Agribank: Solid Support of Vietnam Agriculture

With the missions assigned from the very beginning of establishment: Serving the reform and development of agriculture, farmers and rural areas in Vietnam, after 33 years of development (March 26, 1988 - March 26, 2021), Agribank has managed to fulfill the responsibility of a pioneering and leading bank in agriculture and rural development, achieved firm growth and greatly contributed to the development of the banking industry to deserve the trust, responsibility and expectation placed in it by the Government and the people.

In its early days, despite facing numerous difficulties and challenges, all employees of Agribank across generations united and endeavored to make Agribank the largest bank by total assets, capital mobilization and outstanding loans to the economy. By the end of 2020, Agribank had total assets of over VND1,570 trillion (US$68 billion), fund source of over VND1,450 trillion (US$63 billion), and total outstanding loans to the economy of over VND1,210 trillion (US$52.5 billion). Outstanding loans to agriculture and rural development accounted for approximately 70% of Agribank's outstanding loans and accounted for a large share of outstanding loans to agriculture and rural development in Vietnam. Agribank has made remarkable and timely contributions to Vietnam’s agricultural development and rural development. The bank has also given a helping hand to address employment matters, transform labor structure, improve people's livelihoods, and support agriculture and rural development to perform its role as a core backbone of the economy in difficult times.

Adhering to the direction and leadership of the Party, the Government and the State Bank of Vietnam (SBV) on accelerated implementation of agricultural and rural industrialization and modernization strategy, over the past time, Agribank has quickly brought resolutions on agriculture, farmers and rural areas into life (Resolution 15-NQ/TW dated March 18, 2002, Resolution 26-NQ/TW dated August 5, 2008); taken the lead in effectively carrying out credit policies on agriculture and rural development (Decree 41/2010/ND-CP, Decree 55/2015/ND-CP, Decree 116/2018/ND-CP that amends Decree 55) and other policy credit programs. Of its VND1,210 trillion lent to the economy, Tam Nong (agriculture, farmers and rural areas) accounted for 70%. Agribank is also the largest lender of agricultural and rural development in Vietnam. Currently, the bank is a pioneer and key force to effectively carry out seven policy credit programs and two national target programs on new rural development and sustainable poverty reduction, thus helping Vietnam fulfill its millennium goals on poverty reduction 10 years ahead of schedule and be globally recognized as an effective poverty reduction model.

Starting with 11 communes that piloted rural development at the end of 2011, after 10 years, Agribank finished the program nearly a year ahead of schedule. The bank provided loans of VND2,868,290 billion, recollected mature loans of VND2,387,151 billion and had an outstanding loan of VND481,138 billion. The lender has 2,620,578 customers in 8,939 communes, who mainly borrowed money for agriculture, forestry, fishery, salt production and rural infrastructure construction. This has affirmed Agribank's leadership in bringing the new rural construction movement to the finish line earlier than the time set by the Resolution of the 12th National Party Congress and the National Plan of the National Assembly. It has helped raise the income of rural people from VND12.8 million in 2010 to VND43 million in 2020 and quickly reduce the rural poverty rate by 1.5% a year to just 4.2% now.

Agribank's credit flows are largely channeled into green production and business, clean energy and high technology application. It has restructured loans to short-term as guided by the State Bank of Vietnam. With a large amount of funding for agriculture and rural areas each year, Agribank has met investment needs of all economic sectors, promoted agricultural and rural development, and created agricultural commodity markets with many key products, high export value and brand names in the region and the world. Together with credit investment, Agribank provides over 200 convenient banking products and services and diversified distribution channels to meet payment requirements of customers and the economy. The bank works together with women's unions and farmers' unions at all levels to effectively provide loans, open mobile transaction points using special cars, launch Tam Nong Card scheme, and offer consumer credit programs to facilitate people in rural, remote and isolated areas with the opportunity to access funding and banking services, reduce unauthorized credit and promote noncash payment development in Vietnam.

Agribank is also the first commercial bank to "pave the way" for an investment wave for high-tech organic agriculture development in Vietnam by launching an agricultural credit program of at least VND50 trillion in November 2016 without any restriction on capital sources, which carries an interest rate 0.5-1.5% lower than its preferential lending rates. As of October 31, 2020, the program provided nearly VND30 trillion of loans, with current outstanding loans amounting at over VND5 trillion lent to nearly 4,000 customers. Some of the big Agribank-funded projects included VND4.1 trillion for fruit and vegetable processing plants for export in An Giang and Vinh Long provinces and VND3.7 trillion for shrimp rearing and dairy cow farming projects in Ninh Thuan province. Notably, animal feed production projects in Ha Nam province were lent nearly VND5 trillion. This shows the important role of Agribank in agricultural product chains. The bank aims to help raise product quality and value to meet strict criteria in fastidious markets and seek a strong foothold in regional and world markets.

One of the new points in the country's development approach in 2021-2030 adopted by the Party and Government is coupling rural economic development with new rural development. To give a helping hand for the successful implementation of tasks and solutions for agricultural and rural economic development in association with new countryside development and, at the same time, further maintain its key role in agriculture and rural development, Agribank continues to focus its capital resources and expand loans for effective agricultural and rural development projects and programs, especially those creating added value, promoting agricultural production transformation, expanding the value chain, and building a clean, smart and sustainable agriculture.

By Hoang Tham, Vietnam Business Forum