Working together to develop agricultural and forestry raw material areas.

According to information from Agribank, over the past two years, the implementation of cooperation agreements between this credit institution and the Ministry of Agriculture and Rural Development (MARD) in providing credit support for the "Pilot Project for Building Standardized Agricultural and Forestry Raw Material Areas in the period 2022-2025" has achieved many positive results.

Accordingly, with the proactive involvement of Agribank branches in the 13 provinces and cities implementing the aforementioned pilot project, the bank has so far reached hundreds of customers including businesses, cooperatives, and farmers participating in the project. Outstanding loans to large enterprises, such as Tan Long Group, Loc Troi Group, Dong Giao JSC, Kim Nhung Company, etc., have reached approximately VND 482.7 billion.

Agribank's first-tier branches in the Mekong Delta region have approached customers to open payment accounts and use banking services. From there, the bank has provided loans to cooperatives with outstanding balances of approximately 6 billion VND. In addition, according to the customer list provided by the Department of Cooperative Economics (Ministry of Agriculture and Rural Development), Agribank has approached, connected with, and provided loans to more than 30 cooperatives and farmer households with outstanding balances of approximately 14 billion VND.

In Tien Giang and An Giang provinces, cooperatives participating in the project to develop rice and fruit raw material areas, such as Binh Thanh Cooperative, Vinh Kim Cooperative, Hung Thinh Phat Cooperative, Tan Binh Cooperative, Green Vina, etc., have all accessed loan capital with outstanding loans ranging from 2 to 3 billion VND.

According to Agribank's leadership, the cooperation in developing the pilot project to build five agricultural raw material zones not only brings positive results from credit financing but also helps the bank effectively implement many accompanying financial products and services, especially providing multi-channel payment services and financing financial management solutions for the closed-loop agricultural production-consumption chain.

Many agricultural raw material producing regions have access to preferential loan capital to develop production, processing, and export.

Accessing thousands of large businesses, corporations, and cooperatives participating in the raw material area project has also helped Agribank branches significantly develop their customer base across various services and products such as opening payment accounts and savings accounts. For example, among the 14 large businesses participating in this project, 7 customers have opened payment accounts and registered to use deposit services with a total deposit balance of approximately 250 billion VND. Businesses such as Tan Long, Vinh Hiep, Loc Troi, Dong Giao, Kim Nhung, Chanh Thu, etc., have all become large corporate customers of the bank with deposit balances ranging from 10 billion to several hundred billion VND.

According to a report by the Ministry of Agriculture and Rural Development, as of the end of July 2024, the pilot project to build five agricultural and forestry raw material zones meeting basic standards had completed 62.5% of the infrastructure construction work. Localities participating in the development of these zones have also established 81 supply chains, with the area of ​​agricultural raw material zones linked to consumption by key enterprises reaching nearly 104,000 hectares.

According to a representative from the Department of Cooperative Economics (Ministry of Agriculture and Rural Development), the total funding required for this project from 2022-2025 is approximately 2,470 billion VND. This includes over 942 billion VND from the central government budget, 410 billion VND from local government budgets, 572.2 billion VND in matching funds from businesses and cooperatives, and over 552.3 billion VND in credit loans.

To date, the total budget allocated by the central government, local authorities, and businesses/cooperatives for raw material area projects has reached approximately 564.2 billion VND. Meanwhile, Agribank branches have provided loans with outstanding balances of nearly 500 billion VND. This shows that the bank has been very attentive and proactive in financing the raw material areas of the project.

Mr. Hoang Minh Ngoc, Deputy General Director of Agribank, said that the project is currently entering phase 2 with components requiring significant capital for completion and expansion. The bank is committed to continuing to support the implementation of preferential credit programs and expanding financial assistance to help localities complete the project.

However, to ensure smooth and efficient cash flow connectivity within regional raw material supply chains, Agribank proposes close cooperation between the Ministry of Agriculture and Rural Development and local authorities to establish unified lending regulations. This would require all entities within the supply chain to conduct monetary transactions related to that chain using accounts opened at the same credit institution. This would help control cash flow, ensure funds are used for their intended purpose, and increase the effectiveness of credit financing.

From the bank's perspective, in addition to the committed credit capital of over VND 552.3 billion to be disbursed under the cooperation with the Ministry of Agriculture and Rural Development, Agribank will also combine financing for raw material areas with capital from other preferential credit programs, such as: a short-term personal loan program with a 2% interest rate reduction (worth VND 50,000 billion); a VND 2,000 billion loan program for OCOP products; a VND 50,000 billion loan program for SMEs (with a 1.5% interest rate reduction); and other preferential credit packages with a 2% interest rate reduction, such as: VND 20,000 billion for large enterprises; VND 15,000 billion for preferential loans to finance investment projects… Therefore, there is no shortage of preferential loan capital to serve the needs of developing and expanding agricultural raw material areas in the future, and there are many options to access.