Social Performance and Financial Sustainability Contribute to Implementing Regulations on Operational Objectives of Co-operative Credit Institutions

Abstract

Co-operative Credit Institutions (CCIs) play an important role for achieving the national mission of financial inclusion. Therefore, we should be taking a wider view of social performance and financial sustainability and assessing social performance and financial sustainability. These are factors affecting the CCIs' operations and goals. This study used the panel data regression method with research data from tweenty-four selected CCIs in Vietnam from 2018 to 2024. This study’s purpose to discover the interactive relationship between social performance and financial sustainability in Vietnam's CCIs. The study found that the depth of outreach, deposit-to-loan ratio, financial sustainability have positive relationship with the breadth of outreach, while the age of CCIs has a negative relationship with the breadth of outreach. The age of CCIs, credit size and debt-to-equity ratio have positive relationships with the depth outreach, the financial sustainability has a negative relationship with the depth of outreach. The income and breadth of outreach have positive relationship with financial sustainability; while the depth of outreach, non-performing loan, credit growth negative relationships with the financial sustainability of CCIs. The study results have determined the bidirectional interactions and relationships between social performance and financial sustainability. Through the findings the study offers policy implication and new insights for developing a more sustainable CCIs and further emphasizes optimal policies to CCIs management that helps the policy-makers, CCIs managers and executives in improving the social performance and financial sustainability of CCIs going forward.