Facilitating development of collective economy

Increasing professional training of management; innovating and improving efficiency of collective economy activities; improving management capacity, activities quality of existing co-operatives; proposing solutions for cooperatives to access to provincial Cooperatives Supporting Fund… were main contents presented at the recently held conference of reviewing collective economy situation and alliance activities of provincial cooperatives in 2014; deploying orientations, tasks for year 2015. 

Difficult access to loans

Lack of capital for production is considered as a major barrier to the development of cooperatives. Therefore, in 2013, PPC established Co-operatives Supporting Fund to fund cooperatives. However, so far this fund has disbursed in dribs and drabs. Total loan is nearly VND15 billion to 10 projects compared to VND50 billion of the initial capital of the fund.

Cooperative members visited snakeskin gourami breeding model of Mr. Phung Van Thuc, who is head of Freshwater fish Club in Tam Lap commune, Phu Giao district.

Mr. Vo Van Giau, deputy head of Di An town collective economy’s steering committee, said, among 14 cooperatives in town is about 80% ones having the demand for loans but cannot meet lending conditions, such as: viable business plan, legal status, high market outlet, solvency… In fact, capacity of cooperatives management is still low, restricting access to loans. In the long term, provincial Cooperatives Alliance needs to promote business management training for farm owners, officials of cooperatives to evoke new business initials.

Minh Giang Transport - Services Cooperative’s Director Pham Cong Thoai said, their financial accounting practices were restraint, while this was crucial to the cooperative. This was the reason why they were not confident to approach provincial Cooperatives Supporting Fund.

Crediting conditions need to be reviewed

Provincial Cooperatives Alliance’s President Tran Van Thay, Cooperatives Supporting Fund seeks to promote lending to cooperatives but must also ensure the recovery of debts. Cooperatives have been established voluntarily and are not capital constrained, thus do not have mortgage assets for loans as well as sponsor of the third party.  

"To overcome this, cooperatives have to strengthen organization, set up viable business plans to meet crediting conditions. The current interest rate decreases by 0.48%/ month (5.76%/ year). Any cooperative having a viable business plan, prestige, no bad debt is able to approach the fund”, said Mr. Thay.

Speaking at the conference, PPC Vice Chairman Tran Thanh Liem asked provincial Cooperatives Alliance to review, adjust lending conditions to facilitate borrowing from cooperatives. Binh Duong is one of a few localities having Cooperatives Supporting Fund and not limiting granted loans. The province wants to not only grant loans to cooperatives with low interest rates but also support rural cooperatives to develop towards industrialization and modernization, economic restructuring. On the other hand, provincial Cooperatives Alliance needs to develop, replicate effective economic models, improve quality of operations of existing cooperatives, tackle inefficient cooperatives… 

"2015 is the last year of implementation collective economic activities development in the province. Therefore, provincial Cooperatives Alliance should strengthen propaganda activities, disseminate emulation movements to develop, replicate effective models, excellent individuals. This is the most effective and practical propaganda channel to develop collective economy, implement provincial orientation towards new rural development”, said Mr. Liem. 

Reported by T.Huynh – Translated by Ngoc Huynh