On November 7, 2024 in Dong Thap, the State Bank of Vietnam held a conference to deploy the preferential credit program to implement the project of 1 million hectares of high-quality and low-emission rice in the Mekong Delta. Permanent Deputy Governor of the State Bank of Vietnam Dao Minh Tu, Deputy Minister of Agriculture and Rural Development Tran Thanh Nam, Chairman of the People's Committee of Dong Thap province Pham Thien Nghia, Director of the Department of Credit for Economic Sectors of the State Bank of Vietnam Ha Thu Giang and General Director of Agribank Pham Toan Vuong chaired the conference.
Attending the Conference were leaders of the People's Committees of 12 provinces/cities in the Mekong Delta region, representatives of local departments, branches, and sectors, leaders of the Departments, the State Bank of Vietnam, branches of the State Bank of Vietnam in provinces and cities, associations, enterprises, cooperatives in the area and credit institutions. On the side of Agribank, there were Deputy General Director Phung Thi Binh, leaders of units at the Head Office, and leaders of branches in the provinces in the Mekong Delta region.
Banking sector commits to meet sufficient capital demand to implement the Project
Speaking at the opening of the Conference, Deputy Governor of the State Bank of Vietnam Dao Minh Tu emphasized that rice is one of the key agricultural export products of our country. With the goal of making Vietnam one of the pioneering countries in producing high-quality, low-emission rice, creating solid, breakthrough steps for the Vietnamese rice industry, meeting the requirements of new international trends, affirming and maintaining the position of the Vietnamese rice brand in the international market, the Prime Minister issued Decision 1490/QD-TTg dated November 27, 2023 approving the Project: "Sustainable development of one million hectares of high-quality, low-emission rice cultivation associated with green growth in the Mekong Delta by 2030".
The State Bank and the banking sector have implemented many credit solutions to support people and businesses in the Mekong Delta to develop production and business in general and high-quality rice production in particular. The State Bank of Vietnam and its local branches have organized conferences connecting banks and businesses and specialized conferences on credit for key agricultural products and rice in the Mekong Delta; at the same time, there have been many documents directing credit institutions to focus on lending, expanding credit limits, simplifying lending processes and procedures... to meet capital needs from production (fertilizer, seeds, materials...) to processing, purchasing, and consuming agricultural products and rice; thereby creating maximum favorable conditions in credit relations for households, businesses, cooperatives producing, trading, and exporting rice.
Regarding the task of the State Bank of Vietnam in the Project "Research and propose the development of a credit program to support the linkage of production, processing and consumption of high-quality and low-emission rice products in the Mekong Delta between cooperatives and enterprises; implementation period from 2025-2030", the State Bank of Vietnam has urgently coordinated with ministries, branches, People's Committees of 12 provinces and cities in the Mekong Delta and related units to develop and submit a report to the Prime Minister on the Loan Program for linkage of production, processing and consumption of high-quality and low-emission rice products in the Mekong Delta according to Decision 1490/QD-TTg. On October 11, 2024, the State Bank of Vietnam sent documents to credit institutions and State Bank branches in provinces and cities in the Mekong Delta guiding the implementation of the Program.
Accordingly, the lending program will be divided into 2 phases (based on the 2 phases of the Project implementation), in which the pilot phase from now until the end of 2025 will be conducted by Agribank as the main lending bank and the expansion phase will be from the end of the pilot until 2030.
Regarding resources and lending principles, credit institutions lend using capital mobilized by themselves; therefore, lending is carried out according to the commercial mechanism with lending conditions according to current regulations of credit institutions for customers. Regarding lending term and purpose: Meeting short, medium and long-term capital needs of all stages (production, purchasing, processing, consumption) in rice linkage. Regarding lending interest rates: Credit institutions proactively balance capital sources, reduce costs to consider applying lending interest rates at least 1%/year lower than the lending interest rate of the corresponding term currently applied to customers of the same term/same group.
Deputy Governor of the State Bank of Vietnam Dao Minh Tu affirmed that with the determination and synchronous implementation of ministries, branches, localities and credit institutions, in which the main lender of the Program in the pilot phase is the Bank for Agriculture and Rural Development of Vietnam, the implementation of the preferential credit program to implement the Project of 1 million hectares of high-quality and low-emission rice in the Mekong Delta will achieve positive results.
Agribank is the main bank providing capital to implement the Project.
