Prioritizing capital for agricultural and rural development

Currently, in the province, capital for agricultural and rural development dominates in credit programs (accounting for 48.7%). The preferential credit capital has financially facilitated rural people to develop production and business, thereby, contributing to promoting economic development, escaping poverty.

In order to encourage the development of agriculture and rural areas, over the past time, the Government has issued many documents directing the implementation of preferential credit policies for agricultural and rural development, typically Decree 55/ 2015/ND-CP dated June 9, 2015 of the Government on credit policies for agricultural and rural development, Decree No. 116/2018/ND-CP dated September 7, 2018 of the Government amending and supplementing a number of articles of Decree No. 55 on credit policies for agricultural and rural development…

An officer of Agribank Bac Son guides customers through loan procedures

Accordingly, banks in the province have considered agriculture and rural areas as one of the top priority areas in investment and credit expansion. Banks have actively balanced their capital sources to fully and promptly meet the capital needs to serve businesses and people to invest in agricultural economic development and build new rural areas, thereby helping customers in rural areas better access to bank capital.

Lang Son branch of Bank for Agriculture and Rural Development of Vietnam (Agribank Lang Son) is a typical unit in lending serving agriculture and rural areas. By the end of November 2022, Agribank Lang Son’s total outstanding loans have been over 11,770 billion VND, of which, outstanding loans for agriculture and rural areas have accounted for 63% of the total outstanding loans of the branch with 21,964 borrowing households.

Mr. Dinh Manh Tranh, Deputy Director of Agribank Lang Son said: “In order to accompany the people, Agribank Lang Son always actively improves the process, simplifies loan procedures, improves the appraisal capacity to shorten the loan settlement time and facilitates customers to access credit capital. In addition, the branch also offers many convenient products and services for customers, especially ones in rural areas such as opening mobile transaction points in communes, expanding ATM system… in order to provide timely capital for business ideas. Investment capital mainly serves agricultural and rural development activities including planting and tending forests; breeding; developing service business… Thereby, this helps rural people invest in economic development and stabilize their lives.”

Mr. Hoang Van Thoi, Ban Tac village, Binh La commune, Binh Gia district said: “My family has raised buffaloes and fattening cows for many years. However, due to limited capital, my family only raised 3 to 5 ones once. With the informative instruction from the officer of Agribank Binh Gia, in March 2021, my family made preferential loans from Resolution 08 to expand production, with the loan amount of 100 million VND. With capital, my family has expanded the scale of the barn and increased to 12 buffaloes and cows once and we will continue to expand in the near future. Thanks to the expansion of production scale, the family has an income of over 200 million VND/year, double compared to 3 years ago.”

An officer of the Transaction Office of BSP in Loc Binh district disburses loans to people

Not only Agribank, the preferential loan from the provincial branch of the Bank for Social Policies (BSP) has also contributed to the development of agriculture and rural areas in the province. Up to now, the total outstanding loans of 18 preferential credit programs at the Provincial BSP has reached nearly 3,700 billion VND, the number of households with outstanding loans has been 65,995 households. In which, loans invested in agriculture, farmers and rural areas account for 90% of total outstanding loans.

Mr. Pham Manh Ha, Deputy Director of the Provincial Bank for Social Policy, said: “In order to effectively implement capital programs to support poor households and disadvantaged beneficiaries, especially loans for agriculture and farmers, rural areas, we have directed transaction offices of districts and city to introduce about them, to focus on improving the quality of savings and loan groups in each village, to promptly send capital to the right people.”

The proactive implementation of credit policies by banks has contributed to opening up credit capital sources for agriculture and rural areas. Credit of the banking industry to this sector has grown strongly. According to statistics of the Provincial Branch of State Bank of Vietnam, by the end of November 2022, outstanding loans for agriculture and rural development of banks have been 18,794 billion VND (up 1.09% compared to 31 March, 2021), total outstanding customers have been 107,806 (mainly individuals and business households).

With synchronous solutions, bank credit capital has contributed positively to economic restructuring in rural areas and new rural development in the province. From the loan capital, people have invested in production development, building models such as afforestation, fruit tree planting, animal husbandry, etc. It contributes to reducing the average annual poverty rate of the province from 3% to 5%, speeding up the progress of new rural development in the province. Up to now, the whole province has 75/181 communes that meet the standards of new rural areas; 12 communes meeting the standards of advanced new rural areas.

Ms. Truong Thu Hoa, Director of the Provincial Branch of State Bank of Vietnam said: “In the coming time, the State Bank will continue to direct and supervise banks to effectively implement the guidelines of the Government, local Party committees and authorities on agricultural and rural development and support. At the same time, we  will require banks to pay attention to credit investment towards agricultural mechanization associated with new rural building; diversifying products and services, increasing the supply of consumer credit products, serving the needs of people in rural areas. Thereby, they can timely provide, helping people as well as farming households overcome obstacles and difficulties in economic development, contributing to preventing “black credit” in the rural market. Thereby, the role and position of the banking industry will be improved, people’s trust in the industry will be raised.”

To promote agricultural and rural credit in Lang Son province, on December 10, 2019, the Provincial People’s Council issued Resolution No. 08/2019/NQ-HDND, Resolution No. 15/2021/NQ-HDND dated July 17, 2021 on amending and supplementing a number of articles of Resolution 08/2019/NQ-HDND dated December 10, 2019 on specific policies to encourage investment, cooperation development, production linkage and consumption of agricultural and rural products in Lang Son province in the period of 2020 – 2025. Implementing the program to support credit interest rates according to Resolution 08, by the end of November 2022, 587 customers have borrowed a total outstanding loan of 359.7 billion VND, up 121.5% compared to December 31, 2021.