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Access to loans gives farmers a lift
The total amount of credit available to the agricultural sector has increased by 2.1 times to VND622 trillion (US$29.6 billion), three years after a Government decree to improve the flow of credit to farmers came into effect.
This figure accounts for 18-19 per cent of the total credit available to every sector, said the Director of the State Bank of Viet Nam's Credit Department, Nguyen Viet Manh, during an online meeting that focused on the demand for credit from agriculture and rural areas yesterday.
The Decree became effective in July 2010, and has had several positive impacts on farmers, particularly in helping them to get better access to credit, he said.
The credit programme has helped to increase the amount of loans available to farmers from VND10 million ($476) to VND50 million ($2,380), from VND50 million ($2,380) to VND200 million ($9,500) for farm owners and from VND100 million ($4,760) to VND500 million ($23,800) for co-operatives without any guaranteed assets.
However, many involved say that the credit policy needs to be complemented to meet demands from farmers as well as ensuring it is efficient.
The Vice Chairman of the Viet Nam Farmers' Union, Lai Xuan Mon,said credit for farmers through the Union reached VND13 trillion ($619 million), while there are 14 million farming households nationwide. This means that only 4 per cent of households could access credit.
The Deputy Director General of the Bank for Agriculture and Rural Development (Agribank) Nguyen Tien Dong, said that apart from providing loans for farmers via intermediary groups such as the Farmers' Union, the Viet Nam Women's Union or the Viet Nam War Veterans Association, the bank's credit department also sent representatives to every commune and village, offering credit to farmers directly.
Credit for farmers via intermediary groups accounted for 17 per cent, he said.
When explaining why credit institutions preferred offering loans to businesses rather than farmers when they visited rural areas, Dong stressed that farmers were the most vulnerable borrowers because of the impacts of natural disasters, diseases and their limited management capacity.
Concerning the limited operations of local agricultural businesses due to their shortage of capital, Deputy Minister of Agriculture and Rural Development Vu Van Tam said that not only farmers but businesses as well, needed credit support.
However, apart from State assistance, businesses should take advantage of trade opportunities and study the market to introduce appropriate production and trade strategies, he said.
Most businesses operating in agriculture in Viet Nam still fail to work closely with the farmers to boost production, he added.
When asked about the debts run up by agricultural businesses, Tam said that the Government had instructed all banks to review the debts of big businesses and restructure them following their own individual plans.
He pointed to the need to introduce measures to tackle the difficulties in the consumption of farm products and develop the market for agricultural businesses.
"The next credit policies should have different credit programmes for each key agricultural product such as "tra" fish, rice and coffee," he said.
Tam also proposed a credit policy for fishermen, which he said was an important sector that also contributed to protecting national sovereignty, but is facing very high risk.
Manh stated that the banking system would continue to relax the tax laws and will allow for delays and reduced payments for bad debts from now until the end of the year.
The State Bank of Viet Nam was working with several Government agencies to draw up new agricultural credit programmes that fall in line with the production processes used by farmers, he said.
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