The Journal of Asian Finance, Economics and Business

Korea Distribution Science Association (한국유통과학회)
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The Interactive Relationship between Credit Growth and Operational Self-Sustainability of People's Credit Funds in Mekong Delta Region of Vietnam

  • HA, Duong Van (Postgraduate Training Institute, Hong Bang International University)
  • Received : 2019.07.09
  • Accepted : 2019.07.17
  • Published : 2019.08.30
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Abstract

The purpose of this study is to discover the interaction between credit growth and operational self-sustainability and to examine factors that affect credit growth and operational self-sustainability of people's credit funds (PCFs). Credit growth and operational self-sustainability are factors affecting the operations and the goals of people's credit funds (PCFs) in the Mekong Delta region of Vietnam. After regression analysis on a set of panel data from 2013 to 2018 of 24 PCFs, it appears that deposit growth and loan-to-deposit ratio have positive relationships with credit growth, while capital adequacy ratio and operational self-sustainability have negative relationships with credit growth of PCFs; capital adequacy ratio, deposit growth and income have positive relationships with operational self-sustainability, while credit growth and non-performing loan ratio have negative relationships with the operational self-sustainability of PCFs. At the same time, credit growth and operational self-sustainability have a relationship to interact with each other in a contrary trend. The results of this research are accurate according to the characteristics and development history of PCFs in the Mekong Delta region of Vietnam from 2013-2018. This study helps researchers and managers to understand the key determinants for better management of PCFs.

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