Hanoi (VNA) – The State Bank of Vietnam (SBV) will launch moreeffective credit programmes to support agricultural production and improvelocal livelihoods, making contributions to boosting economic growth whilewiping out black credit in rural areas.

SBV Deputy Governor Dao Minh Tu said high-tech agricultural developmentprogrammes as well as agricultural production in value chain to increase addedvalue will be prioritised as part of the agricultural shake-up project.

“The SBV sees agriculture and rural areas as top priority in its creditprogramme. It has directed credit institutions to improve procedures for loanaccess and paid due attention to branching out mobile banking model in remoteareas, creating favourable conditions for local people to have better access tocapital and other banking services,” Tu said.

Currently, 70 commercial banks, more than 1,100 people’s credit funds and theVietnam Bank for Social Policies (VBSP) provide loans for rural economicdevelopment. Credit services are available even in mountainous and remote areasthanks to the mobile banking models of the Vietnam Bank for Agriculture andRural Development (Agribank) and transaction offices of the VBSP.

Tu said debt in the agriculture and rural sector has enjoyed steady growth inthe past decade at 20 percent. As of December 2018, the amount was estimated at1.78 quadrillion VND (76.72 billion USD), a quarter of all total outstandingdebts.

The VBSP is carrying out 20 credit programmes for impoverished households andpolicy beneficiary families, including 17 for agricultural development.

In past years, the credit programmes have provided farmers with capital tobranch out their business, thus promoting growth of the agro-forestry-fisherysector, which stood at 3.76 percent in 2018, the highest level in six years.

However, Tu said lending in this sector is risky while there is no strongmechanism to hedge risks. This will affect the bank’s financial situation ifborrowers are not able to clear their debts, especially when they facemisfortune in their production.

Tu suggested relevant sectors evaluate and forecast market demands foragricultural products, enhance trade promotion and help agricultural firms findmarkets for their products.

Attracting preferential loans and financial support from foreign organisationis also a good measure to assure capital for the sector as well, he said.-VNA