Recommendations for Local Government and Mass Organizations

Credit institutions can conduct identification and conduct appraisal processes as well as handle issues related to loan decisions and disbursements in the most convenient way;

Actively and proactively participate in the activities of the lending group or team and voluntarily comply with the regulations when participating in the State's "loan program to prevent and eliminate black credit". Voluntarily learn and fully participate in training sessions on using the lending software to ensure accurate operations and timely and effective disbursement;

Cooperate closely with credit institutions in implementing loan commitments, using loans for the right purposes, proactively and voluntarily complying with debt repayment on time;

Closely cooperate with the government and mass organizations in the entire process of determining needs and establishing loan limits, using and repaying loans from credit institutions. Timely detect and report to local authorities as well as mass organizations on credit risks and violations of loan commitments with the locality and credit institutions.

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4.2.4. Recommendations for local authorities and organizations

The role of local authorities and mass organizations, including political and social organizations, mass organizations, professional organizations, etc., is very important in limiting and eliminating black credit. Experiences summarized from many national programs (Summary Report of Program 135, 2019) have shown that the level of participation of local authorities and mass organizations plays a role in realizing and improving the effectiveness of implementing solutions to ensure the goal of implementing programs and programs to limit and eliminate black credit is no exception.

First of all, local authorities at all levels, mass organizations and professional organizations need to identify their very important role in implementing the Program for lending to limit, prevent and eliminate black credit of credit institutions. More than any other entity, local authorities and mass organizations have the most complete information and the clearest understanding of the conditions, circumstances and needs of people living and working in the locality. Therefore, if a good coordination mechanism is built with local authorities and mass organizations, credit institutions will have the most complete access to potential customer information, creating conditions for effective customer credit appraisal steps. After disbursement, the use of capital for the right purpose

The purpose as well as ensuring life, labor production are important conditions for timely loan repayment, which are also monitored and urged in the best way by the local government and mass organizations. Even for customers who are capable but do not want to repay their debts, the local government and mass organizations can still have more effective propaganda, encouragement, and enlightenment measures than those of other credit and legal institutions. Through regular contact, understanding and sympathy, through the impact of "village psychology", arousing family traditions, local examples... so that borrowers voluntarily fulfill their debt repayment obligations. In short, the government and mass organizations are an important "bridge" between credit institutions and local people, contributing significantly to the elimination of black credit. The coordination and support of local authorities and mass organizations not only facilitate and support credit institutions in implementing lending activities but also contribute to supporting credit institutions in monitoring loan implementation and debt collection in the most effective way. On the other hand, local authorities and mass organizations also have full information on the activities of all agencies, organizations and economic units operating in the area, including usury, black credit, hui, ho, etc. Therefore, the coordination between state authorities at all levels and functional forces with local authorities and mass organizations will create favorable conditions to detect, combat and eliminate black credit, hui, ho, etc. as well as other social evils.

To realize the important roles analyzed above, recommendations for local authorities and organizations include the following:

The local government, Party committees, mass organizations and professional organizations complete the data information system on management and operation areas, including completeness of information, updates and accuracy to coordinate with credit institutions, carry out financial needs assessment of individuals and families living and working in the locality;

Support credit institutions to identify and verify necessary information about personal identity, labor situation, production and business situation and financial situation of each household, helping credit institutions to know or accurately identify target customers, on that basis, they can apply new technologies to simplify loan processes and procedures, save time and administrative costs of each loan, contributing to reducing loan interest rates;

Advise and support credit institutions in determining loan limits for households

In the area, there is a need for loans, consulting on suitable loan products in terms of scale, term and interest rate;

Authorities at all levels, mass organizations and professional organizations carry out activities to support credit institutions in establishing and assessing lending groups or teams, developing principles for borrowing, repaying debts and activities of lending groups or teams, creating conditions for credit institutions to be able to apply lending methods to groups or teams similar to microfinance organizations or the Charity Fund (TYM) of the Vietnam Women's Union;

