14:35 | 05/01/2016 Finance - Banking
(VEN) - The Ministry of Finance signed an agreement to loan US$105 million of World Bank (WB) funding to the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) in late November. These loans are part of US$238 million in credit provided by the WB for the Vietnam Sustainable Agriculture Transformation (VnSAT) project.
The VnSAT project will provide direct assistance for about 140,000 rice farming households in the Mekong Delta - Photo: Can Dung
BIDV will disburse these loans in the first quarter of 2016 to help businesses in the Mekong Delta upgrade rice processing technology and equipment and promote coffee replanting in the Central Highlands.
The WB provided the preferential credit with the aim to help the Vietnamese government effectively implement its Agricultural Restructuring Project through improving the institutional capability of the agricultural sector, renovating cultivation methods, and enhancing the rice and coffee sector value chains in the Mekong Delta and Central Highlands – Vietnam’s two key commodity production regions. BIDV has been assigned to manage and disburse the credit.
The VnSAT project will help improve state capacity in the fields of research, design, and transfer of technologies to farmers, as well as in monitoring the restructuring and renovation of the agricultural sector. At the same time, the project will provide direct assistance for about 140,000 rice farming households in Kien Giang, An Giang, Hau Giang, Tien Giang, Long An, Dong Thap, Can Tho, and Soc Trang so that they can access advanced technologies and set up value chains to increase their profits per hectare by 30 percent, bringing US$40-60 million in added value for the whole region annually.
In the Central Highlands, the project will help about 63,000 farming households in Lam Dong, Dak Lak, Dak Nong, Gia Lai, and Kon Tum access sustainable cultivation techniques to re-plant coffee and increase their incomes by 20 percent, bringing about US$50 million in added value for the whole region annually.
Tran Anh Thu, Director of BIDV’s Branch 3 - the unit that directly manages and disburses the WB credit, said, “BIDV will complete the necessary procedures so that the disbursement can begin in the first quarter of next year.”
This was the fourth time the Ministry of Finance has signed an agreement with BIDV to issue loans from international credit sources. Before that, BIDV received US$548 million in WB credit from the ministry for loans to three rural finance projects. The bank has safely managed and disbursed these WB loans on schedule, contributing to the effective implementation of the projects. BIDV was committed to refunding the principal, profit and charges to the Ministry of Finance on schedule so that the foreign debt can be repaid on time. So far, BIDV has disbursed about US$2.1 billion through providing loans to more than 1.7 million households, including 600,000 poor households, creating 400,000 new jobs for rural people. The projects have also contributed to improving rural people’s awareness of environmental protection.