By the end of October 2024, Agribank's total outstanding loans to the economy reached nearly 1.7 million billion VND, of which outstanding loans to the agricultural and rural sectors reached over 1 million billion VND, accounting for 62% of total outstanding loans. In the Mekong Delta, outstanding loans in the "Tam Nong" area accounted for 82% of the region's total outstanding loans, of which outstanding loans to the rice sector reached nearly 33 trillion VND, accounting for about 47.5% of outstanding rice loans of the entire Agribank system.
Speaking at the Conference, Agribank General Director Pham Toan Vuong said that after the Prime Minister issued Decision 1490/QD-TTg, Agribank signed a Memorandum of Understanding with the Ministry of Agriculture and Rural Development of Vietnam, committing to provide products and services to individuals, farming households, businesses, cooperatives, and cooperative groups participating in the Project.
The General Director of Agribank emphasized that Agribank is honored to be the only bank selected to pilot lending for the Project in phase 1, which will last until 2025. Immediately after the State Bank issued a document guiding the lending program, Agribank also issued an internal document guiding the implementation of the lending program for linking production, processing and consumption of high-quality and low-emission rice products in the Mekong Delta to individuals, farming households, cooperatives, cooperative unions and enterprises participating in the Project. Using the bank's own resources, Agribank will support a reduction in interest rates for customers by at least 1%/year compared to the normal lending rate.
Agribank is developing specialized credit products for each group of individual customers, farming households, cooperatives, and enterprises so that they can be implemented as soon as the People's Committees of provinces and cities and the Ministry of Agriculture and Rural Development announce the list of specialized areas, linkages, entities participating in the linkage and cost norms, technical and economic norms for production according to the standards in the Project. Initially, the minimum implementation scale is 30,000 billion VND and will continue to be supplemented during the implementation process. Loan products will be optimized in terms of interest rates, reducing procedures on the basis of managing cash flow in the linkage, thereby contributing to the successful implementation of the 1 million hectare rice project.
In addition to providing credit capital, Agribank also provides a full range of other financial services such as deposit services, domestic payments, international payments, foreign exchange, insurance, etc. Agribank is ready to serve the Project's capital sources, providing payment management services for project participants, especially infrastructure construction investment projects of the Project.
In order to effectively implement the Project and quickly put it into practice, at the Conference, Agribank proposed that the Ministry of Agriculture and Rural Development, the People's Committees of provinces and cities, and local departments, branches and sectors promptly announce the list of specialized areas, linkages, enterprises, cooperatives and cooperative groups participating in the linkage so that Agribank has a basis to access and guide loan procedures early; prioritize, support and advocate Agribank as the bank serving the Project's capital sources, including capital from the State budget and foreign loans, as well as prioritize and support Agribank branches in the area to implement and access capital sources such as financial management costs, payment sources for units participating in the Project, especially infrastructure investment and payment of carbon credits of the Project; support Agribank in introducing key enterprises to join the Project; Add specialized rice growing areas and zones according to the Project to the list of high-tech agricultural areas to enjoy preferential credit policies specifically to encourage high-tech agricultural production...
At the Conference, Agribank Deputy General Director Phung Thi Binh also guided the implementation of preferential credit capital to the subjects participating in the Project. For the subjects participating in the linkage chain in the Project, Agribank reduces interest rates by 1-2%/year to help businesses and farmers access capital more conveniently. Agribank does not limit medium and long-term loans and is ready to meet the needs of businesses participating in the Project, at the same time wishing to build a closed linkage chain, from farming households, raw material suppliers to purchasing, processing and exporting enterprises. This will help the parties reduce costs, enjoy preferential policies such as service fees and loan guarantee conditions.
Leaders of the provincial People's Committees, representatives of enterprises and cooperatives also exchanged recommendations and proposals at the Conference. Deputy Governor of the State Bank of Vietnam Dao Minh Tu and General Director of Agribank Pham Toan Vuong directly received opinions, answered and resolved problems. In the coming time, Agribank will continue to coordinate with the State Bank of Vietnam, the Ministry of Agriculture and Rural Development, People's Committees of provinces and cities, associations and related units to quickly deploy necessary tasks to serve the Loan Program for linking production, processing and consumption of high-quality, low-emission rice products in the Mekong Delta.
Agribank commits to focus maximum resources on prioritizing the implementation of the Preferential Credit Program, together with the banking industry, contributing to the successful and effective implementation of the 1 million hectares of high-quality rice project according to the Government's policy, bringing economic, social and environmental values, demonstrating Vietnam's commitment to developing green and sustainable agriculture, enhancing Vietnam's reputation and position in the world.
