Member for

4 years
Submitted by ctv_en_6 on Mon, 09/14/2009 - 13:04
More than four months after implementing the Prime Minister’s Decision No 497 to provide farmers with subsidised interest rates on loans to help them purchase equipment and materials for agricultural production, the rate of outstanding debts for farmers is very low.

The Deputy Minister of Industry and Trade, Bui Xuan Khu says that many provinces have carried this out effectively but they lack money while others have failed to disburse anything due to poor management skills.

According to official statistics from the State Bank of Vietnam (SBV), by July 31, 2009, the outstanding debt with subsidised interest rates has reached more than VND303,364 billion while commercial banks reported that by August 27, 2009, the figure was estimated at VND 818,72 billion.

Of the total, outstanding debts for farmers to purchase machinery and equipment for agricultural production and construction materials account for 80 percent and loans with subsidised interest rates for them to build houses in rural areas account for 18 percent.

Around 95 percent of borrowers are households, individuals and enterprises while only 0.5 percent are cooperatives. Regarding the shortage of loans, Deputy PM Khu cites central Ha Tinh province as a case in point.

By the end of August, 2009, Ha Tinh had provided VND90 billion in loans for farmers, accounting for 1/10 of the country’s total outstanding debt, but the country still lacks enough capital to lend to farmers.

Currently, thousands of households in Ha Tinh find it difficult to access bank loans because the banks fail to ensure sufficient supplies of capital, Khu says.

Farmers are meeting with many difficulties when trying to access low interest loans because they must have a business plan and a current value added tax (VAT) statement.

To get invoices, people buying agricultural and building materials must pay between 5-10 percent in VAT while the level of interest rate assistance is only 4 percent. This doesn’t encourage people to buy these kinds of products, confirms the Ministry of Industry and Trade.

In particular, according to Le Khac Lap, deputy head of the Economu Unit of the Vietnam Farmers’ Association, among the 36 provinces that sent a report to the Association, only 29 carried out the loan project for farmers, while 7 others didn’t.

Proposal to lengthen loans by 6 months

Relating to the lack of available capital to assist farmers, a representative from the SBV confirms that no province has said that it is short of sources of capital for loans.

Nguyen Ngoc Anh, deputy head of the finance and banking department of the Ministry of Finance (MoF) says that there is no lack of capital and that all banks don’t refuse loans if the borrower has the correct documentation. In case there is a lack of sources of capital to lend farmers, the SBV and the MoF will come up with a solution, says Mr. Anh.

Due to the slow implementation of Decision No 497, people find it difficult to access capital. Therefore, representatives of the ministries and departments have asked the Prime Minister to consider supplementing the list of products needed for agricultural production and extending loans by 6 months.

Add new comment

Đăng ẩn