[Emagazine] Agribank – a support for customers to recover after storms and floods

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[Emagazine] Agribank – a support for customers to recover after storms and floods

It has been more than a month since storm No. 3 ( Yagi ) occurred, and the consequences are still huge. As a bank that lends mainly to the agricultural sector, both Agribank and its customers have suffered heavy losses. As of September 26, 2024, more than 28,200 customers borrowing from Agribank were affected by storm No. 3 with outstanding loans affected by over VND 40,000 billion, of which the expected loss is over VND 14,600 billion. This is also the time when people and businesses need the support of banks more than ever.

According to the Ministry of Planning and Investment , the historic storm Yagi has caused huge losses in human lives and property. As of September 27, 334 people have died and gone missing, nearly 2,000 people have been injured. The total economic damage is estimated at over VND81,000 billion. Of which, about 282,000 houses, 3,755 schools and school sites were damaged, had their roofs blown off, were flooded, and were buried due to landslides. A series of infrastructure works, bridges, roads, etc. collapsed. Storms and floods also caused severe psychological trauma to many people in disaster areas, especially children, the elderly, and vulnerable groups.

As a bank with the second largest lending market share in the system, operating mainly in agricultural and rural areas, Agribank was heavily affected by storms and floods. Currently, Agribank's outstanding loans for agriculture and rural areas have reached over 1 million billion VND (accounting for 62.4% of the total outstanding loans for agriculture and rural areas of the entire system).

Through preliminary statistics on operations, damage, and impacts on customers due to the storm; As of September 26, 2024, Agribank has a total of over 28,200 borrowers affected by storm No. 3, with an estimated affected outstanding debt of over VND 40,000 billion, of which the expected damaged outstanding debt is over VND 14,600 billion of over 18,100 customers.

In Quang Ninh, as of September 26, 2024, it is estimated that 4,512 loan customers in the area were affected (96% of whom were individuals and households), with a total outstanding debt of VND 9,287 billion, and a total outstanding debt of VND 3,851 billion with 4,412 customers.

In Bac Giang, preliminary statistics up to September 16, 2024, there are 8,311 customers borrowing capital from Agribank suffering losses, with an estimated affected debt balance of VND 2,013 billion; the expected damaged debt balance is over VND 1,500 billion. In Phu Tho, there are a total of 576 customers borrowing capital suffering losses, with an estimated affected debt balance of over VND 338 billion; the expected damaged debt balance is over VND 120 billion; Thai Nguyen has 700 customers borrowing capital with an estimated damaged debt balance of over VND 275 billion...

Damage figures may continue to increase in the coming time as some areas are still recovering from the storm, branches have not yet fully accounted for customers, and some localities are still struggling to cope with flood waters...

Not only customers' assets were damaged, but most of Agribank branches in the northern provinces were also affected by storm No. 3. In particular, branches in the provinces/cities of Quang Ninh, Hai Phong, Thai Binh, Tuyen Quang, Lao Cai, Thai Nguyen, Yen Bai... suffered a lot of property damage due to storms and floods. Preliminary estimates of property damage at some Agribank branches are about 80 billion VND (as of September 26, 2024).

From the first working day after storm No. 3 (September 9, 2024) until now, Agribank has immediately organized many delegations to go directly to localities damaged by storms and floods to grasp the situation, directly encourage and support people, customers and employees.

The General Director, Deputy General Directors and leaders of units at the Head Office personally worked directly in: Quang Ninh, Hai Phong, Hai Duong, Thai Binh, Tuyen Quang, Yen Bai, Lao Cai... to grasp the business situation, specifically assess customer losses and promptly take measures to support customers: restructure debt repayment terms, consider exempting or reducing interest and fees.

Sharing with the General Director of Agribank, Mr. Pham Van Nhieu (Tien Minh commune, Tien Lang district, Hai Phong city) said that storm No. 3 caused his family to lose about 200 tons of fish fry, fish meat (including catfish, sturgeon and red tilapia) and 3 camps, estimated damage of 13 billion VND. Mr. Nhieu's family's wish is for the bank to restructure the debt and provide new loans to restore production.

Understanding customers' expectations, right after the storm, Agribank on the one hand promoted social security work, directed Agribank Insurance Company (ABIC) to promptly carry out procedures to compensate customers for damages, and on the other hand, implemented a series of timely support policies for customers, classified according to the level of damage.

Specifically, on September 13, 2024, the Bank issued Document 12757/NHNo-TD on customer support solutions. Accordingly, for loans with outstanding balances, Agribank will base on the level of damage of customers affected by storm No. 3 and floods to adjust the interest rate down from 0.5% - 2%/year and reduce 100% of overdue interest, late payment interest in the period from September 6, 2024 to December 31, 2024; reduce 0.5%/year of lending interest compared to lending interest for loans arising from September 6, 2024 to December 31, 2024.

As of September 27, 2024, the total number of customers receiving interest reduction under the Program is over 8,600 customers, with a total outstanding debt of over VND 8,200 billion, and a reduction of VND 103 billion in interest. In the coming time, Agribank will continue to reduce interest rates and provide new loans to customers affected by storms and floods.

Currently, Agribank is continuing to implement measures to remove difficulties and support affected customers whose losses have been identified, such as: Reducing loan interest rates for 13,623 customers with a total outstanding debt of VND 17,332 billion; Restructuring debt repayment terms for 1,914 customers with a total outstanding debt of VND 2,268 billion; Providing new loans to 386 customers with a total outstanding debt of VND 425 billion.

