For many years, the loan groups have been considered as “extended arms” to open up credit sources for the agricultural, rural areas, and farmers of the branches of the Bank for Agriculture and Rural Development (Agribank). This model helps Agribank branches to transfer credit capital quickly, accurately, effectively, and safely to a large number of people in the area.

Agribank Nam Thanh Hoa credit staff checks the loan usage situation through the loan group in Nhu Thanh district.

With the advantage of being close to and understanding the people, the loan groups of the Women's Union and Farmers' Association at all levels have helped people, especially in rural areas, to have closer access to bank loan services. Through the grassroots loan group model, bank capital has reached the right address, helping many borrowers have the opportunity to escape poverty and become rich. Agribank Trieu Son is one of the branches that effectively implemented the loan model through loan groups. By the end of October 2024, in Trieu Son district, there were 263 loan groups through the Women's Union and Farmers' Association channels in 100% of communes and towns in the district. The groups have received credit guarantees for members to borrow capital with a total outstanding debt of more than 800 billion VND with nearly 7,000 customers with outstanding debt. Agribank's capital loans through loan groups have quickly contributed to helping households, farms and ranches have more resources to develop stably and expand production scale, increase competitiveness in the market, create more jobs and income for local workers.

As one of the HND members who has access to loans from Agribank through the loan group, Mr. Le Dang Quyen, Dong Thanh village, Hop Ly commune (Trieu Son) was approved by the commune HND to borrow 200 million VND from the bank to invest in expanding the ornamental plant and pig farming model. Mr. Quyen excitedly said: “My family currently has more than 4,000m2 of ornamental plant growing, raising 12 sows and more than 30 pigs. Each year, the farm's revenue reaches more than 1 billion VND. The loan group always creates favorable conditions and guides the family through procedures to ensure convenience and speed, usually it only takes 1-2 days for my family to receive the loan disbursement.”

The loan group has truly become a bridge between Agribank and customers, contributing to promoting the transfer of preferential capital from the bank to customers quickly, promptly and most effectively. By early October 2024, Agribank branches in the province had coordinated with the Farmers' Association and the Women's Union to manage and organize the implementation of lending through loan groups strongly with 1,238 loan groups lending to nearly 40,000 members with outstanding loans of more than VND 5,000 billion. From actual operations, the loan group model has always been highly appreciated for its effectiveness thanks to transferring capital to farmers in the most convenient and fastest way, using loan capital and paying debts and interest on time, avoiding capital appropriation, loan arrears, and at the same time avoiding negative aspects or limiting "black credit" in rural areas. The loan group is also a place for farmers to place their trust, share experiences in production, business, and more effective investment... Thereby, households in the group link together to help each other in production, use capital effectively to increase income, create an increasingly close-knit community, and create people's trust in the credit policies and guidelines of the Party and the State. Currently, Agribank branches are directing their branches and transaction offices to closely follow the goals and tasks of local economic development, investigate and grasp the capital needs of economic sectors for lending; prioritize capital investment in the agricultural and rural sectors.

Article and photos: Khanh Phuong