In pandemic areas, how People’s Credit Funds operating?


Bac Ninh and Bac Giang are now pandemic hotspots in the country, a lot of industrial parks have to cease their operation, measures of establishing isolation health zones, practicing social distancing have been quickly and timely taken in many areas. While once-crowded streets have become quiet, non-essential activities are temporarily suspended the banking sector generally and People’s Credit Funds (PCFs) particularly still maintain transactions to meet people’s needs.

Activities in social-distancing period

In the first days of May, the Covid-19 pandemic began to outbreak in Bac Ninh and Bac Giang. On May 6, Bac Ninh recorded 11 coronavirus cases, and on May 9, Bac Giang recorded 16 cases and these figures have kept growing exponentially. Provincial People’s Committees in provinces quickly promulgated Decisions on the establishment of medical isolation, social distancing zones in the areas which had a high risk of infection according to the Prime Minister’s Directive 06. In May, due to the outbreak of the pandemic and its complicated developments, Bac Giang made a decision on practicing social distancing in the districts of Lang Giang, Luc Nam, Yen Dung, Hiep Hoa, Yen The, Yen Phong, Luong Tai, Tien Du, Thuan Thanh and Que Vo, and Bac Ninh city.

As the suppliers of essential services that still maintain their operations in isolation zones, PCFs in Bac Giang and Bac Ninh, as reported, have actively grasped the new developments of the Covid-19 pandemic and followed the directions of relevant levels, sectors, provinces to strictly and sufficiently implement preventive measures; actively taken measures, ensure safe, smooth and uninterrupted operations in all cases. A series of preventive measures have been simultaneously carried out like disinfecting the entire office; ordering staff and clients to strictly comply with the 5K guidelines issued by the Ministry of Health when making transactions, etc. Besides, rotational shift work is in place. Staff members who work from home also have to comply with preventive measures. Rotational shift work is aimed at ensuring the continuity of PCFs’ daily work, besides  if their staff members are quarantined, their operations could still run as normal without the disruption of capital flows as well as local banking services.

Mr. Nguyen Van Quang – Chairman of the Board of Directors of Tam Da PCF in Yen Phong district (Bac Ninh) revealed from the distancing area “In the first distancing days, our staff all got very confused and worried. But as we consider ourselves to be one of important service providers, we have strived to operate as normal”.

Meanwhile, Bao Son PCF in Luc Nam district (Bac Giang) is also operating in the distancing area. The director of Bao Son PCF, Mr. Duong Van Tinh said “Although we are in a pandemic hotspot, our staff members always strive to overcome difficulties, maintain essential activities to serve our clients. When our clients have sudden needs, even on Saturday or Sunday, we are still willing to serve them timely”.

“However, because we are now in the distancing zone, we cannot carry out some core operations like loan application assessment, secured transactions, so we cannot make new loans”, said Mr Tinh.

PCFs provide support in preventing the pandemic and restoring business and production

The Covid-19 pandemic has greatly influenced all aspects of social life and the economy. It has not just adversely affected the production and business of enterprises but also caused negative social impacts like unemployment, income reduction, etc. A lot of enterprises are on the brink of temporarily suspended operation or bankruptcy, especially small and medium-sized enterprises as well as family businesses. In that context, the State Bank of Vietnam (SBV) required credit institutions (CIs) to reschedule debts, provide interest exemptions and reductions. As for existing loans, the SBV called on CIs to reduce interest rates on these loans and CIs agreed to do so. Besides, CIs also reduced payment fees, prepared capital sources for enterprises with demand for new loans to promote economic activities.

By the end of May, 2021, Bac Giang had to close 4 industrial parks with 322 enterprises, nearly 150,000 employees temporarily stopping working, an estimated more than 2,000 billion dongs of industrial production value loss. In Bac Ninh, more than 400 enterprises with about 65,000 employees had to cease their operation. Facing unprecedented difficulties, CIs in general and PCFs in particular have shown their bravery and responsibility as important organizations in the national financial network, joining hands with the Government and the community to prevent and fight the pandemic, soon bring life to normal and realize the socio-economic objectives of the country.

Recently, Tam Da PCF (Bac Ninh) has issued a lot of important policies related to removing obstacles for clients who have been affected by the Covid-19 pandemic. For example, in addition to promoting communication to help clients get information about supportive measures for those affected by the Covid-19 pandemic, the Fund has taken measures in terms of interest, fee support, debt restructuring. Besides, Tam Da PCF has applied some methods of support tailored to clients’ situations like considering extending the terms for new loans to be consistent with the working capital turnover, providing support and guidelines on quick implementation of lending procedures, etc. With its support, many local small-scale services, trading and livestock households have overcome difficulties and continued to maintain the pace of production and business.

Mr. Nguyen Van Quang – Chairman of the Board of Directors, Tam Da PCF revealed that in the social distancing period, the number of clients who came to make transactions at his Fund has decreased considerably, but the total amount of deposits has increased quite strongly compared to the pre-pandemic period. This shows that people still have great confidence in the Fund in the context of the pandemic owing to the significant roles of the Deposit Insurance of Vietnam (DIV).

“Our Fund was granted with the Certificate of Deposit Insurance participation with the commitment to protecting the legitimate rights and benefits of the Fund’s depositors. Therefore, people’s trust in Tam Da PCF has been increasingly strengthened, improving capital mobilization. Besides, the DIV’s examination and supervision are effective ways of restricting operational risks. Complying with legal regulations on deposit insurance is also a way of protecting the legitimate rights and benefits of depositors, maintaining the safe and sound operations of Tam Da PCF" – stressed Mr. Quang.

Although Bao Son PCF (Bac Giang) has not yet applied a mechanism for supporting those business households which faced difficulties due to impacts of the Covid-19 pandemic, it has made a lot of contributions to the province by making donations and communicating pandemic prevention measures to the clients who came to make transactions.

Currently, the Covid-19 pandemic is still unfolding unpredictably. The socio-economic development in the new period requires a lot of efforts made by enterprises themselves, people and the entire political system. Despite difficulties, the banking sector always accompanies enterprises, individuals in removing difficulties, overcoming turbulence, stabilizing production and business. In that context, people always put their trust in the banking sector in general and PCFs in particular. PCFs have been responding to that belief by their stable operation even in the pandemic hotspots.

Research and International Cooperation Department