Bank Credit Capital Contributes to Enhancing the Autonomy of Cooperative Economy and Creating Equality in Bank Credit Relations with Economic Sectors

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- Agricultural product consumption services: Cooperatives and private traders to stabilize prices in the area, protect the interests of members, organize annual purchase of 200-250 tons of goods, revenue reaches 450-500 million VND.

- Electricity services, electrical materials and petrol: The low-voltage power grid is regularly repaired and upgraded with a length of 5,420m. The entire 3-phase power grid, concrete pillars, standard conductors and meters are equipped for members. Each year, the electricity output is nearly 1 million kWh, with revenue reaching 700 - 800 million VND. The cooperative built a petrol station for nearly 500 million VND with bank loans and part of its own capital, with revenue reaching 5.5 billion VND/year, a store selling electrical materials, water and other tools with revenue of 300 - 350 million VND/year.

- Construction services: undertake construction of intra-field canals, houses for members, and infrastructure projects of the cooperative, with revenue reaching 200-250 million VND/year.

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- Support services: The purpose of this service is to serve the wishes of members, which each household cannot do or cannot do effectively, at high costs. Therefore, the cooperative has established and signed contracts with specialized groups: irrigation group, group receiving and processing rice seed quality, group repairing and preserving canal systems, internal roads, group preserving agricultural products for members... to help members in production and production with better quality. Specifically: rice seed multiplication and rice seed supply services: every year the cooperative prepares enough capital, organizes rice seed production on the rented area of 10 hectares of reserve land of the commune and the planned area, the width of the contracted members from 15-20 hectares to multiply high-quality seeds. Seed output is from 350-400 tons, revenue from 900 million VND to 1 billion VND/year. For this service, members have a very high demand and are most determined because it creates jobs and increases income for members. Regarding prices, the cooperative always gives preferential treatment to members, if

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Cash payment will be discounted 5% and contract payment at the end of the season will not be charged interest.

- Land preparation and rice threshing services: The cooperative proactively represents its members to sign contracts with local tractor owners, along with the cooperative's available tractors as a counterweight to stabilize prices. Thanks to this, it has ensured the correct implementation of technical procedures for sowing and planting time and lower prices compared to outside. The cooperative participating in this service competes fairly with other economic sectors, ensuring benefits for its members, especially poor households lacking production capital. 100% of its members participate in this service, with revenue reaching 350 - 400 million VND/year.

- Water pumping, irrigation and irrigation fee collection services: The cooperative established a specialized team with 20 workers responsible for dredging the canals in the fields to regulate water to each field under the direction of the cooperative staff, and at the same time responsible for protecting the fields and agricultural products for the people. In addition, thanks to bank credit capital and accumulated capital, the cooperative has built 2 pumping stations with a capacity of 120 KVA, with an investment capital of 344 million VND, proactively irrigating 160 hectares, increasing production from 1 crop to 3 crops/year, ensuring sufficient irrigation water for production. Revenue from this service is from 200 - 250 million VND/year.

- Repair and maintenance services for roads and irrigation systems in the fields. The cooperative established a specialized team with 10 workers to repair, maintain and manage roads and canal systems to ensure timely travel, production, harvesting and water regulation, reducing transportation costs for members. Every year, the cooperative repairs and maintains nearly 9 km of roads and 20 km of canals in the fields with a cost of over 30 million VND. In addition, the cooperative accepts to build 5,000 km of level 3 canals with a total value of 1.3 billion VND from state support capital, bank loans and contributions from members.

In addition, the cooperative always pays attention to the crop calendar, appropriate seed structure, and regional planning to grow suitable and valuable seedlings.

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high economic value, in coordination with the Center for Agricultural Extension and Plant Protection, organized training courses to demonstrate intensive farming models and impart new scientific and technical knowledge to farmers. The result of the planting area in 2004 reached 853 hectares, an increase of 16% compared to 2002 and 12% compared to 2003. The years 2005 - 2007 remained at 850 - 860 hectares. The output in 2004 reached 4,362 tons, an increase of 18% compared to 2002 and 14.5% compared to 2003. The years 2005 - 2007 reached

4,400 tons to 4,800 tons.

Thanks to the initiative in capital, the cooperative's service activities have brought about increased efficiency year by year, and the quality of services has been significantly improved. In 2004, revenue from services reached 10 billion VND, an increase of 35.3% compared to 2002, an increase of 25% compared to 2003. Profit was 600 million VND, an increase of 33%.

