Sunday, 19 Nov 2017

Hi-tech agriculture attracts more capital from banks

Updated at Friday, 06 Jan 2017, 09:23
The Hanoitimes - The State Bank of Vietnam (SBV) has devised a credit package worth 50 trillion VND for high-tech and clean agriculture production, which has been assigned to the Bank for Agriculture.
Hi-tech agriculture needs proper credit package
Mr. Dao Minh Tu, Deputy Governor of the State Bank of Vietnam (SBV) said the SBV has lowered interest rates for agriculture loans over the past several years.
Accordingly, the rate dropped from 20 percent per year in 2011, to 12 percent per year in 2013. This year the rate stands at the lowest ever - 6.5 to 8 percent per year, he noted.

Ilustrative image
Ilustrative image
Since November last year, the Agriculture and Rural Development Bank (Agribank) has been preparing 50 trillion VND to serve individuals, households, collectives and enterprises producing hygienic, safe food, he added.
Such individuals and other entities can get loans at interest rates of zero to 1.5 per cent per year.
Three years ago, the State Bank of Vietnam assigned Agribank to lend loans on a pilot basis to enterprises applying advanced technology in agriculture. So far 28 enterprises with 31 projects in more than 22 provinces and cities have been selected to join the programme.
In addition, in the recent time, some key banks have been interested in funding to the agricultural sector, especially high-tech agriculture. For example, the proportion of agricultural loans accounts for about 9-10% of total loans of Vietcombank.
The BIDV's rate of agricultural credit balance of total loans rose from 5.82% in 2010 to 15.75% as of  September 30, 2016.
The Agribank has implemented seven credit policies and one national programme for developing new rural areas. Farmers get priority for loans at lower interest rates. Currently, the  proportion of agricultural loans in Agribank accounts for more than 73%.
Lienvietpostbank also said it would deploy 10,000 billion credit package for preferential loans to customers investing in agricultural crop production and high-tech industry.
However, most of credit packages for hi-tech agriculture has been implemented by some commercial banks with large capital.
Businesses operating in hi-tech agriculture are expecting to a true support credit package.
Creating favourable lending mechanism for businesses
Vu Van Tien, CEO of Geleximco Group, said that the credit package for social housing values at 30,000 billion, loans for agriculture must be greater than several times because 70% of Vietnamese engaging in the secotor. He also proposed that the Government's cash loan package should be deployed in large-scale agriculture.
To succeed in agriculture, businesses need sufficient production land and capital, he said, calling for support policies in the field.
According to the Ministry of Agriculture and Rural Development, about 4,000 enterprises out of the total 600,000 Vietnamese firms are investing in agriculture. 
The interest of big investors in agriculture is hoped to open up a new chapter for the sector’s development, but land and capital are still major obstacles.

Photo for illustration
Photo for illustration

At the recent conference on building an agricultural industry, Prime Minister Nguyen Xuan Phuc has set aside a credit package of 50-60 trillion VND (2.2-2.6 billion USD) to encourage local farmers and enterprises to develop hi-tech agriculture.
However, according to the Huy Long An Company in Long An Province, one of the biggest difficulties faced by the Vietnamese farmer is mortgage. They are unable to mortgage their produce, factories and farms as collateral.
The leader of the Huy Long An Company said that according to the regulation, the amount of money they can borrow is a fraction of real demand.
In terms of the 50 trillion VND credit package for agriculture, the State Bank of Vietnam must ‘open its arms’ to enterprises and help them with easier access to larger loans, according to the company.
Translated by Thu Minh
Source: Tram
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