To create momentum for sustainable development of agriculture and rural areas

In recent times, the policy of "tam nong" (as agriculture, farmers and rural areas) in general and credit to serve the development of agriculture, farmers and rural areas in particular have always been of interest to the Party and State. Determining this as one of the areas requiring priority capital investment, the banking industry has implemented many mechanisms and policies to encourage investment, expand credit, support resources, and create momentum to boost the sustainable development of agriculture and rural areas.

To implement Decree No. 55/2015/ND-CP dated June 9, 2015 of the Government on the credit policy serving agricultural and rural development (Decree No. 55); Decree No. 116/2018/ND-CP dated September 7, 2018 of the Government amending and supplementing a number of articles of Decree No. 55; the credit institutions in the province have synchronously opened up capital sources to the agricultural and rural sectors. If previously there was only the Bank for Agriculture and Rural Development (Agribank) lending to the "tam nong" sector (as agriculture, farmers and rural areas), now in the province there are over 10 commercial bank branches, social policy bank branches and the People's Credit Fund system lending to this field. Banks proactively balance capital sources to fully and promptly meet capital needs to serve businesses and people investing in agricultural economic development and new-style rural construction. Most credit programs for agricultural and rural development have specified the ceiling interest rates for short-term loans in VND, which are currently about 1% - 2% lower than the interest rates for loans in production and business sectors. Ms. Nguyen Thi Hang, Nhat Tan commune (Tien Lu) said: My family develops a pig and aquaculture farm model. Previously, it was very difficult for me to access credit capital. When Decree No. 116/2018/ND-CP took effect, I was able to borrow 150 million VND from Agribank Tien Lu Branch with simple procedures. This capital source helps the family develop production and initially invest in the farm with good results.

Professional activities at Vietcombank Pho Hien Branch

According to data compiled by the State Bank Provincial Branch, since the implementation of Decree No. 116/2018/ND-CP, the outstanding credit debt to the agricultural and rural sector has grown over the years with the growth rate of about 15%/year and is always higher than the overall credit growth rate of the economy. By the end of May 2024, outstanding loans for agricultural and rural development in the province are estimated to reach 44 trillion VND, accounting for 44% of total outstanding loans with over 153.3 thousand outstanding customers.

In addition, consumer credit to serve daily life has been deployed more strongly by credit institutions in rural areas. In particular, Agribank deploys the Consumer Credit Program throughout the system to serve the legitimate and urgent consumption purposes of individual customers and households such as: the need to buy household appliances and equipment, study expenses, medical examination and treatment... With a capital need of no more than 30 million VND, a short capital usage period and customers who can prove the source of debt repayment will be considered by the bank for loans without collateral with reasonable interest rates and same-day disbursement. This consumer credit program contributes to repelling "black" credit in rural areas.

However, the access of bank capital for the agricultural and rural sector still faces such difficulties and obstacles as: Progress in granting certificates of land use rights and assets attached to land is still slow, reducing the opportunity for farmers to mortgage their assets for bank loans. Not only for the poor, some farms, cooperatives and small businesses in rural areas have difficulty in accessing capital because they do not have collateral and cannot meet loan conditions due to production and business plans in lack of feasibility. Along with that, the organization of production according to linked models still shows limitations due to the weak ability of people to cooperate and connect; the number of safe agricultural product chain models is not many; linkage contracts are not tight, making it difficult for credit institutions to control cash flow when lending chains. Some customers borrow money in the form of unsecured loans without collateral, leading to slow debt collection, causing difficulties for credit institutions...

Comrade Dang Sy Hoa, Director of the State Bank Provincial Branch said: "The State Bank Provincial Branch continues to direct credit institutions to consider agriculture and rural areas as one of the top priority areas in investment and credit expansion. Credit institutions need to reform administrative procedures and create favorable conditions for customers to access this credit program." In the current actual situation, when the whole province is making efforts to implement socio-economic recovery and development program, the national target program to build new-style rural areas for the period 2021 - 2025, credit institutions need to build and deploy credit products suitable for farmers and specific agricultural production; promptly remove difficulties and provide utility products applying new technology to suit the needs of people and businesses in rural areas. At the same time, it is necessary to flexibly apply collateral security assets to borrow capital from banks such as: Assets on land (factories), assets formed from loan capital, investment projects... of farmer households, farms, businesses and cooperatives. Mass organizations such as the Farmers' Union, Women's Union, and Youth Union cooperate with local credit institutions to well carry out unsecured loan programs and guide members and customers on how to use loans for the right purpose, promote efficiency in economic development. Credit institutions proactively balance capital resources to promptly meet loan needs for sustainable "tam nong" development.