The attractiveness of investment capital in agriculture and rural areas.

(Baonghean)In the first six months of the year, the economy remained challenging, capital absorption was limited, and banks had excess lending capital. The available capital of the entire banking system in Nghe An was extremely abundant, not only meeting the capital needs of the economy but also providing reserves. Of the total outstanding loans of the entire system, investment credit for agriculture and rural areas accounted for nearly 35%. This is also the sector with the most promising capital absorption in the current context.

Mr. Phan Van Duong's integrated livestock farm in Hung Dao commune (Hung Nguyen district).

According to data from the State Bank of Vietnam's Nghe An branch, as of June 30, 2014, mobilized capital in the province was estimated at VND 60,311.8 billion, an increase of VND 4,207.8 billion compared to the beginning of the year. Total outstanding loans of credit institutions in the province were estimated at VND 101,895 billion, an increase of VND 5,948.7 billion compared to the beginning of the year. Of this, loans to agriculture and rural areas reached VND 35,475 billion, accounting for 34.8% of total outstanding loans, an increase of VND 2,599 billion compared to the beginning of the year. Along with policies creating favorable conditions for loans to the agricultural and rural sectors, the continuous reduction in interest rates during the first months of 2014 helped businesses and households borrow a significant amount of capital to invest in production and business, creating more material value, developing the economy in agricultural and rural areas, ensuring the supply of agricultural, forestry, and aquatic products to the market, generating income and ensuring a quick capital turnover.

Despite borrowing less than 200 million VND from the Agricultural Bank, and combining it with accumulated capital from years of farm business, Mr. Phan Van Duong's family in Hung Dao commune (Hung Nguyen district) has actively prospered from their nearly 4-hectare farm raising ducks, chickens, and fish in the area. They have also created jobs for many workers. In 2001, Mr. Duong started his farm on barren land in Hamlet 2, Hung Dao commune. With his diligent hands and mind, this farmer transformed the wasteland into a large-scale livestock farm, generating a net profit of over 1 billion VND annually. Currently, his farm includes 10,000 laying ducks, 2,000 free-range chickens, and 4 hectares of fish ponds. Furthermore, the family has 10 incubators to hatch fertilized duck eggs, producing 9,500 eggs daily. This method has increased his family's income because the market for fertilized duck eggs is expanding, from Hanoi and Hai Phong all the way to Hue, Da Nang, and Binh Dinh…

Thanks to long-standing business relationships, Mr. Duong packs and ships duck eggs daily via passenger buses and trucks, distributing them directly to distributors in various provinces. He sells nearly 30 million VND worth of duck eggs per day, with 26 million VND spent on feed for his ducks. Furthermore, he utilizes leftover duck feed to feed his chickens and duck manure to raise fish. This integrated farming method has helped his family maximize profits from their farm. Fish farming alone yields 40-50 tons of various fish per year, generating a net profit of 600-700 million VND annually. In addition to his family's workforce, he employs four permanent workers at a salary of 5 million VND per person per month. The most gratifying aspect for Mr. Duong is that his products are always in high demand; everything he produces is sold. Therefore, despite the hard work and busyness of their daily tasks, each member of his family is very happy with the results they have achieved.

Mr. Nguyen Tran Trung from Van Dien commune (Nam Dan district) boldly borrowed 4.2 billion VND from the Agricultural Bank of the district to invest in building a tunnel kiln with a capacity of 7 million bricks per year. Mr. Trung is also a man of bold ideas and actions. Following the policy of eliminating manual brick kilns, after many sleepless nights contemplating new business opportunities, he recognized the potential of the brick market and decided to invest in this sector. His efforts paid off when, in the first six months of this year, demand for bricks surged, and production couldn't keep up with customer demand. Furthermore, this tunnel kiln provides employment for nearly 50 workers, with a salary of 3.5 million VND per person per month.

There are still many successful agricultural and rural business households throughout the province who know how to use capital for the right purposes, maximizing the effectiveness of loans to genuinely enrich themselves in their homeland, contributing to ensuring social welfare in rural areas.

A new feature in agricultural and rural credit investment this year is the pilot lending program to support agricultural development through integrated models in the agricultural production chain, applying high technology. The provincial branch of the State Bank of Vietnam, in coordination with the Department of Agriculture and Rural Development, surveyed businesses in the area and advised the State Bank of Vietnam and the People's Committee of Nghe An province to approve the participation of two businesses and three commercial bank branches in the area in the pilot lending program. To date, the Industrial and Commercial Bank of Vietnam and the Foreign Trade Bank of Vietnam have committed to lending nearly 525 billion VND to the Nghe An Agricultural Materials Joint Stock Corporation to invest in high-tech rice and ginger production. This project, once implemented, will open up a new direction for production development, from the supply of materials to production and product distribution within a linked chain. This means that the output is already determined from the production stage.

Credit investment in agriculture and rural areas often carries risks due to natural disasters and diseases. However, above all, the willingness of borrowers to take risks is crucial. Simultaneously, banks should confidently trust in the investment capabilities of their customers to create more flexible lending mechanisms, enabling a wider range of customers to access new investment capital or expand production and business, thereby creating more material value for the economy and enriching their homeland. Today, along with the country's development, the rapid advancement of information technology allows all segments of the population to access science, technology, and knowledge in all aspects quickly and conveniently. This enhances the production and defense capabilities of each individual, enabling them to make more accurate calculations, focus their investments, and minimize risks. Therefore, despite the difficult economic conditions and weak circulation of goods, investment credit in agriculture and rural areas continues to grow steadily and favorably, because this sector is meeting the practical needs of daily life.

Quynh Lan