Solving the "thirst" for capital of cooperatives

Although considered one of the important pillars promoting the country's economic development, up to now, the cooperative economic sector is still struggling with the capital problem. Most cooperatives have difficulty accessing credit, causing many models to operate only at a low level or stop at a small scale, lacking the momentum to develop.

Than Uyen Cooperative ( Lai Chau ) is one of the few cooperatives that has had favorable access to preferential credit as a lever for its development. According to Cooperative Director Le Tuan Anh, thanks to loans from the Vietnam Cooperative Development Support Fund, the cooperative's sales have grown impressively, with the following year increasing by about 25% compared to the previous year. Currently, the cooperative plans to build a factory with a total investment of up to 24 billion VND and hopes to continue to borrow more from the Fund to expand its production scale.

It is called rare because among the 100 outstanding cooperatives that were recently honored at the "Cooperative Star Awards - CoopStar Awards 2025" organized by the Cooperative Alliance recently, only 16 cooperatives received 31 loans from the Fund. This reflects the reality that more than 80 cooperatives have not yet accessed capital. According to Vice President of the Vietnam Cooperative Alliance Nguyen Thi Hoai Linh, the Vietnam Cooperative Development Support Fund is gradually affirming its role as an important focal point, coordinating with relevant units to remove difficulties in accessing capital for cooperatives. However, the Fund's operations have not yet met expectations, partly because the Fund's previous lending mechanism was narrow in terms of subjects, only limiting loans to cooperatives, cooperative unions and investment loans; partly because many cooperatives do not have complete information about the Fund.

According to General Director of the Vietnam Cooperative Development Support Fund Pham Cong Bang, the Fund has lent capital to hundreds of cooperatives and members, strongly promoting the start-up movement, improving operational efficiency and actively contributing to the development of the collective economy across the country. With the goal of operating not for profit, it can be said that the loan packages at the Fund have very attractive interest rates. Specifically, for short-term loans, the preferential interest rate for priority sectors is only 4%/year and 4.6%/year for other sectors. Meanwhile, for medium-term loans in priority sectors, the interest rate is 4.7%/year, and for other sectors, it is 5.2%/year. For long-term loans, it is 4.7%/year and 5.2%/year for priority sectors and other sectors, respectively.

In addition to borrowing capital from the Fund, cooperatives also seek official credit flows from the banking system. According to data from the State Bank of Vietnam, by the end of 2024, there were 35 credit institutions participating in lending to cooperatives and cooperative unions with outstanding loans reaching VND 6,855 billion, an increase of 11.53% compared to the end of 2023. However, by the end of January 2025, outstanding loans to cooperatives and cooperative unions reached VND 6,428 billion, a decrease of 6.23% compared to the end of 2024, accounting for 0.04% of the total outstanding loans of the economy.

According to the State Bank of Vietnam, in addition to outstanding loans to cooperatives and cooperative unions, credit institutions also lend to individuals and households who are members of cooperatives to meet the production needs of cooperatives and cooperative unions. Accordingly, the credit of the banking sector serving the production and business activities of cooperatives can be much higher, in the form of loans from individual cooperative members. Specifically, statistics show that outstanding credit to individuals and households, including individual cooperative members, by the end of January 2025 reached more than 7.3 million billion VND, accounting for 46.7% of the total outstanding credit of the whole economy.

However, similar to borrowing from the Fund, accessing capital from the commercial banking system is also a major obstacle for cooperatives. To date, it can be said that Agribank is the only commercial bank that has developed a separate credit regulation for cooperatives and implemented preferential lending mechanisms such as: No collateral required, maximum of 1 billion VND for rural cooperatives, 2 billion VND for aquaculture cooperatives and 3 billion VND for fisheries cooperative unions. In particular, for cooperatives participating in the value chain, the unsecured loan amount can be up to 80% of the total project value.

However, providing credit to cooperatives still faces many difficulties because most cooperatives do not have offices, factories, or warehouses with sufficient storage capacity. In addition, cooperatives often do not have collateral to borrow capital or mortgage assets of members, so handling collateral assets when necessary is difficult. Not to mention, the management, operation, production and business organization capacity and labor qualifications of cooperatives are still limited. Many cooperatives have not met the counterpart capital requirements, the financial reporting system is not complete, the loan plan is not feasible, there is no transparency in finance and cash flow, there are no invoices and documents, accounting and bookkeeping are not in accordance with the law; they have not been proactive in output, have not been able to build a brand and form strong production chains, so they face strong competition from private enterprises and foreign-invested enterprises.

Along with Agribank, the Vietnam Bank for Social Policies is also implementing three main credit programs to support cooperatives, including: Loans to support job creation, loans for traders in difficult areas and loans for production development according to value chains. According to Deputy Director of the Student and Policy Subjects Credit Department Hoang Thi Chuong, as of March 31, the total outstanding loan balance of the job creation loan program reached more than VND114,645 billion, of which the outstanding loan balance for cooperatives and cooperative groups reached VND54.74 billion with 71 customers still in debt.

“The demand for preferential loans from cooperatives is quite large, but the number of cooperatives accessing preferential credit sources is still modest because most cooperatives have small capital, and the assets owned by the cooperative to secure loans are still low compared to the demand for loans. Moreover, the production and business plans are not feasible, so they do not fully meet the conditions for loans. Some cooperatives have not opened a full accounting system according to regulations, and have not shown all cooperative activities transparently enough,” said Ms. Chuong.

From there, Ms. Hoang Thi Chuong also requested the Cooperative Alliance, the Cooperative Development Support Fund and related organizations to increase support for cooperatives, cooperative unions and cooperative groups in improving their organizational and financial capacity to ensure conditions for borrowing capital. Cooperatives and cooperative groups, especially small-scale cooperatives, need to ensure safe, effective and transparent financial management and operation, with full and correct financial reporting books and records. The use of loans must be for the right purpose, for the benefit of the members.

Source: https://nhandan.vn/giai-con-khat-von-cua-hop-tac-xa-post876960.html