Banks to consider loan efficiency
Banks to consider loan efficiency
Commercial banks take efficiency into consideration when providing loans for high-tech agriculture projects, according to Deputy Governor of the State Bank of Viet Nam (SBV) Dao Minh Tu.
Vietnam News Agency on Saturday quoted Tu as saying that a bank would always consider the borrowers’ ability to pay back the loans, based on the consumption of products.
“If investment and production are not suitable to the demand in the market and the economy, products will be not consumed,” Tu said. “Therefore, enterprises must avoid investment according to a movement, while banks must analyse supply and demand in the economy for agricultural products, especially products from high-tech agriculture projects.”
Banks should avoid too much investment in agriculture, leading to oversupply of farming products, as this will cause difficulty in the consumption of those products, he said. This is in turn, will make it difficult for the enterprises to pay back the loans, leading to bad debts for banks.
Promotion of high-tech agriculture must be in line with supply and demand, and the allocation of investment should not be according to movement alone; socialisation of investment activities should be encouraged, Prime Minister Nguyen Xuan Phuc had said previously.
The Government will focus on providing loans from the credit package of VND100 trillion (US$4.44 billion) for high-tech agriculture projects, Phuc said.
Tu said that eight commercial banks had registered to provide loans from the package of VND100 trillion for high-tech agriculture projects.
They have provided total outstanding loans of VND26 trillion for about 4,000 customers, including VND21.7 trillion for high-tech agriculture projects and VND4.3 trillion for clean agriculture projects, he said. At present, there is no bad debt.
“The initial development of the package has brought positive results,” Tu said.
Earlier, the SBV issued the Decision 813/QD-NHNN on providing loans for development of high-tech and clean agriculture with the credit package of VND100 trillion. The package is provided to enterprises and individuals having demand on credit to develop projects and plans for clean agriculture, agricultural production and business using high-tech. The projects and plans must meet standards under the Decision 738/QD-BNN-KHCN of the Ministry of Agriculture and Rural Development.
The loans have annual interest rate 1 per cent to 1.5 per cent lower than the interest rate for regular loans at commercial banks.
