ngai have overcome many difficulties, gradually been reinforced, and improved, contributing to the socio-economic development, restoration of traditional trade villages here.
At the same time, the DIV branch together with the branch of the State Bank of Vietnam (SBV) in Quang Ngai have enhancedexamination over local PCFs, contributing to raise awareness of legal compliance in general and in terms of deposit insurance in particular. It is the presence of the deposit insurance scheme that contributes to enhancing public confidence, removing negative prejudice of credit cooperatives failures before, gradually developing PCFs stably.
Nowadays, the system of PCFs in Quang Ngai province has operated quite stably with the number of weak PCFs accounting for less than 3% of the total. In 2008, in Duc Pho district, Quang Ngai province, there was a failure of An Thanh PCF (at that time the area of Quang Ngai province was still under the management of the DIV branchin the South Central and Central Highlands) since its Chairman broke the law and escaped. Thanks to timely participation and directionofthe leaders of the local SBV branch togetherwith quick and effective participation of the DIV, An Thanh PCF was dissolved in an orderly manner, not resulting in “a hot spot”, social insecurity and not causing domino effects although it was only 5 km far from another PCF. The total disbursed amount for more than 40 depositors was nearly 750 million dongs. After making payout, the DIV’sstaff participated in the Board of asset liquidation, actively coordinated with relevant parties to speed up debt recovery processin order to repay all deposits exceeding the coverage limit and monitored the recovery of the disbursed amount that the DIV had paid. Up to now, the recovered amount is over 560 million dongs, accounting for 80% of the total amount of disbursement.
The story of An Thanh PCF was always mentioned by leaders of the Quang Ngai SBV branch as a lively and true illustration ofthe role of deposit insurance policy as well as the close and effective cooperation between the DIV and the Quang Ngai branch of the SBV. Mr Ho Ban – Deputy Director of the Quang Ngai branch of the SBVconfirmed the DIV’srole of disbursement in ensuring the rights of deposits, preventing bank runs in the system of PCFs in Quang Ngaiand maintaining local social safety and security. Besides, he also stressed thatapart from the payout function, the DIV also conducts supervision and examination in order to detect violations in banking operations as well as in deposit insurance, makes recommendations onfurther solutions to the SBV.
Building up strength from confidence
The perception of Ms Hong To Phuong, a client of Tran Hung Dao PCF – Quang Ngaicity surprised us during our talk. According to Ms Phuong, saving is also a kind of investment, and larger investments meanhigher risks. Ms To Phuong is one of many present in the PR eventwho showed their confidence in the deposit insurance policy and willingness to be a “disseminator” of deposit insurance policy to spread out her confidence.
Mr Nguyen Minh Vien –the Deputy Director of Binh Duong Agricultural Cooperative in Binh Duong commune, Binh Sondistrict was very excited at the change in the deposit insurance coverage limit from 50 million to 75 million dongs. He supposed that it is good enough to be insured and he deposited his money at the funds because of his trust in the funds, in the policy of the Party and the State, not longing for the insured amount paid after fundfailures. Such opinions partly indicated theeffectiveness as well as the success of deposit insurance policy implementation in Quang Ngai. The public awarenesshas been improved so that people would feelassuredupon depositing their sweated money at people’s credit funds. In fact, more and more people have deposited their money at these funds. The total amount of operating capital of 13 PCFs in Quang Ngai in the final months of 2017 was over 400 billion dongs (increased by 18% against the same period previous year). The raised capital forsavings was nearly 380 billion dongs. Besides, thanks to enhanced confidence of depositors and good strategies, such PCFs as Duc Phong, Tinh Son, Tran Hung Dao have attracted a large number of clients. Thanks to stable growth of savings, PCFs could be active in granting loans for production, business and supporting life of their members. The credit structure in 2017 wasadjusted to adapt to the targets and objects oflocal production and business. The percentage of poor members decreased from 10% down to 4%. In addition, the funds have also paid attention to thelending aimed to restore and preserve traditional trades like planting strawberries, casting copper which would help create jobs for many people. In fact, thanks to loans provided by the funds, many households haveescaped from poverty, even got better-off, and couldafford their children’s schooling.
The success of the PCF system in Quang Ngai in particular and the finance-banking activitiesin the central coast of the Central Vietnam in general has partly resulted from the effective implementation of deposit insurance policy. This, in turn, has created momentum tobuild the effective deposit insurance organization, helping to implement deposit insurance policy extensively and intensively overthe province.
