On December 30, 2023, First Deputy Governor Dao Minh Tu of the State Bank of Vietnam (SBV) attended the Prime Minister’s 2023 Dialogue with Farmers, with the theme of “Farmers are the key actors and the center in the development of agriculture, rural economy, and green, sustainable new rural areas”.
Sharing at the Dialogue, Mr. Nguyen Hong Quyet, a farmer from Binh Duong province, said that in Decree No. 116/2018/ND-CP amending Decree No.55/2015/ND-CP on credit policy for agriculture and rural development, customers who are individuals or households investing in perennial industrial crops or fruit trees may borrow up to VND 200 million per household. However, in fact, many farming households are now farming on large areas of tens to hundreds of hectares, and therefore, the capital they need can be in billions. Therefore, Mr. Quyet suggested that it is necessary to develop policies and solutions so that farmers can use future assets (products to be harvested in the future) as collaterals for more credit in support of their large scale production.
Answering the question, Deputy Governor Dao Minh Tu shared that, over the past time, the Party, the State and the Government have implemented a lot of policies and mechanisms to support the agriculture and rural development sector. For the banking sector’s side, there are currently 18 effective documents, meaning 18 policies that directly support the agriculture and rural development sector. In addition, there are also specific policies and mechanisms for different regions, such as the policies for rice, shrimp and fish development in the Mekong Delta; or for coffee and industrial crops in the Central Highlands; or other policies for the Northern mountainous areas and the Red River Delta; or for the offshore fishing fleet development; etc. "The currently effective 18 policies for the agriculture rural development sector and the farmers have been implemented with a lot of positive impacts", the SBV Deputy Governor affirmed.
Regarding the credit access, according to the SBV Deputy Governor, the agriculture and rural development sector is always a priority. There are no restrictions; on the contrary, there are even mechanisms to encourage commercial banks to prioritize investment in this sector. Therefore, the current total loan outstanding of the economy is about VND 13,400 trillion, of which the agriculture and rural sector accounts for about a quarter of the total loan outstanding of the whole economy. The credit growth rate for the agriculture and rural sector is frequently maintained at the highest level among all sectors, estimated at about 10-12% p.a.
The panelists in the Dialogue
The SBV Deputy Governor commented that the recommendation by Mr. Quyet was appropriate, and the SBV would coordinate with the Ministry of Agriculture and Rural Development to propose to the Prime Minister for the expansion of the targets populations as stated in Decree 55 to be in line with the actual conditions, and in alignment with the Party’s and the Government's orientations for the agriculture and rural development.
Regarding the lending interest rates, it must be done according to the rules of the market economy. The commercial banks mobilize capital for their lending operations, and they can decide the appropriate lending interest rates. However, the agriculture and rural development sector is one of the five priority sectors with the preferential ceiling interest rate of 4% p.a.
Regarding the collaterals, the SBV Deputy Governor asserted that the current policies and mechanisms stipulate clearly that not all loans are required to have collaterals, but some can be unsecured loans, or guaranteed by assets formed in the future, etc. However, the forms of securing a loan must be decided by the commercial bank on the basis of the agreement with their customers.
Le Hang