VN increases unsecured loan cap for farmers to $12,000 from July

VN increases unsecured loan cap for farmers to $12,000 from July

Starting from July 1, farmers are allowed to borrow up to VNĐ300 million (US$12,000) without collateral as part of an effort to promote rural development, according to a new Government’s decrease.

A duck raising farm in Quảng Yên Town, Quảng Ninh Province. Starting from July 1, farmers are allowed to borrow up to VNĐ300 million (US$12,000) without collateral. — VNA/VNS Photo Hoàng Hiếu

Starting from July 1, farmers are allowed to borrow up to VNĐ300 million (US$12,000) without collateral as part of an effort to promote agriculture and rural development, according to a new Government decree.

The Government has issued Decree No 156 amending previous policies under Decree No 25/2015 and Decree 116/2018 on credit policies for agriculture and rural development, according to the State Bank of Việt Nam.

The new policy increases the unsecured lending ceiling for households and individuals from VNĐ100-200 million to VNĐ300 million. For cooperative groups and household businesses, the limit is increased from VNĐ300 million to VNĐ500 million. Farm owners can borrow up to VNĐ3 billion from previously VNĐ1-2 billion while cooperatives and alliances will be able to borrow up to VNĐ5 billion, up from VNĐ1-3 billion.

The decree also simplifies loan procedures. Accordingly, borrowers are no longer required to submit certificates proving their land is dispute-free. The submission of land use right certificates will be handled based on agreement between borrowers and banks rather than being made compulsory.

Notably, the decree expands credit incentives to include organic and circular agriculture, allowing them to access preferential terms similar to those of high-tech and value-chain based agricultural production.

This is seen as part of VIệt Nam’s broader effort to promote sustainable and modern farming. 

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