Limits raised for non-mortgage agricultural loans

Thursday, Jun 11, 2015 18:05

Fishmen catch fish offshore. Banks can lend up to $142,850 to a union of co-operatives, which seeks non-mortgage loans to deal in offshore seafood exploitation, according to a newly issued decree. — Photo

HA NOI (Biz Hub) — A new decree has raised the limits for agricultural and rural development loans, excluding mortgages.

Decree No. 55/2015/ND-CP, issued on June 9 and going into effect on July 25, states that banks can lend up to VND3 billion ($142,850) to a union of co-operatives dealing in aquaculture or offshore seafood exploitation.

A household involved in a seafood cottage industry can borrow up to VND2 billion ($95,240), while a household or an individual growing industrial crops or perennial fruit trees can seek loans amounting to VND200 million ($9,520).

A household or individual involved in agricultural production and related business activities can secure loans worth VND50 million to VND100 million ($2,380 to $4,760).

An old decree, which has been valid since 2010, stipulated banks' lending caps of VND500 million ($23,800) for agricultural co-operatives and farm owners and VND200 million for households dealing in farming services.

It also fixed a maximum lending amount of VND50 million for individuals or households associated with agriculture, forestry, pisciculture and salt production.

VnExpress online said the changes were based on the State Bank of Viet Nam's (SBV's) suggestions, which were aimed at easing rural credit, and the fact that costs in some of these cottage industries had prompted significant demand for capital.

Reports before the National Assembly stated today that agricultural and rural credit amounted to some VND798 trillion ($38 billion) nationwide at the end of May, an increase of 7.2 per cent over last year-end. The loans for this prioritised sector represented 19.3 per cent of all loans in the country.

According to the SBV, the overall credit growth of the domestic banking system this year reached 4.8 per cent as of May 28, significantly higher than the 1.3 per cent recorded during the same period last year. — VNS

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