Agribank signs agreements to provide loans to agricultural businesses in HCM City on October 17. — VNS Photo

HCM CITY — Bank credit has significantly contributed to agricultural and rural development in HCM City, Nguyễn Đức Lệnh, deputy director of the State Bank of Vietnam’s HCM City office, told a conference on Thursday.

Speaking at the conference held to discuss linking up banks and agricultural enterprises, cooperatives and business households, Lệnh said though agriculture accounts for less than 1 per cent of the city's economy, agricultural lands account for over 50 per cent of its land area.

He noted that in its five suburban districts, a tenth of the 500,000 households engage in agriculture, making agricultural and rural development crucial for ensuring social welfare and environmental protection.

In this process, bank credit plays a vital role in meeting the capital needs for agricultural production and rural development, new-style rural construction and agricultural restructuring in line with the city's direction of developing high-tech, clean and urban agriculture, he said.

In addition to general policies supporting businesses, the Government also has specific mechanisms for the agricultural and rural sector like Decree 55 on credit policies for its development and lending programmes for developing new-style rural areas, high-tech agriculture and forestry and fisheries at preferential interest rates and with flexible terms, he said.

Credit injected into the agriculture and rural sector under the decree is worth VNĐ345.6 trillion (US$13.8 billion), or 8 per cent of total outstanding loans in the city, an increase of 2 per cent so far this year and 14.5 per cent up year-on-year, he said.

Referring to lending for forestry and fisheries, he said banks have disbursed VNĐ3.04 trillion this year with interest rate 1.5-2 per cent lower than market rates.

He said in the last quarter of each year, there is a significant rise in capital demand, and so the SBV, the city’s Department of Agriculture and Rural Development and the Cooperative Alliance organise the conference to enable the agricultural sector to get access to bank loans.

According to the SBV’s HCM City office, Agribank has lent VNĐ993.4 billion for forestry and fisheries, high-tech and clean agriculture and the OCOP programme.

At the conference Agribank signed agreements with 20 customers to provide loans worth a total of VNĐ70 billion.

Lâm Ngọc Tuấn, director of the Tuấn Ngọc Agricultural Cooperative in Thủ Đức City, which grows vegetables and fruits, said the preferential loans meet his cooperative’s funding need. He also expected to get more loans to accelerate automation in farming.

This year, 17 banks in the city had registered to participate in the banking-business connection programme and provide preferential loans worth VNĐ509.8 trillion to various sectors, and have already lent over VNĐ490 trillion to 153,151 enterprises, cooperatives and household businesses. — VNS