Removing difficulties to expand "agricultural and rural" credit

Adhering to the major policies of the Party and Government on agriculture, farmers and rural areas, in recent years, the banking sector has always identified "agriculture, rural areas" as one of the priority areas for credit capital investment.

Accounts for 25% of total credit capital of the economy

Therefore, there have been many policies and solutions to facilitate increased access to bank credit capital for this sector. Currently, the country has over 90 credit institutions and nearly 1,100 people's credit funds participating in lending for agricultural and rural development, with an expanded network covering remote and isolated areas to help people in economically disadvantaged areas access loans and banking services.

Sharing at the Scientific Workshop with the theme: Financial and credit solutions to promote the rapid and sustainable development of "agriculture and rural areas", Ms. Ha Thu Giang, Director of the Department of Credit for Economic Sectors under the State Bank of Vietnam, said that the State Bank has advised the Government to issue Decree No. 55/2015/ND-CP dated June 9, 2015 of the Government on credit policy serving agricultural and rural development, Decree No. 116/2018/ND-CP dated September 7, 2018 amending and supplementing Decree No. 55/2015/ND-CP to be more suitable to the requirements of restructuring and re-structuring the agricultural sector in the new situation.

After nearly 10 years of implementation, the results of credit investment of the banking system for the agricultural and rural sectors have made an important contribution to the implementation of the goals set out in the Resolutions of the Party and the Government. By ensuring the satisfaction of agricultural production needs from production to purchasing, processing, consumption, export of products to the consumption needs of rural people, it has actively contributed to supporting the growth of GDP of the agricultural sector, increasing export turnover and improving its position in the world market.

Currently, investment credit for agriculture and rural areas accounts for 25% of the total credit capital of the entire economy; nearly 4 times higher after 9 years of Decree 55 being issued. With outstanding debt of enterprises about 31.5%; individuals, households, business households about 68.3%; Cooperatives and other subjects about 0.25%.

As a key lending bank in the agricultural sector, Mr. Hoang Minh Ngoc, Deputy General Director of Agribank, said that by September 30, 2024, Agribank's total outstanding loans reached over 1.6 million billion VND. Of which, outstanding loans for agriculture and rural areas were over 1 million billion VND with 2.8 million customers, more than double that of 2015 - when Decree 55 of the Government began to be implemented. With such results, Agribank is the bank with the largest market share in lending to the agricultural and rural sector in the banking system. Agribank's credit capital has covered 100% of communes nationwide, contributing to promoting economic restructuring in agriculture, forming specialized commodity production areas, creating jobs and improving living standards and income, actively contributing to the cause of hunger eradication, poverty reduction, and new rural construction.

At the Vietnam Bank for Social Policies, Mr. Nguyen Duc Hai, Deputy General Director, shared that thanks to social policy credit capital, poor households and other policy beneficiaries in rural areas, especially ethnic minority and mountainous areas, have developed production and business to escape poverty. The material and spiritual life of rural people has been constantly improved, creating a strong change in poor areas, the appearance of rural areas, remote areas, ethnic minority and mountainous areas has clearly improved.

Overview of the workshop

Promoting credit for agriculture and rural areas

It can be seen that the flow of bank credit has contributed to promoting the reorganization of agricultural production, effectively implementing the restructuring process of the agricultural sector. From there, it has supported people and businesses to invest in expanding production and business, applying mechanization and science and technology to serve production, improving quality, increasing investment in processing to increase the added value of agricultural products.

However, according to Ms. Ha Thu Giang, there are still many difficulties in expanding credit for agriculture and rural areas. For example, there are difficulties in providing cheap, long-term capital. Currently, the main source of capital for credit institutions to lend to this area is capital mobilized from economic organizations and residents, with short terms and market interest rates. Difficulties also come from lending without collateral, limited financial capacity and management capacity of a segment of customers in the agricultural and rural areas, unconvincing production and business plans; the ability to manage cash flow in lending to the agricultural and rural areas still faces many difficulties...

In addition, there are other problems such as climate change is becoming more and more complicated, greatly affecting agricultural production; agricultural and rural infrastructure is still weak, continuing to be a big challenge to the industrialization and modernization of agriculture and rural areas. In the development process, the agricultural sector still has many unsustainable factors, unstable growth; it has not met the requirements of large-scale concentrated commodity production and high standards from the international market. On the other hand, most farmers produce on a small scale, fragmented basis, and lack linkages in production stages...

To support the implementation of credit policies for rural agricultural development, Ms. Giang said that there needs to be synchronous solutions from all levels and sectors from the central to local levels such as insurance policies in agriculture, land issues in agricultural production, building sustainable agricultural linkage chains... "In particular, it is necessary to consider expanding the insured subjects and supporting insurance premiums for farmers cultivating large areas in areas frequently affected by natural disasters and crop failures," Ms. Giang added.

Faced with difficulties in supporting the agricultural sector, Mr. Vu Duy Hung, Deputy Head of the Executive Board of the Farmers' Support Fund, Vietnam Farmers' Union, also recommended that the Government continue to issue credit policies for agricultural, farmer and rural development to create conditions for people to access larger capital sources, longer loan terms with preferential interest rates. At the same time, there should be a mechanism to encourage the banking sector to focus on providing credit to the agricultural and rural areas; creating an environment to attract banks to expand more transaction locations to serve credit provision to people.

Source: https://thoibaonganhang.vn/go-kho-de-mo-rong-tin-dung-tam-nong-156594.html