World Bank finance project benefits rural regions of Vietnam

The assessment was made by donors at a workshop on completion assessment of the Third Rural Finance Project in Hanoi on July 21.

The project is reported to have generated VND9.8 trillion (US$487) million for rural areas in Vietnam, thanks to the initial finance of US$200 million from the World Bank (WB).

After five years of implementation, the project completed its first stage. By December 31, 2013, a total US$200 million funded by the WB was disbursed, thus helping to increase income for farmers and rural businesses.

According to a representative of Mekong Economics (MKE), a leading economic consulting company in the Greater Mekong sub-region, finance from the WB created a large investment of the whole society for the agriculture sector in Vietnam.

The MKE reported that 94% of end-borrowers said their incomes improved after lending.

Specifically, the project, with additional funding from local banks and people's credit institutions and contribution from end-borrowers, created total investment of up to US$487 million. Of this figure, 90% are medium and long-term investments.

It is estimated that more than 135,000 people and businesses in rural areas have access to loans. The project has generated more than 140,000 new jobs.

At the workshop, Victoria Kwakwa, WB Country Director for Vietnam, said what they saw in this project is that financial institutions contributed their own resources into this project. Simultaneously, they also managed projects and ensured that they could do a good job of developing agriculture and rural development, reducing poverty and generating profit.

Deputy PM Hoang Trung Hai appreciated the implementation of this project noting that it is a model one. He said the third finance project has done a good job noting that local relevant bodies need to strictly review ODA funding by learning from this project.

He also called on donors to continue assisting Vietnam in developing its economy, elevating poverty, and stated that the Vietnamese Government is committed to using this funding in a transparent and effective manner.

The objective of the Third Rural Finance Project for Vietnam is to increase economic benefits to rural private enterprises and households by increasing their access to finance.

The project aims at helping the Vietnamese Government to raise the economic benefits for rural private businesses and households by enhancing their access to financial resources.

The Bank for Investment and Development of Vietnam (BIDV) was assigned with managing and implementing this important phase of the project. Totally, with this loan, the WB’s funding reached US$548 million for the rural finance project.

After the end of the disbursement period, the project's funding will continue to up to 2033. It is estimated that it will help generate a total social investment of up to US$5 billion from the revolving fund managed by BIDV.