Local authorities at all levels and organizations need to be proactive and proactive in supporting and coordinating with credit institutions to monitor the use of loans for the right purposes, effectively ensuring the deadline and methods of debt repayment of the people. The best monitoring method is through the support of public services of authorities at all levels and the professional support of mass organizations and professional associations within the scope of local authority. Attention and exchange of experiences in life, production and business... are also good measures to implement information reporting on the entire health situation, life, labor production and income of the people to promptly detect and notify credit institutions to deploy support measures, promptly prevent and limit potential risks that may affect the ability of customers to repay loans on time;

Provide support and encouragement to people to repay loans on time. Whenever people are found to be at risk or having difficulty repaying their loans, the government and mass organizations will investigate the cause and apply appropriate support measures. In cases where people are able but do not want to repay their loans, the government and mass organizations can encourage and educate them to be self-aware and responsible in repaying their loans. Encouragement and education can be done directly or through family members, relatives, etc.;

Be proactive in taking responsibility and implementing the responsibility to prevent, limit and handle black credit through: (1) organizing propaganda and mobilizing people not to participate in black credit activities, promptly reporting information when detecting black credit activities; (2) collecting and updating information on credit activities in the area, paying special attention to black credit activities if any; (3) organizing functional forces in the area and coordinating with functional forces of other localities to be ready to investigate, combat and handle credit activities in the locality if any;

4.2.5. Recommendations for security agencies, media and technical and technological support organizations

In addition to recommendations for the Government and state management agencies at the central and local levels, for credit institutions, for households in need of loans and for local mass organizations, to effectively limit, prevent and eliminate black credit, some recommendations for security agencies, information and communication as well as for businesses and organizations developing technical and financial information technology are extremely necessary. Specifically as follows:

First of all, the Ministry of Public Security is the place that stores a very large data system, including basic and important information of the entire population. If there is coordination and support in sharing these databases, it will allow credit institutions to soon apply modern technology to identify customers, significantly reducing the time, effort and cost to make loans to prevent and eliminate black credit. Next, as an agency to enforce and protect the law, protect the lives and safety of people, security and social order, the Ministry of Public Security has intervened very early and actively fought against black credit in the past. However, the majority of violations have occurred and the investigation and suppression of black credit crimes in the past have only dealt with subjects who have seriously violated the lives and property of the people. The recommendation in the coming time is that the Ministry of Public Security needs to be more proactive and active in investigation, detection and early warning activities to be able to prevent and limit the serious consequences of illegal credit activities. With the cases that have been discovered, the Ministry of Public Security needs to handle and suppress them more resolutely and strongly, especially after the completion of legal regulations to handle this type of crime;

The Ministry of Information and Communications needs to direct the propaganda activities of mass media agencies as well as direct the Information and Communications agencies in localities to give maximum priority to propaganda content against black credit. Media agencies need to support: (1) systematically propagating and disseminating topics on black credit and measures to prevent black credit, lessons learned on combating black credit in other countries; (2) fully conveying the message about the determination and determination to fight black credit of the Party and the State, of state management agencies and mass organizations at all levels from central to local; (3) propagating and disseminating knowledge so that people can fully perceive and clearly identify black credit as a crime and a social evil, participating in black credit activities is illegal and abetting criminal acts; (4) fully communicating about policy credit programs and preferential credit programs; (5) Full communication of products

and lending activities to limit and eliminate black credit of credit institutions, emphasizing the dissemination of information with guidance, advice, introduction of products and services and implementation methods so that people can clearly understand and easily access these products and "say no" to black credit;

According to the views of some commercial bank leaders, black credit needs digital banking services to be completely resolved because digital banking technology allows financial services in general, including lending, to be deployed 24 hours and 7 days a week at low cost. However, digital banking services can only be developed when there is a certain and synchronous development of technical and information infrastructure, allowing credit institutions and other entities to access databases of the Government, ministries, branches, etc. Thus, preventing and eliminating black credit also requires support from the development of technology organizations and technical infrastructure that allows services to be performed on a big data platform, including national data, business data and citizen data, and databases on banking activities, databases on resources, real estate, etc.; Technology development organizations and regulatory agencies need to enable database sharing with each other to increase convenience and reduce costs, on the basis of decentralized access.