Compared to 2002, the revenue increased by 22% compared to 2003. Revenue in 2005 reached 8.9 billion VND, reaching 77% of the yearly plan, in 2006 it reached 12.1 billion VND and in 2007 it reached 16.12 billion VND; the cost of each service stage gradually decreased with the goal of serving members as the focus. [6].

c. For cooperative models that both focus on production and business and provide support services:

With this model, the cooperative both organizes production and business to ensure efficiency and provides services to members. Therefore, the capital requirement is very large to expand the scale of production and business to adapt to competition and always expand and improve the quality of service stages. The capital of the cooperative is limited, so the credit capital of the Bank with its superior characteristics has affirmed its important and irreplaceable role in cooperatives of this type.

Duy Son II General Production and Business Service Cooperative in Duy Xuyen District, Quang Nam Province is a unit formed from an agricultural cooperative with capital contributions from 170 members. Since 1990, the cooperative has transformed its production and business structure towards agriculture - industry - services. In 1997, the cooperative transformed its operations according to the law.

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Cooperatives both provide services for agricultural and forestry production and develop industrial and handicraft sectors in rural areas. [6].

- Agricultural - Forestry production and services: The Cooperative always does well in providing basic services that members need such as: irrigation, plant protection, breeds, veterinary husbandry... As for the cost of vaccination of livestock and poultry, the Cooperative supports 100% for members:

By concentrating capital from State budget sources, bank credit capital and own capital, the cooperative has invested in building many dams, water pumping stations, canals to serve irrigation for farmers, applying scientific and technical advances into production to convert crops and livestock, implementing programs such as IBM, ICM, BUCAP, etc. Specifically, disseminating to members integrated pest control, selecting hybrid varieties, not using mass pesticides, producing grade I varieties to save production costs, protecting the living environment of the community.[6].

The cooperative's annual agricultural production reaches 3,500-3,600 tons of rice equivalent. The cooperative supports the forest planting program of 100 kg of rice/ha, in order to encourage farmers to invest heavily in forestry, so it has organized concentrated and dispersed forest planting and protection on over 230 hectares of bare hills. [6].

The cooperative has built a rural clean water project worth over 1 billion VND and put it into use for 40% of local households.

- CN-TTCN production:

Electricity production: The cooperative has built a 1,200KW hydroelectric plant connected to the national grid, with annual electricity output of 2-2.5 million KWH, revenue of 1.4 - 1.5 billion VND.

Weaving: The cooperative does not focus on weaving but supports capital for members to develop weaving production in each household with 630 weaving frames, producing 3-4 million meters of various types of fabric/year, with revenue reaching 4 billion/year, creating jobs for 300 workers.

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Production of rattan and bamboo products for export: Each year, the cooperative produces 3,000 products of various types such as: tables and chairs, home interior decoration products, restaurants, hotels, children's chairs, newspaper baskets, etc. and 70 tons of raw materials. Revenue reaches 3 - 4 billion VND/year. The cooperative focuses on production in the stages of processing raw materials and finishing products. Other stages are brought to farmers for self-production at home. In addition, the cooperative also provides skills and techniques for localities inside and outside the district to produce bamboo garments, which the cooperative then collects and consumes.

Export shoe cooperative: annually produces 200-300 thousand pairs of export sports shoes, processing revenue from 3.5 - 4 billion VND/year, providing regular jobs for 300 workers, average income of 600-700 thousand VND/person/month.

Garment sector: The cooperative has invested 2.7 billion VND in a sewing line from bank credit, exporting 100-150 thousand products annually, with revenue of 2-2.5 billion VND. In addition, the cooperative has also entered into a joint venture with a Taiwanese enterprise to form a 2-member LLC specializing in the production of export garments. The total value of the project is 8 billion VND including: factory and equipment, in which the cooperative contributed 60% of the capital with its own capital and bank loans, and the Taiwanese side contributed 40% of the capital. The joint venture project has gone into production, solving the problem of nearly 500 surplus laborers in rural areas and contributing to increasing the local export turnover.

Trade and tourism services: The cooperative always focuses on the input and output service stages of agricultural and forestry products and industries such as: Food, fiber materials, textile products, garments, some other agricultural and forestry products. To do well in these services, the cooperative has always been proactive in capital. When capital shortage is necessary, with the available reputation, the Bank always responds promptly with short-term credit capital. The eco-tourism area of over 100 hectares is

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The state supports the planning costs that are being invested domestically and internationally. When there is an associated investor, the cooperative will develop a specific plan to have timely and effective support from bank credit capital and a part of the cooperative's capital to participate. Currently, there is a road from provincial road 610 to the tourist area that has been constructed with more than 4 km of concrete and asphalt to serve tourists visiting this ecological area.

