Commercial credit in rural areas

Commercial banks in the city are channeling capital into the rural economy to capitalize on its potential and boost economic development.

The Da Nang City Farmers' Association, in coordination with credit institutions, has injected capital into the rural economy to help people produce and do business effectively. Photo: QUANG VIET

Investment efficiency

To facilitate access to preferential loans for investment in production and business for its members, the City Farmers' Association, in coordination with two commercial banks: Vietnam Agricultural and Rural Development Bank ( Agribank ) and Loc Phat Vietnam Commercial Joint Stock Bank (LPBank), provides unsecured loans to its members with a maximum amount of 100 million VND through loan groups. Thanks to these loans, many farming households have invested effectively in production and business.

In early 2024, Mr. Nguyen Thanh Vu borrowed 50 million VND from LPBank 's Quang Nam branch at an interest rate of 7% per year to partner with farmers in investing in the production and business of reishi mushrooms and green lim mushrooms in Thanh Long village (Nui Thanh commune).

To enhance the value of his products, Mr. Vu processes them into various products such as reishi mushroom tea bags, whole reishi mushrooms, vacuum-packed sliced ​​reishi mushrooms, reishi mushroom wine, reishi mushroom powder, etc. These products are popular in the market, bringing Mr. Vu a considerable income and ensuring a stable income for the farmers in his cooperative.

“Rural areas have great potential for economic development, so I boldly borrowed capital to produce and do business, creating jobs for farmers. Mushroom products are highly competitive in the market, so I accumulated more capital to invest in new technologies to improve production efficiency and enhance product quality,” Mr. Vu said.

In October 2024, Mr. Nguyen Thanh Vu borrowed an additional 100 million VND from LPBank's Quang Nam branch, along with other capital sources, to invest in the Tam Phuc Traditional Medicine Clinic (Nam Son village, Nui Thanh commune) to carry out activities such as examinations, diagnosis, dispensing medicine, acupuncture, cupping, bloodletting, musculoskeletal rehabilitation, and physical therapy.

Mr. Vu said that he opened the clinic to provide traditional medicine services to people in the communes of Nui Thanh, Tam Anh, Tam Xuan, Tam My, Tam Hai, and Duc Phu; for patients in difficult circumstances, he has provided services free of charge.

“The Tam Phuc Traditional Medicine Clinic has been operating for over a year and is a destination for patients who want to receive treatment using traditional medicine, both for a fee and for free. We generate income and help people achieve stable health,” said Mr. Vu.

According to Mr. Nguyen Van Nhat Hieu, Director of LPBank's Quang Nam branch, the outstanding loan balance to rural areas as of October 31st was 41 billion VND with 800 customers still having outstanding loans in 161 loan groups.

“Lending to agriculture and rural areas is LPBank’s orientation. We create conditions for people to easily access loan capital. With the untapped potential in the agricultural and rural sectors, we expect people to prosper on their homeland,” Mr. Hieu said.

Mr. Nguyen Thanh Vu cares for patients using traditional medicine at Tam Phuc Traditional Medicine Clinic (Nam Son village, Nui Thanh commune). Photo: QUANG VIET

Support for farmers affected by storms and floods.

According to Mr. Nguyen Ut, Vice Chairman of the City Farmers' Association, the total outstanding loan balance for agriculture and rural areas of Agribank in Da Nang currently exceeds 470 billion VND, with 4,167 households still having outstanding loans.

Loans from Agribank and LPBank have unlocked the strengths of rural areas, extensively developed the agricultural economy, created jobs, stabilized incomes for rural people, contributed to building new rural areas, and ensured social security.

“Commercial banks have created a thriving agricultural and rural credit ecosystem, transforming the face of rural areas for the better. However, successive natural disasters, including floods and storms, have caused significant damage to farmers. We hope that commercial banks will continue to support farmers, implementing policies to freeze debts, extend repayment periods, and reduce interest rates on loans,” Mr. Ut said.

Mr. Nguyen Van Hoai Bao, Vice Chairman of the Vietnam Fatherland Front Committee of Dien Ban Tay commune and Chairman of the Farmers' Association of the commune, acknowledged that farmers in the area suffered enormous losses in the recent floods. The commune hopes that commercial banks will provide loans to help farmers recover some of their losses.

According to Mr. Pham Trong, Deputy Director of the State Bank of Vietnam, Region 9, the State Bank of Vietnam has just issued a document requesting credit institutions to implement comprehensive measures to support people and businesses affected by storms and floods.

Commercial banks are reviewing and assessing the production and business activities and debt repayment capacity of borrowers affected by storms and floods in order to promptly apply support measures and alleviate difficulties for customers.

The relief efforts include restructuring loan repayment terms, waiving or reducing interest and fees for affected customers in accordance with current regulations; and developing and implementing credit programs and packages with interest rates lower than normal lending rates to restore production and business.

The State Bank of Vietnam has requested credit institutions to reduce lending interest rates by 0.5%-2% per year for 3 to 6 months for existing loans of customers affected by storms and floods.

"The State Bank of Vietnam, Region 9, has requested credit institutions to coordinate with relevant departments and agencies to advise the Da Nang City People's Committee on implementing solutions to support and alleviate difficulties for people affected by storms and floods," said Mr. Pham Trong.

Source: https://baodanang.vn/tin-dung-thuong-mai-vao-nong-thon-3309494.html