4.3. Limitations of the topic and future research directions

Firstly, the topic of developing credit access for individual business households in two directions: formal credit and informal credit, but not studying semi-formal credit. Therefore, if developing research in the direction of credit access in all three directions: formal, semi-formal and informal, it will cover all issues.

Second, although some issues of access to informal credit have been assessed, in reality, if households access capital from their own groups/clubs/wards/groups, it can be considered semi-formal credit, especially in rural areas, when the commune people's committee manages this activity. These activities based on mutual trust or peer-to-peer credit contribute a large part to the credit of individual business households. Therefore, one of the limitations of the thesis is that it does not deeply assess peer-to-peer credit access or assess the impact of revolving credit lines (ROSCAs). At present, under the strong development of financial technology (fintech), peer-to-peer lending activities based on digital platforms (such as peer to peer lending) are developing very strongly, or crowdfunding is very similar to the activities of their own groups/clubs/wards/groups. If it is possible to develop research in the direction of assessing the intention to use

application or legal mechanism for these activities would fill a large gap.

for household access to credit.

Third, a large number of individual business households that the author studied operate in rural areas or areas with economic difficulties, enjoying many incentives from the state in accessing loans. At the same time, after the Covid 19 pandemic, individual business households are also beneficiaries of loans from the Social Policy Bank or some incentives from commercial banks and grassroots people's credit funds. This contributes to promoting the development of official credit. Although mentioned in the survey section, the thesis does not develop the above issue. Therefore, in the coming time, if it is possible to determine access to preferential credit or credit after a financial crisis or a crisis caused by an epidemic.

Fourth, for the theory of access to credit, the thesis is evaluating quite a lot about income. In fact, for economic growth, modern theories pay attention to some other aspects such as promoting gender equality, regional development... Therefore, it is possible to develop in the direction of the impact of formal credit access on gender equality or national goals such as poverty reduction.

CONCLUDE

Individual business households can expand their production scale and access credit from: (1) informal sources such as borrowing from relatives and friends; (2) formal sources such as borrowing from credit institutions. The differentiation in financial products of credit institutions reflects the strategy and characteristics of each region to meet the different needs of many subjects. In the current conditions, access to formal credit and the role of formal credit institutions are especially important in providing timely capital for households to supplement business capital, ensuring that production processes, business activities and services are developed continuously and sustainably.

Based on the demand-side approach of financial services as well as financial inclusion, the thesis has proposed factors affecting the ability to access formal and informal credit services of individual business households in Vietnam. Firstly, for the formal credit access model, the author has added a variable called “financial literacy” to the model. By adding a variable to the model, it will contribute to enriching the factors affecting the informal credit access of households, as well as the original TPB theoretical model is extended to discouraged behaviors.

In addition, the thesis also makes some practical contributions as proven by experience: such as household head experience, interest rates, distance, electronic banking, etc. all affect the intention to access credit. At the same time, for access to informal credit, social influence, effort, financial knowledge and security have positive impacts. From there, the author proposes some solutions for state management agencies, credit institutions, local organizations and households to increase access to formal credit services as well as limit black credit.

LIST OF AUTHOR'S RESEARCH WORKS RELATED TO THE THESIS TOPIC

1. Le Hoang Anh, Khuc The Anh (2019), “Black credit: empirical evidence from the supply side”, Proceedings of the National Scientific Conference on Limiting Black Credit in Vietnam , National Economics University Publishing House.

2. Le Hoang Anh (2020), "Factors affecting access to formal credit of individual business households", Finance Magazine , Issue 1, September 2020.

3. Le Hoang Anh (2020), "Development basis of informal credit", Corporate Finance , No. 9, 2020.

4. Khuc The Anh, Le Hoang Anh, Pham Thi Nhat Linh (2020), “Access to banking capital of micro-enterprises and household”, 12th NEU-KKU International Conference Socio-Economic and Environmental Issues in development , Labors - social publishing house.

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