HCM City (VNS/VNA) - Bank credit has significantly contributed to agricultural and rural development in Ho Chi Minh City, Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam’s HCM City office, told a conference on October 17.

Speaking at the conference held to discuss linking up banks and agricultural enterprises, cooperatives and business households, Lenh said though agriculture accounts for less than 1% of the city's economy, agricultural lands account for over 50% of its land area.

He noted that in its five suburban districts, a tenth of the 500,000 households engage in agriculture, making agricultural and rural development crucial for ensuring social welfare and environmental protection.

In this process, bank credit plays a vital role in meeting the capital needs for agricultural production and rural development, new-style rural construction and agricultural restructuring in line with the city's direction of developing high-tech, clean and urban agriculture, he said.

In addition to general policies supporting businesses, the Government also has specific mechanisms for the agricultural and rural sector like Decree 55 on credit policies for its development and lending programmes for developing new-style rural areas, high-tech agriculture and forestry and fisheries at preferential interest rates and with flexible terms, he said.

Credit injected into the agriculture and rural sector under the decree is worth 345.6 trillion VND (13.8 billion USD), or 8% of total outstanding loans in the city, an increase of 2% so far this year and 14.5% up year-on-year, he said.

Referring to lending for forestry and fisheries, he said banks have disbursed 3.04 trillion VND this year with interest rate 1.5-2% lower than market rates.

He said in the last quarter of each year, there is a significant rise in capital demand, and so the SBV, the city’s Department of Agriculture and Rural Development and the Cooperative Alliance organise the conference to enable the agricultural sector to get access to bank loans.

According to the SBV’s HCM City office, Agribank has lent 993.4 billion VND for forestry and fisheries, high-tech and clean agriculture and the OCOP programme.

At the conference Agribank signed agreements with 20 customers to provide loans worth a total of 70 billion VND.

Lam Ngoc Tuan, Director of the Tuan Ngoc Agricultural Cooperative in Thu Duc city, which grows vegetables and fruits, said the preferential loans meet his cooperative’s funding need. He also expected to get more loans to accelerate automation in farming.

This year, ♍17 banks in the city had registered to participate in the banking-business connection programme and provide preferential loans worth 509.8 trillion VND to various sectors, and have already lent over 490 trillion VND to 153,151 enterprises, cooperatives and household businesses./.