Agricultural credit: A bright outlook.

(Baonghean) - With approximately 70% of the population living in rural areas, the demand for capital to invest in agricultural production and business is enormous. For decades, branches of the Agricultural Bank throughout the province have consistently supported the people, providing capital for farmers to borrow for production and business investment, contributing to the development of the new rural landscape.

Visiting Mr. Nguyen Huy Tien's farm in Hamlet 4, Hung Tien Commune (Hung Nguyen District), one can see that the economic mindset of this farmer is second to none. To develop his family's economy, in 2004, Mr. Tien decided to start a livestock farm to provide for his three children's education. He leased 2.2 hectares of land from the district, and with his accumulated capital of 400 million VND, he borrowed an additional 150 million VND from the bank to build barns, dig a fish pond, and buy breeding stock for broiler chickens, laying hens, pigs, and snakehead fish.

Being dynamic and quick to grasp market trends, Mr. Tien's farm's products are continuously sold, never experiencing any stagnation, with a fast capital turnover and high efficiency. Currently, his family farm has 10,000 laying hens (super-laying eggs per batch), over 1,000 broiler chickens, 70 pigs, and 13,000 square meters of fish ponds. To date, the total investment in the farm exceeds 7 billion VND, serving modern industrial livestock farming, making it one of the largest farms in Hung Nguyen district. With total annual revenue from the sale of broiler chickens, eggs, pigs, and fish exceeding 4 billion VND, after deducting expenses, the net profit is 500-700 million VND per year.

Mr. Nguyen Huy Tien's chicken farm in Hung Tien commune (Hung Nguyen district).

Mr. Tien shared: "To achieve the success we have today, in addition to the family's efforts, we have always received the support and loans from the Nam Hung Branch of the Agricultural Bank of Hung Nguyen District. Currently, my family has a loan of 700 million VND from the bank. Thanks to regular loans, we have the capital to ensure a daily supply of feed for our livestock, resulting in high-quality products that are favored by the market. Currently, the farm is conducting a pilot project raising pigs for meat using biosafety methods. If the relevant authorities certify the pork as clean, I will expand production and distribution."

The family of Mr. Ho Van Hung and Mrs. Vo Thi Dan in Hamlet 1, Hung Tan Commune, also borrowed capital from the District Agricultural Bank to invest in a farm raising ducks, pigs, and fish in a pond. In 2000, Mr. Hung discussed starting a farm with his wife to improve their lives, but they had no capital. Mrs. Dan boldly borrowed money from various organizations and from the bank in small amounts to raise fish and rice. After a few farming seasons, they accumulated some capital, hired a machine to dig a pond, and continued to borrow more than 100 million VND from the Agricultural Bank to expand the scale of their farming. To date, Mr. Hung's family raises nearly 1 hectare of fish in a pond, has a flock of 700 laying ducks, and a flock of over 100 chickens. Each year, after deducting input costs, Mr. Hung's family earns a net profit of about 150 million VND from selling duck eggs and fish in the pond. Although his family had the means to pay off their livestock investment loans, Mr. Hung was not satisfied with his current situation. He continued to borrow over 200 million VND from the District Agricultural Bank to invest in a combine harvester to provide harvesting services for local farmers, charging 200,000 VND per sao (a unit of land measurement). Each harvest season, with many farmers hiring the machine, his family earns over 100 million VND from these rental services.

Mr. Nguyen Van Thuan, Director of the Nam Hung branch of the Agricultural Bank of Hung Nguyen district, said: The Nam Hung branch serves credit needs for 9 communes in the southern part of Hung Nguyen district. The people here rely on agricultural production for their livelihoods, so the demand for loans to invest in this sector is quite high. In recent years, the people have been more active in livestock production, developing household economies, and opening up additional businesses to serve the consumption needs in rural areas. To support the people's economic development, the Agricultural Bank facilitates access to capital. Credit officers are always enthusiastic in guiding people through loan procedures so that they can access capital as quickly as possible. The people in the Nam Hung area use the capital for its intended purpose, thus maximizing the effectiveness of the loan capital and fulfilling their obligations to repay principal and interest on time to the bank. By the end of April 2014, the total outstanding loan balance of the Nam Hung branch reached 160 billion VND, an increase of 11 billion VND compared to the beginning of the year. Total capital reached VND 262 billion, an increase of VND 31 billion compared to the beginning of the year; credit quality was assured, with non-performing loans accounting for only 0.27%.

Quynh Luu is a dynamic economic development area, therefore agricultural credit sources are quite diverse, ranging from cultivating food crops, short-term industrial crops, livestock and poultry farming, aquaculture, marine exploitation, processing agricultural and seafood products, shipbuilding, etc. At the Quynh Luu branch of the Agricultural Bank, loan disbursements in the first four months of 2014 reached VND 403 billion; outstanding loans as of April 30, 2014 reached VND 943 billion, an increase of VND 91 billion compared to the beginning of the year, a growth rate of 10.7%. Quynh Luu also has the highest loan growth rate in the entire provincial Agricultural Bank system, with guaranteed credit quality, and agricultural and rural loans accounting for nearly 90% of the total outstanding loans. Thousands of customers have been loyal to the Agricultural Bank for decades, thanks to the bank's credit capital which has helped them build their fortunes and stabilize their lives.

Mr. Hoang Duong, Head of the Credit Department of the Agricultural Bank of Nghe An province, said: "Recently, interest rates have been adjusted downwards, making it easier for households to manage loan repayments. Although the economy has not yet recovered and other production investment sectors are struggling to absorb loans, credit for agricultural and rural investment in the province still maintains stable loan growth."

As of early May 2014, the total outstanding loan balance of the entire branch reached VND 11,468 billion, an increase of VND 493 billion compared to the beginning of the year, a growth rate of 4.5%; with approximately 133,000 customers receiving loans. Loans to agriculture and rural areas accounted for 92% of the total outstanding loan balance. Non-performing loans accounted for only 0.61%. In April 2014 alone (after the lending interest rate was adjusted down by 1%/year), the outstanding loan balance increased by VND 204.4 billion. From the beginning of the year until now, all branches in the system, from the plains to the high mountains, have seen growth in outstanding loan balances. The unit with the highest growth rate was Quynh Luu district with an increase of VND 91 billion; Anh Son district branch increased by more than VND 44.5 billion; Dien Chau branch increased by VND 45.4 billion; Quy Hop district branch increased by VND 21.1 billion…

Text and photos:Quynh Lan