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Bắc Ninh youths struggle to access loans

Update: January, 12/2017 - 17:00
A rabbit farm belonging to Nguyễn Ngọc Cảnh, from Phú Hòa Commune in Lương Tài District, Bắc Ninh Province. – VNA/VNS Photo Diệp Trương
Viet Nam News

BẮC NINH — The national fund of employment assistance from the Hồ Chí Minh Communist Youth Union has helped youths from northern Bắc Ninh Province launch businesses. However, a lot of local youngsters still find it difficult to access the fund.

The total amount of funds mobilised for the province is relatively high compared with other neighbouring localities. The fund’s value has reached some VNĐ3.8 billion (US$168,900), focusing on 25 economic projects initiated by local youths. It has also resulted in jobs being offered to 121 young employees.

But many youngsters barely meet borrowing conditions and face difficult procedures, the online Vietnamplus reported.

The national fund of employment assistance allows each youth to borrow at the most VNĐ30 million ($1,300). This supply is only enough for building breeding facilities and buying stocks. To borrow more than VNĐ50 million ($2,200), the borrowers have to prove the efficiency of their business model, own a business licence, farming certificate and have assets to mortgage. Limited capital prevents young business freshmen from mortgaging.

To expand a New Zealand rabbit farm from 100 pairs of rabbits to 700 pairs, Nguyễn Ngọc Cảnh, from Phú Hòa Commune in Lương Tài District needs capital amounting to VNĐ300 million ($13,000).

He tried to apply for assistance from the fund but failed to borrow money because he lacked the required documents.

“It is very difficult for youth in the rural areas to present plans, schedules and prove efficiency of economic development projects. Even when we can do it, it takes several months for the project to be approved. By then the business opportunity has passed. The loan rate is only dozens of millions of đồng, too little compared with our real demand,” he said.

Prolonged document assessment and low value of mortgage also prevents Nguyễn Đạt Phương in An Thịnh Commune, Lương Tài District, from borrowing money. The young man who planned to expand his goat farm is no longer interested in the loan.

“To receive a loan, it takes me more than one month to complete procedures. I have to mortgage the land use right certificate of my family.”

“If I meet all the requirements, I can borrow some VNĐ100 million ($4,300). Meanwhile, with similar mortgages, I can borrow larger loans from banks with simpler and quicker procedures,” he said.

According to Phạm Minh Khôi, deputy secretary of Lương Tài District’s Youth Union, until July last year, nearly VNĐ800 million ($34,400) was lent to the district’s youngsters.

“This number remains humble compared with the economic development campaign across the district,” Khôi said.

In a family, if parents borrow loans from associations, such as farmers’ association and women’s association, their offspring are not allowed to borrow. The only solution is to separate family members into different households. That’s the reason why many youngsters in Lương Tài District who have feasible business ideas are unable to borrow loans from the youth assistance fund.

Nguyễn Đức Sâm, deputy secretary of Bắc Ninh Province’s Youth Union, said the youth’s business models in the province have improved recently, with outstanding models in agriculture, industry and services. However, majority of the projects are small scale.

“Besides difficult requirements to access the loan, subjective reasons in selecting business fields are to blame,” he said.

The turbulent market may affect business development and effectiveness of the fund. Many potential projects end up losing money because they fail to apply advanced science and technology, he said.

He said the provincial youth union has acted as a link between enterprises, banks, provincial associations and youths who want to borrow loans, learn techniques and gain experience.

The union also holds training sessions and exchange programmes to expand the network and consult youths on a new style co-operative model. He said the provincial youth union would propose the establishment a startup fund to support new business and production initiatives.

In addition to capital assistance, the fund will help local youths become more confident in coming up with new ideas and implementing them. The capital source will be returned and rotated to support other youths with new initiatives. — VNS

 

 

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