Loans remain inaccessible for farmers

The government has promised to provide loans to support the development of hi-tech agriculture, but farmers say bank loans are still out of reach.

Doan Minh Chien in Binh Duong province has 50 hectares of land. He has spent VND30 billion to develop a farm and dreams of organizing large-scale production. 

However, Chien finds it too difficult to access bank loans.

“In the last 34 years of developing the farm, I could for the first time borrow tens of millions of dong to farm with VietGap standards. When I asked for more capital, banks told me that they would lend money only if I can show ‘red invoices’ (the official invoices that serve as official proof of commercial transactions),” Chien said.

According to Chien, the requirement places big difficulties for farmers, because in most cases, transactions are carried out under verbal agreements, with no official invoices. 

“If I cannot show red invoices, we are considered tax evaders, and of course, we cannot borrow money from banks,” he complained.

The government has promised to provide loans to support the development of hi-tech agriculture, but farmers say bank loans are still out of reach.

Ung The Lam, the owner of TICAY, a farm that grows clean dragon fruit for export, revealed that he has to ‘go through the back door’ to borrow money. His problem is that his residential book shows he is in HCMC, but his farm is located in Binh Thuan province. 

When he went to banks in Binh Thuan province to ask for loans, he was told that the banks would only provide loans to farms in the province, not investors from other localities. 

Meanwhile, the banks in HCMC hesitated to lend, because they cannot supervise a farm in Binh Thuan province.

Finally, Lam was able to borrow capital, but had to pay the high interest rate of 9 percent per annum.

In the last three years, the government and the State Bank have released 44 legal documents on credit, including 24 documents applied specifically to the Mekong Delta.

Some farmers said to borrow capital, one needs to have ‘close relations with banks’, or ‘go through the back door’. They also said that new legal documents released to settle existing problems create new problems.

Under Decree 55, farmers can borrow from VND50 million to VND 3 billion without collateral. However, the decree stipulates that borrowers have to show the land use right certificate. 

The government has decided to disburse VND100 trillion for farming projects to help develop hi-tech agriculture. It is the biggest-ever credit package given in the field.