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Deploying Preferential Loans for Cooperatives

Currently, many cooperatives wish to access concessional loans to meet capital needs for production, but still not easy to access these loans. Many banks in the province are implementing solutions on credit activities, as well as reviewing, evaluating and creating favorable conditions for businesses and cooperatives to access capital with appropriate lending interest rates, in order to solve difficulties in the credit relationship between banks and customers, including cooperatives.


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Model of mango production in the Fruit Tree Service Cooperative in Sabi Hill (Xuan Loc District).(Photo: Nam Vu)

 

Additional support needs

 

In fact, in order to access concessional loans, cooperatives need to meet the evaluation criteria of banks on business strategy, production technology, production capacity, standards towards clean production, and so on.

 

Similarly, Mr. Tran Quang Trung, Director of Ta Lai Agricultural Trade and Service Co-operative (Ta Lai Commune, Tan Phu District), said that the cooperative was now selected to participate in the local OCOP program. The cooperative aims at modern production in the direction of VietGAP, so it also wants to access preferential loans to develop the market, bringing the main product of the cooperative - which is green skin pomelo - to large supermarket chains.

 

Representatives of a livestock cooperative in Xuan Loc district said that banks should pay more attention to assessing the effectiveness of business plans to have more appropriate loans in the direction of unsecured loans. If possible, banks need to accompany and reduce the interest rates of cooperatives in the context of complicated animal diseases, such as the recent African swine fever outbreak.

 

The provincial Cooperative Development Fund was established in 2008 to create a low-interest loan, which helps lenders of cooperatives, cooperatives and members of collective economic organizations borrow to develop production. By the end of 2019, the fund's loan balance reached over VND 27.4 billion.

 

In particular, the main supporting fields are agricultural production and handicraft export. Objects and priority projects are cooperatives selected to build advanced models, typical or VietGAP production projects, investors of large field projects or participants in large field projects; cooperatives solve many jobs associated with the orientation of local economic development planning, etc.

 

Mr. Tran Quoc Huy, Deputy Director of the Provincial Cooperative Development Fund (under the Union of Cooperatives of the province), said the current lending interest rate is about 7.2% per year for individuals (members of cooperatives). For legal entities, cooperatives operating in the agricultural sector can borrow at an interest rate of 6% per year, while in other areas the interest rate is 6.6% per year. In particular, the cooperative must have 100% loan guarantee assets. In case feasible plans and projects for borrowing capital, with contracts on consumption of products and services, are partially unsettled.

 

Continuing to expand preferential credit programs

 

According to the Bank of Agriculture and Rural Development (AGRIBANK) - Dong Nai branch, VND lending interest rates to encourage the development of high-tech, clean agriculture... applied by the bank have many incentives. Specifically, for customers who apply high technology, clean agriculture in one of 3 stages (supply of inputs or production or consumption), the bank will reduce 0.5% per year compared to the lending interest rate for agriculture and rural areas as prescribed. Similarly, for customers who implement “greening” 2-3 above stages will be reduced interest rates from 1-1.5% per year compared with lending interest rate for agriculture and rural areas as regulated.

 

Mr. Pham Quoc Bao, Deputy Director of the State Bank of Vietnam - Dong Nai branch, said that the cooperative is now one of the beneficiaries of loans with many incentive and support policies, especially cooperatives in the field of agriculture - rural areas, clean production, export of goods and agricultural products,...

 

In the coming time, the State Bank of Vietnam in Dong Nai branch will continue to study and implement the program of connecting banks - enterprises and cooperatives in order to solve difficulties and problems of enterprises and cooperatives in banking credit relations; At the same time, strengthening the direction and administration of credit institutions in the province with active, flexible credit policies, simplifying loan procedures in accordance with current regulations…

 

According to Mr. Tran Quoc Huy, Deputy Director of the Provincial Cooperative Development Fund (belonging to the Provincial Cooperative Union), the Fund has proposed to the Ministry of Finance and the provincial People's Committee on the plan to renovate the operation model of the fund according to the model. one-member limited liability companies in order to expand the lending subjects, ensuring the efficiency of the Fund. Accordingly, the advantages of this model are expected to operate independently in the right direction, suitable to small capital (minimum charter capital of VND 20 billion).  In addition, there is a basis for the provincial state budget to provide initial or additional capital suitable to the characteristics of each province and city to make money for the development of this model.

 

By Nam Vu

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