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The State Bank of Vietnam (SBV) and the Ford Foundation co-organised a seminar in Hanoi on Dec. 18, focusing on access to credit for Vietnam’s rural areas following the country’s accession to the World Trade Organisation (WTO).

The seminar aimed to gain an in-depth understanding of the reality of credit access in Vietnam’s rural areas, and orientate credit development in these areas.

The participants agreed that credit activities should play a key role in attracting sources of capital to ensure agricultural and rural development.

The SBV has formulated policies to support rural credit schemes, and help enhance the capacity of financial institutions, especially those that operate in the agricultural sector. It also called for more foreign capital to be invested in agriculture.

According to the bank, the network of credit services in rural areas has been expanded remarkably with 2,200 branches of Agribank and 998 people’s credit funds which operate through 10,000 branches and 180,000 other outlets of the Vietnam Bank for Social Policies, not to mention micro- finance programmes in 36 provinces and cities.

Total loans in the agriculture sector reached VND192 trillion by the end of 2007, a 10-fold increase from a decade ago. However, this growth is still lower than the growth rate of loans in other areas of the economy. Consequently, the restructuring of the agricultural and rural economic sector has not yet yielded satisfactory results.

Speeches at the seminar concentrated on the operations of financial institutions in rural areas, credit facilities for cooperatives, and the operations of bank branches in rural areas.

To overcome these obstacles and promote credit investment in rural areas while Vietnam consolidates its WTO membership, the participants presented a number of solutions at the seminar, such as the formulation of a policy to develop the wholesale system in credit activities, renovating preferential interest rates of loans to rural areas for agricultural purposes, and diversifying rural financial institutions.

Source: VOVNews/VNA