Thus, bank credit is indispensable for any specific cooperative or cooperative economy in general, if it wants to develop. However, for sustainable development, bank credit participates according to the requirements of each cooperative. Bank credit has been really important for the development of cooperative economy in both breadth and depth and in all cooperative economic models for bank credit to participate from production to each service stage, it needs to be resolved by a specific, practical, effective mechanism from both the Bank and the cooperative.

2.3.1.4. Bank credit capital contributes to enhancing the autonomy of cooperative economy and creating equality in bank credit relations with other economic sectors.

In the period 2000-2007, our country's economy in general developed stably, the average GDP growth rate reached nearly 7.6%/year, the legal corridor for the development of the cooperative economy was relatively complete, the State had many policies to support and encourage the development of cooperatives. The cooperative economy in Vietnam during this period was a period of transition to operate under the Law on Cooperatives. Through classification, most cooperatives have come out of the difficult period to enter a new period of development. However, the development of the cooperative economy is still low (average 3.74%/year), weak competitiveness. Cooperative members, especially the poor, still suffer many disadvantages when there is no strong enough cooperative organization to protect their rights. One of the important reasons for the stagnation of the development process is that the cooperative economy does not have access to much bank capital. Bank capital is already low, and allocation

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The spread between regions and the bias between sectors make it less effective. Analyzing the current situation and finding out the causes and shortcomings in the relationship between bank credit and cooperative economic development is very necessary. From there, there will be effective solutions for bank credit capital to participate more, promoting the cooperative economy to develop on par with its position and role in the national economy.

2.3.2. Limitations

2.3.2.1. Bank credit capital still accounts for a low proportion compared to the capital needs of the cooperative economy and cooperatives still find it very difficult to borrow bank capital.

The above two issues are closely related to each other. Because it is difficult to borrow capital from commercial banks, commercial bank credit capital accounts for a low proportion of the total investment capital of the cooperative economy in recent years. Although the proportion of bank credit capital in the total borrowed capital of the cooperative economy has tended to increase since 2000, from 5.8% to 24.8% in 2007, the proportion of commercial bank loans still accounts for less than 10% of the total annual investment capital of the cooperative economy.

In addition, the proportion of capital for cooperative economic loans compared to the total outstanding debt of the banking system to the economy is also very low. If by the end of 2007, the total outstanding debt for the economy of the commercial banking system and credit institutions in Vietnam reached over 960,000 billion VND, while the outstanding debt for cooperative economic loans only reached 1,063 billion VND, accounting for only over 1%, this is a very low ratio. This situation has not improved much in recent years. [6] ; [2].

2.3.2.2. Newly established cooperatives still lack conditions for borrowing capital and lack convincing loan projects for commercial banks.

- The separation between economic efficiency and social efficiency is not clear. Members in the same profession want to cooperate with each other, rely on each other, voluntarily contribute assets and capital to produce and do business together. When necessary, they join the cooperative.

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Those who see no benefits (even immediate benefits) can ask to leave the cooperative. Therefore, the cooperative organization is loose, unstable, and lacks initiative at different levels.

- The newly established cooperatives do not have much experience in the market, their brand and reputation have not been established, which has limited the expansion of production and business, and their position in the market is still weak.

- Some newly established cooperatives are still following the trend, established under the direction of authorities at all levels (especially for agricultural cooperatives), so they are heavily political in nature and have not yet promoted economic efficiency.

- The reputation of old-style cooperatives has been lost, and has entered the subconscious of many people, so it is very difficult to erase. This still affects the activities of newly established cooperatives. Other economic sectors are not really assured and confident when collaborating and linking economically with these cooperatives. Access to different sources of capital for development still faces many difficulties.

2.3.2.3. The establishment and operation of cooperatives have not really complied with values and principles, and are not in accordance with the Law on Cooperatives, so operational efficiency is still low, making it difficult for commercial banks to meet loan capital needs.

Cooperative services provided to members account for a very low proportion of the cooperative's business results, estimated at only 0.21% of the cooperative's total production value in 2005 and the corresponding proportion in 2007. Thus, the cooperative's activities are not mainly directed towards cooperative members.

Many cooperatives have not really "opened" widely to the participation of a large number of members, and there are even cooperatives that actually operate as enterprises under the Enterprise Law, commonly in the fields of industry, construction, transportation, and electricity services. This existence comes from subjective reasons, on the one hand, in the cooperative legal system, the values and principles of cooperatives

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