The State Bank of Vietnam and Ministry of Agriculture and RuralDevelopment have held discussions on a new stimulus package to boostfarming production chains and apply technology in agriculture.
Asof now, details about the value of the package, incentives, and lendingconditions are yet to be revealed. Major stakeholders are seekinglending mechanisms that can reassure banks to offer loans to farmers anduse the Government's support policy.
Although presently theState Bank encourages credit institutions to offer loans to farmers,they are hesitant because of high risk and the borrowers usually do nothave collateral.
In a cabinet meeting last month, the Governmentrequested the State Bank to work with the Ministries of Agriculture andScience and Technology to outline a credit programme for theagriculture sector that provides preferential loans for models thatpromote the linkage of farming production chains, scientific andtechnological application, and the linkage between production andexport.
Director of State Bank's Credit Department Nguyen VietManh stated that time and detailed regulations were needed to launch anew stimulus package for agriculture.
"To ensure theeffectiveness of the package, they have to review planning on thesub-farming sectors, production areas, and the linkage of input andoutput," he noted, adding that comprehensive examination can lead tosustainable financing or even banks will be able to offer loans toborrowers without the need for mortgage.
The package will also target large-scale production models and land consolidation.
ViceDirector of State Bank's branch in Ho Chi Minh City, Nguyen Hoang Minh,claimed that this year, credit for farming and rural areas will focuson projects that applied technology or are related to farming productprocessing in order to improve the quality and competitiveness of theproducts.
Chairman of Vietnam Farmers' Association Nguyen DuyLuong remarked that although since 2010, the Government has passed adecision on credit for agriculture, rural areas, and farmers, thecrediting was still limited.
Beneficiaries somehow failed to show interest in such preferential loans due to limited access.
Forinstance, banks will not offer another loan if the borrowers did notpay the previous ones, Luong reported, noting that the requirement wastoo strict.
Former Governor of State Bank Cao Sy Kiem statedthat a lending mechanism based on production chain was new butreasonable, as it can meet the capital demands of farmers and farmingenterprises and will help the banks to recover the issued loans.
This will help to avoid scattered loans, he remarked.
Thisyear, loans for agriculture are expected to be worth 35-37 trillion VND(1.67 billion–1.76 billion USD), about 70-85 percent higher than thatof last year. Currently, the interest rate for agriculture loans areless than nine percent per year and the State Bank is encouraging banksto lower the rate.-VNA
Asof now, details about the value of the package, incentives, and lendingconditions are yet to be revealed. Major stakeholders are seekinglending mechanisms that can reassure banks to offer loans to farmers anduse the Government's support policy.
Although presently theState Bank encourages credit institutions to offer loans to farmers,they are hesitant because of high risk and the borrowers usually do nothave collateral.
In a cabinet meeting last month, the Governmentrequested the State Bank to work with the Ministries of Agriculture andScience and Technology to outline a credit programme for theagriculture sector that provides preferential loans for models thatpromote the linkage of farming production chains, scientific andtechnological application, and the linkage between production andexport.
Director of State Bank's Credit Department Nguyen VietManh stated that time and detailed regulations were needed to launch anew stimulus package for agriculture.
"To ensure theeffectiveness of the package, they have to review planning on thesub-farming sectors, production areas, and the linkage of input andoutput," he noted, adding that comprehensive examination can lead tosustainable financing or even banks will be able to offer loans toborrowers without the need for mortgage.
The package will also target large-scale production models and land consolidation.
ViceDirector of State Bank's branch in Ho Chi Minh City, Nguyen Hoang Minh,claimed that this year, credit for farming and rural areas will focuson projects that applied technology or are related to farming productprocessing in order to improve the quality and competitiveness of theproducts.
Chairman of Vietnam Farmers' Association Nguyen DuyLuong remarked that although since 2010, the Government has passed adecision on credit for agriculture, rural areas, and farmers, thecrediting was still limited.
Beneficiaries somehow failed to show interest in such preferential loans due to limited access.
Forinstance, banks will not offer another loan if the borrowers did notpay the previous ones, Luong reported, noting that the requirement wastoo strict.
Former Governor of State Bank Cao Sy Kiem statedthat a lending mechanism based on production chain was new butreasonable, as it can meet the capital demands of farmers and farmingenterprises and will help the banks to recover the issued loans.
This will help to avoid scattered loans, he remarked.
Thisyear, loans for agriculture are expected to be worth 35-37 trillion VND(1.67 billion–1.76 billion USD), about 70-85 percent higher than thatof last year. Currently, the interest rate for agriculture loans areless than nine percent per year and the State Bank is encouraging banksto lower the rate.-VNA
