Banks direct credit to rural areas

At the recent 8th Congress of the Vietnam Farmers' Union, the Vietnam Development Joint Stock Commercial Bank (HDBank) introduced and launched the HDBank Rural service and officially implemented a rural agricultural loan program with 0% interest rate (during the preferential period) across the system.

Accordingly, this bank invested in designing a digital application specifically for customers in rural areas. In addition to information about products and services for customers who are businesses, cooperatives and farmers, HDBank also integrates agricultural news; training courses, instructions, reference materials for agricultural and rural industries and tools to help businesses, cooperatives and farmers easily manage production and business.

Regarding preferential interest rate credit products, HDBank said that the bank will integrate personal loan products into the HDBank Rural App through the Collaborator program on the HDBank Rural app. Customers download the app to their phones, register to use the service and can access preferential loans with options such as 0%/year in the first month, 4.5%/year in the first 6 months or 6.5%/year in the first 12 months...

In the trend of shifting credit focus to rural agricultural areas as mentioned above, currently, in addition to HDBank, many commercial banks are also paying attention, especially banks with a history of development closely associated with key provinces, cities and agricultural industries.

For example, in recent times, KienlongBank has been one of the banks that has been very active in cooperating with local Farmers' Associations to develop preferential interest rate loan packages. Observations show that currently in the South, KienlongBank has cooperated with Farmers' Associations of An Giang, Ben Tre, Bac Lieu, Kien Giang and many other provinces and cities to expand preferential loans for members of this socio-political organization. The loan amount designed by the bank is at least 20 million VND with a maximum loan term of 60 months and an unsecured interest rate of 10.5%/year. According to KienlongBank, this bank has enough resources to be able to lend to 200,000 members and farmers nationwide.

At LPBank, the situation is similar. This bank has taken advantage of the nationwide postal network to strongly develop agricultural and rural lending products and services. Recently, LPBank has gone one step further, signing a cooperation agreement with the Department of Agriculture of provinces and cities to deploy lending in the form of loan association groups through Farmers' Associations at all levels (a method that Agribank and the Social Policy Bank are implementing).

For other small-scale commercial banks such as NamABank, BacABank, NCB... currently, focusing on rural areas to expand financial and credit products and services is also being focused on and increasingly diversifying options for customers.

BacABank is currently implementing a strong lending package for agricultural production and business to serve business capital and purchase of raw materials for export production. This bank lends with a fairly high limit (10 billion VND) and finances the maximum capital needs of customers with a loan amount equal to 70% of the value of collateral assets of enterprises, agents, and farmers. Meanwhile, NCB focuses on providing consumer finance solutions for small traders, cooperatives, and small farms in rural areas. This bank accepts refinancing loans for customers, using the collateral assets currently mortgaged at other banks as collateral for new loans to restore production and business.

At the large-scale agricultural production at the industry and local levels, according to observations by Banking Times, currently, many commercial banks in the system have focused their products and services on agricultural value chain models.

Major projects of the Ministry of Agriculture and Rural Development such as the Project to build 5 standard agricultural and forestry raw material areas in the period of 2022-2025; the Project to develop 1 million hectares of high-quality low-emission rice have attracted a series of credit institutions to participate in funding and implementing financial cash flow management solutions. Up to now, Agribank has implemented a credit guarantee package, including: wholesale loans through cooperatives, mortgage loans with production and purchasing linkage contracts between 3 parties and loans to cooperatives secured by assets formed from loans and contributed capital of cooperatives.

Other banks such as NamABank, LPBank, HDBank, MB, SHB… have also deployed loans for agricultural value chain linkage models. According to observations, some linkage chains have accessed preferential loans from credit institutions, such as the models of Minh Phu Group, Nam Can, Camimex, Tai Kim Anh…

The above developments show that currently, directing credit to the agricultural and rural areas is the direction chosen by many credit institutions. This, on the one hand, creates opportunities for customers in rural areas to access diverse capital, on the other hand, shows that the potential for expanding banking and financial products and services in provinces and cities is still very large and is expected to have a strong spread in the coming years.

Source: https://thoibaonganhang.vn/nha-bang-huong-tin-dung-ve-nong-thon-159031.html