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Central bank to ease loan subsidy conditions for farmers
Eligibility requirements for government-subsidized loans would be amended so more farmers can access them, central bank governor Nguyen Van Giau said Friday.
Local banks have lent farmers about VND1.5 trillion (US$84.3 million) so far under the government loan subsidy program, a much smaller sum compared to loans taken by beneficiaries of other similar programs, Giau told Tuoi Tre newspaper.
The Vietnamese government is implementing a stimulus plan it values at more than $8 billion to meet the proposed goal of 5 percent economic growth in 2009.
As part of the plan, the government launched a subsidy program for farmers on May 1. Under the initiative, farmers can get interest-free loans to buy domestically-produced agricultural tools and machinery. They can also obtain an interest rate subsidy of 4 percent for purchases of other agricultural supplies and house-building materials.
Giau said he was informed that farmers were finding it hard to apply for subsidized loans because of the stipulation that they could only buy locally-made agricultural machinery with the funds.
“The products that the Ministry of Industry and Trade allows farmers to buy [to be eligible for the loan subsidy] are very limited while there are a wide range of other such products on the market,” Giau said.
“The definition of locally-made products is also an issue as the Ministry of Industry and Trade requires the products to be manufactured completely by Vietnamese firms while in some cases the local content ratio of a product is only around 40 percent.”
Giau said he has worked with Minister of Industry and Trade Vu Huy Hoang and amendments to those requirements are expected to be issued in a few days.
Answering a question about the stringent procedures followed by many banks when granting loans for farmers, the central bank chief said it is necessary for banks to do so. Commercial banks are the ones offering the loans while the State Bank of Vietnam only subsidizes the interest, Giau added.
The central bank does not put a cap on the money farmers want to borrow and banks will decide how much they can lend in accordance with banking regulations, Giau said.
But he admitted, “Some banks are very reserved about providing loans [for farmers],” adding that the central bank would punish any discrimination in this regard.
On its website last week, the State Bank of Vietnam said it would inspect the nation’s commercial banks to gauge the extent of their cooperation with the government’s loan-subsidy stimulus program, their foreign currency trading, and general credit activities. The inspections began on June 10 and will continue until the end of this year.
The central bank governor also said he has reported to Prime Minister Nguyen Tan Dung about the difficulties farmers have to face when trying to get the paperwork signed by local authorities.
Commune or ward authorities have been assigned to decide which farmers are eligible for the loans to ensure the equipment is used for farming and not for hired out or sold. However, Giau said this is a hard task, so authorities were reluctant to follow through.
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Average grades from the company’s mines at Bong Mieu and Phuoc Son in the central province of Quang Nam improved to 11.65 grams per ton in May from 4.41 grams per ton in January, Olympus Pacific said.
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thanhnien
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