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Mekong Delta growth increase planned
The State Bank of Viet Nam (SBV) plans to create new, more open credit mechanisms that will inject more money into the Cuu Long (Mekong) Delta to address its infrastructural shortcomings and contribute to its poverty alleviation efforts.
SBV Governor Nguyen Van Binh said at a recent press conference that agriculture and rural development, particularly food and fisheries sectors in the Mekong region had achieved several impressive results in recent years.
This could be seen in the past when the delta only ensured supplies of rice and fisheries products for consumption on the spot, but now it has developed into a large-scale commercial commodity production area capable of ensuring sufficient supplies for both domestic and overseas markets, Binh said.
However, infrastructure in the delta was very poor and local people still had very low living standards, he said.
Binh said the delta, has, for many years now, received financial support from a few credit institutions, mainly the Agriculture and Rural Development Joint stock Commercial Bank (Agribank) and the Bank for Investment and Development of Viet Nam (BIDV).
However, this has not been enough; and to enable the region to upgrade its local infrastructure systems, the central bank would co-operate with the Ministry of Agriculture and Rural Development, the Southwestern Regional Steering Committee and local authorities to establish new credit mechanisms that would be more open and flexible, he said. The current credit activities and services in the region will be kept unchanged, but the central bank will ask commercial banks to provide new loans for key projects such as construction of rice silos and frozen storage facilities, production of export-oriented rice, and enhancement of seafood processing capacity.
These infrastructure facilities would help add value to the delta's export-oriented agricultural and fisheries products, and reduce speculative practices so as to generate more profits for farmers.
Major banks, in fact, have already been asked to step up the disbursement of capital for rural and agricultural development projects, particularly in the Cuu Long (Mekong) Delta region, Binh said.
Next year, Agribank, while retaining its main role in providing credit for rural and agricultural projects, will increase credit for these sectors from the current 60 per cent to 80 per cent of its lending.
The central bank would also require other banks to set aside 20 per cent of their total loans to rural and agricultural projects, he said.
Those that were not able to directly grant loans for rural and agricultural projects in provinces would have to transfer capital equivalent to 20 per cent of their total loans to Agribank, he added.
The central bank governor said that in the last 10 months, the entire banking sector's credit growth had not yet reached 10 per cent, but credit growth in rural and agricultural areas had climbed to 32 per cent, making it possible for localities to create more commodities and generate employment.
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