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Banks bringing capital to rural areas, but indecisively
Banking experts have expressed their concern that commercial banks are not paying attention to the development of the rural market as the area deserves to be a large market with great potential.
To date, only the Bank of Agriculture and Rural Development of Vietnam (Agribank) has exploited rural areas. Other commercial banks, though having opened many new branches, are still leaving rural areas unexploited. Only Agribank currently has district-level bank branches.
Banks have been trying to expand their operation networks in an attempt to expand their market share. As banks have been focusing in setting branches in economic centers and commercial hubs, these areas have become full of bank branches. The density of bank branches in the areas has led to the fact that a lot of bank branches have been operating ineffectively, thus affecting the operation of the whole system.
In fact, eyeing the rural areas proves to be the reasonable solution for banks now, as the areas have not been fully exploited.
Nguyen Duc Huong, General Director of Lien Viet Bank, said that once banks have profuse capital they should think of bringing the capital to rural areas, a very large and safe market.
Huong said that it was not by chance that Lien Viet decided to set up its headquarters in the southern province of Hau Giang, the granary of the Mekong River Delta. The locality helped the bank reap its initial achievements.
Dai A Bank, which has just changed from a rural bank to an urban bank, also said that it will expand its network in provinces. The bank has opened its Dinh Quan transaction office at Dinh Quan town in Dong Nai Province. This is the 19th transaction office of Dai A bank in Dong Nai province. The Dinh Quan office will target clients who are from small- and medium-scale production households, serving tourists and local residents.
However, there have not been many banks that planning to expand their networks to rural areas. Commercial banks, though having been aware of the potential of the rural areas, still are not ready for developing services in the areas.
Even joint-stock banks, which have always tryied to expand their branch coverage, focus their attention on urban areas with high living standards. The banks said that the branches in the ‘rich’ areas always bring high efficiency
“The clients in industrial zones and factories with large-scale projects have been more attractive for us than the small-scale projects in rural areas,” said a director of a joint stock bank.
Dau Tu Chung Khoan
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