The State Bank of Vietnam (SBV) issued an official document asking credit institutions to support borrowers in the livestock industry, especially pig farmers in need of credit extension as market demand struggles to find equilibrium.
The document, titled 3091/NHNN-TD in late April, urged credit organisations, on the basis of current legislation and of debtors’ financial situations, to apply the appropriate aid. This might include extending the payment period and lessening or eliminating interest rates.
Commercial banks and credit institutions are to preserve the current debts while allowing for more loans in order to support borrowers with any feasible business plans to continue breeding livestock.
Financial institutions across the country are to strictly comply to the SBV’s request and submit quarterly reports to the SBV on their efficiency in aiding farmers through the current market slump. Any difficulty encountered during implementation must be reported immediately.
The SBV’s intention is to help farmers resume production in the foreseeable future.
Right after the document was issued, two banks responded to the SBV: the Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank) and the other the Kien Long Commercial Joint Stock Bank (Kienlongbank).
The LienVietPostBank’s Board of Directors will give a preferential package of VND500 billion (US$22.3 million) to pig farmers or frozen pork processors with an annual interest rate of less than two per cent compared to their current average in a one year period.
Kienlongbank also will consider decreasing about 30 per cent of the annual interest rate to those currently receiving the bank’s credit funding in the pig farming industry. The estimated time of implementation is three months or 90 days from May 10, 2017.
During this time, Kienlongbank will continue to support their borrowers in extending the prompt period and decreasing interest payments.
The two banks also asked their employees and other personnel to support farmers through purchasing their products at reasonable prices.
The current drop in domestic pork prices is due to various factors. The main reason was that farmers did not have a reasonable production scale, leading to oversupply and market saturation. – VNS