Unblocking credit flows into agriculture and rural areas

Decree 55/2015/ND-CP of the Government on credit policy for rural agricultural development is playing an important role in clearing credit flows, contributing to promoting production and shifting economic structure in a positive direction.

State Bank of Vietnam, Son La Province Branch evaluates the implementation of Decree 55/2015/ND-CP.

Putting policy into practice

In line with Decree 55/2015/ND-CP of the Government, the State Bank of Vietnam, Son La Branch, issued documents directing credit institutions and requested departments, branches, socio-political organizations, and unions to coordinate in implementation. At the same time, it guided customers on loan procedures for agricultural and rural development.

Implemented 26 working programs, dialogues, connecting credit institutions with nearly 400 enterprises, cooperatives, business households, removing difficulties and obstacles in borrowing capital. At the same time, credit institutions in the area integrated with other policies of the Government and the province, such as: Support to reduce losses in agriculture; develop agriculture, forestry, fishery, clean agriculture; high-tech agriculture... with preferential interest rates according to regulations, ensuring effectiveness.

Since 2015, credit institutions have adjusted the maximum short-term lending interest rate in Vietnamese Dong for loans in priority sectors more than 10 times under the direction of the State Bank of Vietnam. The short-term lending interest rate for agricultural and rural development for customers who meet the prescribed conditions has been deeply reduced from 7%/year (2015) to 4%/year (2023), lower than the normal lending interest rate by about 3-5%/year.

Vietnam Bank for Agriculture and Rural Development, Son La Branch, over the past 8 years, has served over 33,000 customers with outstanding loans of nearly VND 11,500 billion. Mr. Nguyen Thanh Hai, Deputy Director of Agribank Son La, said: Branches in the province have implemented policies to encourage investment, expand credit, and provide maximum support for resources for people in rural areas. Timely supplement credit limits to customers, serving the needs of life, production and business in the agricultural and rural sectors; support customers to overcome difficulties in production and business, such as: restructuring debt repayment terms, exempting and reducing interest, and granting new loans.

Hoa Muoi Cooperative, Chieng Khoong Commune, Song Ma District uses loan capital effectively to invest and expand longan growing area.

In 2017, Mr. Luong Van Muoi, in Chieng Khoong commune, Song Ma district, established Hoa Muoi Agricultural Service Cooperative. The Cooperative received a loan of 400 million VND from Agribank, Song Ma district branch, to invest in developing longan cultivation and raising buffalo and cows. By 2022, it will continue to borrow 1 billion VND to graft and renovate 4 hectares of golden longan; install a drip irrigation system on 7 hectares of longan; and open a store supplying fertilizers and pesticides. Mr. Muoi said: Currently, the Cooperative's revenue reaches over 10 billion VND/year. To achieve that result, the Cooperative is always given priority to borrow preferential capital to invest in agriculture. The Cooperative is continuing to complete procedures to borrow an additional 3 billion VND to invest in purchasing agricultural products and expanding the longan processing facility.

In the 2016-2023 period, the total capital mobilized locally reached VND34,113 billion, an increase of VND23,057 billion, equivalent to an increase of 2.09 times compared to the beginning of 2016, with an average annual growth rate of 15.12%. Outstanding credit policy loans for agricultural and rural development in the 2016-2023 period grew well. By the end of 2023, outstanding loans for agricultural and rural development reached VND22,186 billion, an increase of VND10,080 billion compared to 2016, with an average growth rate of 7.87%.

Use lending resources effectively

With financial resources for implementing lending policies for agricultural and rural development mainly being mobilized capital in the area, credit institutions should proactively use lending resources effectively, fully meeting the capital needs of people, businesses, and cooperatives that need to borrow capital for production and business.

Currently, Son La province has shifted its agricultural structure towards commodity production, developing fruit trees, agriculture associated with value chains, and applying high technology. Initially, specialized and concentrated areas have been formed, associated with processing and consumption markets, attracting investors to production and processing. The whole province has 17 factories, 543 agricultural processing facilities; 280 safe food supply chains, 28 agricultural products with protection certificates; 154 OCOP products, of which 1 product has 5 stars; 56 products have 4 stars and 97 products have 3 stars; 16 agricultural products have been exported: coffee, tea, mango, longan, passion fruit... to 12 countries, including some demanding markets such as Australia, France, the US, Japan...

Transaction session of Agribank Son La city in Chieng Xom commune.

Mr. Le Cao Cuong, Deputy Director of the State Bank of Vietnam, Son La Province Branch, said: The implementation of Decree 55/2015/ND-CP in Son La Province still has difficulties and obstacles, such as: Customers need to borrow a lot of capital but do not have collateral or if they do, the value is low, the assets are not eligible for mortgage; the number of customers and outstanding credit loans for farm economy and cooperative economy still account for a low proportion, under 2%...

It is noted that the implementation of Decree 55/2015/ND-CP over the past 8 years has significantly contributed to the socio-economic development of Son La province, contributing to maintaining economic growth, shifting the province's economic structure in a positive direction, the multidimensional poverty rate has decreased from 34.44% in 2015 to 14.17% in 2023.

Closely following the socio-economic development orientation of the province and Plan No. 115/KH-UBND dated April 14, 2022 of the Provincial People's Committee on focusing capital sources on lending to enterprises, cooperatives, individuals in rural areas, investing in key economic programs... Son La Provincial Banking sector continues to implement credit policies to serve agricultural and rural development in accordance with the locality and new policies of the Party and State; functional departments and branches strengthen supervision, inspection, and monitoring of policy implementation, ensuring safe and effective credit activities. Promote capital mobilization in the economy, create more resources, effectively implement credit policies to serve sustainable agricultural and rural development of Son La.

Quynh Ngoc

Source: https://baosonla.org.vn/kinh-te/khoi-thong-dong-von-tin-dung-vao-khu-vuc-nong-nghiep-nong-thon-bh23WHzHg.html