Farmers get more credit

A decree intended to improve the flow of credit to farmers became effective yesterday.

Decree 41/2010/ND-CP issued in April makes money more widely available and allows more loans without collateral.

Its introduction coincides with a meeting in Ha Noi yesterday to review Decision 67/1999/QT-TTg of March 1999 that increased credit for agriculture from VND34 trillion (US$1.79 billion) in 1998 to VND293 trillion ($15.42 billion) in 2009.

The decision also stipulated that credit growth was to remain at a yearly 21.78 per cent so as to maintain average yearly agro-fisheries and forestry growth at 3.7 per cent, in accordance with a State Bank of Viet Nam’s suggestion.

The purpose of the decision was to make it easier for farmers to access credit; build a competitive agricultural industry and improve rural life.

“Decision 67 allowed farmers and enterprises to borrow VND10-15 million ($526-790) but they were often told that banks did not mobilise enough capital,” northern Thai Nguyen Province’s People’s Committee deputy chairman Dang Viet Thuan told the meeting.

“Will the new decision allow borrowers to raise VND50-500 million ($2,630-26,315) loans?” he asked.

Viet Nam Farmers’ Association chairman Nguyen Quoc Cuong suggested that co-operative regulations and administrative procedures should be more thoroughly followed.

Terms of borrowing should not be universal because farming conditions differed, he said.

The chairman told the meeting that the credit programme had helped millions of farmers apply for loans and his association had more than 230 credit teams.

The programme had also ensured food security and helped eliminate hunger and reduce poverty.

Problems

But many delegates, who included representatives of the Agriculture and Rural Development Ministry; central and State-owned commercial banks and provincial people’s committees, agreed that the programme had struck numerous problems.

The application procedures were too complex; the terms for borrowing were inappropriate and co-operation between those responsible for lending the money lacked cohesion.

The short comings had limited the effectiveness of agricultural credit policy.

They also suggested that a development plan should be made for each farming area before any credit was granted so as to ensure the capital would be used effectively.

Agriculture and Rural Development Minister Cao Duc Phat suggested the banks should allow credit for agriculture to grow at a yearly 24 per cent so that the sector could develop by 4 per cent a year, in accordance with Viet Nam Communist Party Central Committee’s Resolution 7.

State Bank of Viet Nam Governor Nguyen Van Giau said the central bank was working with Agribank to draft proposals for better agricultural credit programmes. — VNS

Tags: Vietnam agriculture