Debt restructuring, debt term adjustment, and debt extension are extremely practical solutions, helping customers extend loan terms, reduce debt pressure, and give customers more time to restore production, generate revenue, and gradually repay bank loans.

Ms. Phung Thi Binh, Deputy General Director of Agribank said: “Agribank is the main bank investing in the agricultural market, farmers, and rural areas, so the priority target we are targeting is still the “three farmers” group. If we do not share in the most practical way at this time with our compatriots and customers, we do not know when we will be able to fulfill our mission. Therefore, we will consult with the Government, synthesize and report to the Government and the State Bank to have solutions and suitable packages for customers to choose from.”

In addition to the policies that Agribank is applying for loans according to Decree 55/2015/ND-CP of the Government, for localities affected by widespread natural disasters, Agribank is consulting with provinces, guiding customers to determine the damage, working with local authorities to complete the documents, and the State to decide on debt forgiveness for customers. According to regulations, in order for customers to borrow capital, the Provincial People's Committee must issue a written notice of the situation of natural disasters and epidemics occurring on a large scale, after which the banking sector can guide the next procedures.

At the meeting with the People's Committee of Quang Ninh province on September 30, Chairman of the Board of Directors of Agribank Pham Duc An requested local authorities at all levels to promptly establish a council to assess the damage caused by storm No. 3 to people in the areas, create conditions to confirm the damage records for people so that the bank can complete debt settlement records for customers with outstanding debts at the bank who suffered damage due to the storm; strengthen the activities of organizations such as the Women's Union, Farmers' Association... to support households damaged by the storm, guarantee people and production households access to credit capital, have the opportunity to restore production or change occupations and business fields.

In Quang Ninh alone, Agribank has restructured the repayment period for 28 customers with a total outstanding debt of VND 73.6 billion; reduced interest rates for 1,788 customers with a total outstanding debt of VND 4,630 billion, the interest reduction amount is VND 6.45 billion; provided new loans to 52 customers with a total outstanding debt of VND 112 billion. It is expected that in Quang Ninh, Agribank will reduce interest rates for 4,228 customers with a total outstanding debt of VND 8,828 billion; restructured the repayment period for 476 customers with a total outstanding debt of VND 993 billion; provided new loans to 197 customers with a total outstanding debt of VND 159 billion.

Agribank’s timely, urgent and active intervention in supporting customers to recover after the storm was highly appreciated by localities. Debt restructuring policies, interest rate reductions, and low-interest credit packages were promptly implemented to help the local economy rebuild after the storm.

When most of their assets have been swept away by storms and floods, the greatest wish of people in disaster-hit areas is for banks to continue to place their trust in them and provide new loans to restore production and stabilize their lives.

Ms. Ngo Thi Thuy, Thong Nhat 2 Quarter, Tan An Commune said that her family invested in 60 fish farms, each with about 500 fish in Cam Pha and 45 fish farms in Giang Wharf (Quang Yen, Quang Ninh), but so far, all assets have been swept away by floods, causing damage of about 12 billion VND.

“The family borrowed 4 billion VND from Agribank to invest in a fish raft. Now, we just hope that the bank will postpone the debt, extend the debt, and give us a new loan so that we can recover. If the bank trusts us to lend us the capital to quickly buy young fish and release them in time, then in just 2 years, we can recover and have money to pay off the bank debt,” Ms. Thuy said.

In response to customers' expectations, Agribank is actively developing new credit programs with appropriate interest rates, continuing to provide new loans to support customers in restoring production and business after the storm according to Agribank's support policies, regulations of the State Bank and current laws.

It is known that as of September 27, 2024, Agribank has provided new loans to customers affected by storms and floods, reaching over 900 new loans, with outstanding new loans with preferential interest rates of about 1,000 billion VND.

The bank is also implementing many programs to support interest rate reduction for customers borrowing capital in the coming time. Accordingly, for loans arising from September 7, 2024 to December 31, 2024, the bank will reduce the lending interest rate by 0.5%/year compared to the lending interest rate for each subject and field that the branch is applying at the time of disbursement for a maximum period of 6 months from the date of disbursement. Coordinate with branches to submit to the General Director cases proposing a higher interest rate reduction of 0.5%.

Notably, for customers who have outstanding debts at Agribank and unfortunately lose all their assets, but want to continue borrowing new loans, the bank will continue to lend without collateral on the basis of being able to manage the customer's income.

The bank also plans to launch a preferential loan package of VND10,000 billion for individual customers who grow and care for plants and livestock, from now until December 31, 2024; The lending interest rate is lower by a maximum of 1.0% to 1.5%/year according to regulations.

In addition, Agribank is implementing many preferential programs with low interest rates for corporate and individual customers nationwide such as: preferential loan package of 50,000 billion VND for small and medium enterprises; loan package of 60,000 billion VND for large enterprises; loan package of 20,000 billion VND for export enterprises..., with average interest rates of only 3-7%/year.

For individual customers, Agribank is also implementing many preferential loan programs with lending interest rates lower by a maximum of 1.5%/year to 2%/year as prescribed. In addition to practical support solutions for customers such as debt restructuring, debt forgiveness, and new loans, Agribank is also one of the most active banks in social security funding. To date, the total amount of social security funding and overcoming the consequences of storm No. 3 by Agribank is 54 billion VND.

It can be said that Agribank's timely support is not only financial support, but also spiritual support, helping people and businesses in disaster areas to confidently overcome difficulties, regain their spirit to restore production and stabilize their lives.