The commune's association consists 61 households, raising a total of 270,000 chickens, reported Tien Phong (Vanguard) newspaper.
Farmers face difficulties in borrowing money from banks to develop agricultural production in Hanoi. Photo: danviet.vn
It needs VND 17 billion (USD 748,000) to maintain their breeding activities, he said.
This meant each household was required to contribute about VND 300 million (USD 13,200).
However, most of them could borrow only VND 100 million (USD 4,400) from banks because to borrow more, banks required farmers to use their land-use right certificate as collateral, he said.
Most households rent land for breeding farms, so they have no land-use right certificates.
Ngo Thanh Tung, head of a group of animal breeders in Dong Anh district’s Viet Hung commune in Hanoi said the group is raising more than 50 sows and hundreds of pigs.
The group provides jobs for more than 20 local laborers with regular income of VND 3-5 million (USD 132-220) each month, he said.
Yet he and other breeders could only access 12 month loans from the State Bank of Vietnam (SBV). The short-term loans affected the breeders’ mindsets as they had to pay their loans back quickly, he said.
Thanh said he hoped the Government would help farmers could borrow middle and long-term loans in the future.
In June 2015, the Government issued Decree 55/NĐ-CP, aiming to create favorable conditions for farmers to borrow money with preferential treatment. Under the decree, farmers can get a loan from VND 50 million – 3 billion (USD 2,200 - 1.3 million) but were required to give banks their land-use right certificates before receiving money.
A representative from the SBV admitted to shortcomings in providing loans for farmers.
Nguyen Tien Dong, head of the SVB’s Credit Department said he knew many farmers who failed to borrow money due to the need to provide land-use right certificates as collateral.
He said the SVB will ask the Government to amend regulations on mortgages to fix the shortcomings.
Economist Can Van Luc said lending money without collateral should be carefully considered because banks would risks borrowers failing to pay back their loans.
It is easy to see why banks had to carefully calculate the feasibility of a project before lending money, he said.
Luc said authorized agencies are advised to provide training for farmers so that they use the money they borrowed from banks effectively. When they present a feasible plan, they can borrow money from banks easier.
Source: VNA