Central bank urges more support for rice farmers

CAN THO – The State Bank of Vietnam (SBV) has told commercial banks to provide continued support for the rice sector in the Mekong Delta by offering loans to rice farmers and trading firms to beef up their rice production and consumption.

Farmers harvest rice in the Mekong Delta region – PHOTO: TRUNG CHANH

Under the central bank's Document 1289, commercial banks should boost the deployment of the credit policy for agricultural and rural development in line with the Government’s decrees 55 and 116.

Besides this, the central bank asked lenders to focus on giving loans geared toward developing the connectivity model from production to consumption and to implement Decision 68 on supportive policies on the reduction of losses in agriculture.

In addition, commercial banks should order their branches in the Mekong Delta to guarantee sufficient loans for farmers, traders and producers so that they can purchase, store and export the rice grown in the 2019 winter-spring crop.

This aims to remove financial difficulties and create favorable conditions for rice-trading firms to apply for loans, including extending debt payments, offering new loans and speeding up loan disbursement.

Further, SBV requested commercial banks to offer medium- and long-term loans to support enterprises in beefing up their rice production and processing activities.

Commercial banks, apart from simplifying their lending procedures, should diversify credit products and make credit terms flexible to aid rice trading firms.

Moreover, SBV required strict enforcement of the regulation on the cap on interest rates for Vietnamese dong-denominated short-term loans for agricultural and rural development, especially for the growth of the rice industry. Based on the borrowers’ financial capability, the interest rate can be adjusted downward.

SBV governor Le Minh Hung said that as of end-December 2018, the country saw the outstanding loans for the agricultural and rural sector amount to VND1.73 quadrillion, up 21.4% year-on-year, with the Mekong Delta region accounting for 17.24% of the total, at VND298,000 billion.

Of the total outstanding loans reported at the end of January, amounting to VND1.75 quadrillion, VND300,000 billion was offered to the Mekong Delta, Hung said.

Hung added that for the rice industry, the country’s outstanding loans reached VND99 trillion in 2018, growing by VND29.8 trillion against the figure seen at end-2017, adding that the Mekong Delta made up 50% of the total VND100 trillion by end-January.