The total amount of credit available to the agricultural sector hasincreased by 2.1 times to 622 trillion VND (29.6 billion USD), threeyears after a Government decree to improve the flow of credit to farmerscame into effect.
This figure accounts for 18-19 percent of thetotal credit available to every sector, said the Director of the StateBank of Vietnam 's Credit Department Nguyen Viet Manh, during anonline meeting that focused on the demand for credit from agricultureand rural areas on August 15.
The decree became effective in July2010, and has had several positive impacts on farmers, particularly inhelping them get better access to credit, he said.
The creditprogramme has helped to increase the amount of loans from 10 million VND(476 USD) to 50 million VND (2,380 USD) for farmers, from 50 millionVND (2,380 USD) to 200 million VND (9,500 USD) for farm owners and from100 million VND (4,760 USD) to 500 million VND (23,800 USD) forcooperatives without any guaranteed assets.
However, manyinvolved say that the credit policy needs to be complemented to meetdemands from farmers as well as ensuring its efficiency.
The ViceChairman of the Vietnam Farmers' Union, Lai Xuan Mon, said credit forfarmers through the union reached 13 trillion VND (619 million USD),while there are 14 million farming households nationwide. This meansthat only 4 percent of households could access credit.
DeputyDirector General of the Bank for Agriculture and Rural Development(Agribank) Nguyen Tien Dong said that apart from providing loans forfarmers via intermediary groups such as the Farmers' Union, the VietnamWomen's Union or the Vietnam War Veterans Association, the bank's creditdepartment also sent representatives to every commune and village,offering credit to farmers directly.
Credit for farmers via intermediary groups accounted for 17 percent, he said.
When explaining why credit institutions preferred offering loans tobusinesses rather than farmers when they visited rural areas, Dongstressed that farmers are the most vulnerable borrowers because of theimpacts of natural disasters, diseases and their limited managementcapacity.
Concerning the limited operations of local agriculturalbusinesses due to their shortage of capital, Deputy Minister ofAgriculture and Rural Development Vu Van Tam said that not only farmersbut businesses as well, need credit support.
However, apart fromState assistance, businesses should take advantage of tradeopportunities and study the market to introduce appropriate productionand trade strategies, he said.
Most businesses operating inagriculture in Vietnam still fail to work closely with the farmersto boost production, he added.
When asked about the debts run upby agricultural businesses, Tam said that the Government has instructedall banks to review the debts of big businesses and restructure themfollowing their own individual plans.
He pointed to the need tointroduce measures to tackle difficulties in the consumption of farmproducts and develop the market for agricultural businesses.
"Thenext credit policies should have different credit programmes for eachkey agricultural product such as "tra" fish, rice and coffee," he said.
Tam also proposed a credit policy for fishermen, which he said isan important sector that also contributes to protecting nationalsovereignty, but is facing very high risk.
Manh stated that thebanking system will continue to relax the tax laws and will allow fordelays and reduced payments for bad debts from now until the end of theyear.
The State Bank of Vietnam is working with severalGovernment agencies to draw up new agricultural credit programmes thatfall in line with the production processes used by farmers, he said.-VNA
This figure accounts for 18-19 percent of thetotal credit available to every sector, said the Director of the StateBank of Vietnam 's Credit Department Nguyen Viet Manh, during anonline meeting that focused on the demand for credit from agricultureand rural areas on August 15.
The decree became effective in July2010, and has had several positive impacts on farmers, particularly inhelping them get better access to credit, he said.
The creditprogramme has helped to increase the amount of loans from 10 million VND(476 USD) to 50 million VND (2,380 USD) for farmers, from 50 millionVND (2,380 USD) to 200 million VND (9,500 USD) for farm owners and from100 million VND (4,760 USD) to 500 million VND (23,800 USD) forcooperatives without any guaranteed assets.
However, manyinvolved say that the credit policy needs to be complemented to meetdemands from farmers as well as ensuring its efficiency.
The ViceChairman of the Vietnam Farmers' Union, Lai Xuan Mon, said credit forfarmers through the union reached 13 trillion VND (619 million USD),while there are 14 million farming households nationwide. This meansthat only 4 percent of households could access credit.
DeputyDirector General of the Bank for Agriculture and Rural Development(Agribank) Nguyen Tien Dong said that apart from providing loans forfarmers via intermediary groups such as the Farmers' Union, the VietnamWomen's Union or the Vietnam War Veterans Association, the bank's creditdepartment also sent representatives to every commune and village,offering credit to farmers directly.
Credit for farmers via intermediary groups accounted for 17 percent, he said.
When explaining why credit institutions preferred offering loans tobusinesses rather than farmers when they visited rural areas, Dongstressed that farmers are the most vulnerable borrowers because of theimpacts of natural disasters, diseases and their limited managementcapacity.
Concerning the limited operations of local agriculturalbusinesses due to their shortage of capital, Deputy Minister ofAgriculture and Rural Development Vu Van Tam said that not only farmersbut businesses as well, need credit support.
However, apart fromState assistance, businesses should take advantage of tradeopportunities and study the market to introduce appropriate productionand trade strategies, he said.
Most businesses operating inagriculture in Vietnam still fail to work closely with the farmersto boost production, he added.
When asked about the debts run upby agricultural businesses, Tam said that the Government has instructedall banks to review the debts of big businesses and restructure themfollowing their own individual plans.
He pointed to the need tointroduce measures to tackle difficulties in the consumption of farmproducts and develop the market for agricultural businesses.
"Thenext credit policies should have different credit programmes for eachkey agricultural product such as "tra" fish, rice and coffee," he said.
Tam also proposed a credit policy for fishermen, which he said isan important sector that also contributes to protecting nationalsovereignty, but is facing very high risk.
Manh stated that thebanking system will continue to relax the tax laws and will allow fordelays and reduced payments for bad debts from now until the end of theyear.
The State Bank of Vietnam is working with severalGovernment agencies to draw up new agricultural credit programmes thatfall in line with the production processes used by farmers, he said.-VNA
