SBV to issue regulations on $4.4b preferential credit package in April

The State Bank of Viet Nam (SBV) will issue regulations on directing and guiding commercial banks to implement a VND100 trillion (US$4.4 billion) credit package with preferential interest rates for high-tech agriculture projects.

The regulations will be issued in April.

According to the SBV, interest rates of the loans will be some 0.5-1.5 per cent per year lower than the current average lending rates.

Currently, lending interest rate for short-term loans averages at 6-9 per cent per year and 9-11 per cent for medium- and long-term loans.

Following the Prime Minister’s instruction on supporting high-tech agriculture development late last year, SBV has, so far, instructed the banks to apply preferential loans to high-tech and clean agricultural projects.

SBV deputy governor Dao Minh Tu said commercial banks are very interested in high-tech agriculture. They have so far positively responded and are pledging to set aside some VND100 trillion loans for high-tech agriculture at preferential rates, depending on the financial status of each bank.

According to SBV’s statistics, the country’s total outstanding loans last year rose 14.93 per cent against the previous year to more than VND5.35 quadrillion, of which agriculture, forestry and fishery industries reported a rise of some 16 per cent.

Late last year, the Government also pledged to offer preferential policies on land, financing and technology to farmers and localities engaged in high-tech agriculture. Prime Minister Nguyen Xuan Phuc said the five largest commercial banks “must create the best conditions to serve farmers, organisations and localities wanting to develop high-tech agriculture.”

In Việt Nam, 70 per cent of the population works as farmers, but agricultural production contributes only 20 per cent to GDP. In developed nations, only 2-4 per cent of the population work as farmers, but they contribute up to 40 per cent of GDP.

Only 4,000 enterprises out of 600,000 companies in the country invest in agriculture.

Source VNA