Shrimp is the one of four Vietnam main exporting aquaculture products (accounting for 44.4% of exporting revenue in 2015), Vietnam shrimp has been exported to 164 countries, created jobs and income for around 700,000 households. However, Vietnam shrimp industry is facing with difficulties/challenges: (i) disease outreaching such as EMS, EHP, (ii) Environment pollution caused by overgrowth, (iii) The gap between the development of shrimp raising technology and the environment change, disease, (iv) food safety management, (v) trading barriers and the complicated standards system, (vi) climate change…. and specially the shrimp producers always are hungry for “LOANS”.
To open the “knot” of access loans for shrimp producers/processing companies, In Bac Lieu, on January 17, 2017. The management committee of the project “Sustainable and Equitable Shrimp Production and Value Chain Development in Vietnam SUSV”, OXFAM Viet Nam and ICAFIS have collaborated with Banking Strategy Institute and State Banks in Soc Trang, Bac Lieu, Ca Mau province to organize the consultancy workshop on “Solutions for loaning development for shrimp value chain in Soc Trang, Bac Lieu and Ca Mau province”
There were more than 90 participants from Vietnam Banking Strategy institute, provincial state banks in three provinces, Department of Agriculture and Rural Development, the sub-department of fisheries, Agriculture extension center of Soc Trang, Bac Lieu, Ca Mau province, fisheries magazine, local media in Mekong delta and shrimp farmer groups/cooperatives management boards in three provinces, Shouth Vina Shrimp company, Au Vung company, Lasan company….
From the beginning of the project in May 2016, the project SUSV has facilitated the 30 linkages in three provinces, linking shrimp production to input and output. The evidence of the value chain development is the shrimp value chain stakeholders have signed a lot of farm contracts with farmer groups/cooperatives to support each other for mutual benefits and the sustainability of shrimp value chain.
In the context of shrimp industry, it requires the advanced technologies, applying international standards. In addition, the effect of climate change, the environmental pollution, disease out_breaking are big challenges for shrimp production. Therefore, shrimp producers need to access loans for applying advanced technologies to enhance their production effectiveness or for reproduction…. Besides that the processing companies, shrimp input suppliers also need loans for better integration and the shrimp value chain sustainability.
In the workshop, the value chain stakeholders (shrimp producers, processing companies, input suppliers) presented their difficulties to access loan for production... They expressed aspiration to access preferential loans from state banks, policies to support shrimp producers in order to promote the sustainability of shrimp industry as well as Vietnam shrimp brand in international market.
The participants had chance to listen Mr. Pham Xuan Hoe – Vice chairman of Vietnam Banking Institute presenting “solutions for loaning for shrimp value chain in Soc Trang, Bac Lieu and Ca Mau province”. Specially PhD. Le Thanh Luu – chairman of International Collaborating Center For Fisheries Sustainability (ICAFIS) presented the status of farmer groups’/cooperatives’ capacity and how to support them.
In the workshop, Mr. Bien Viet Nhu – the CEO and chairman of board of directors from Shouth Vina Shrimp company shared the need to access the loan as a shrimp processing company joining in the shrimp value chain and supporting shrimp producers.
Through discussions and sharing, representatives from state banks and commercial banks in three provinces agreed that:
- Most of banks were interested and promised to promote loaning program for aquaculture and shrimp production.
- Shrimp value chain loaning is potential business for banks in short-term and medium term for banks.
About legal corridor, the presentative from state bank shared:
- Decree No. 55/2015 / ND-CP has encouraged credit policies for agricultural production applying value chain model with credit provisions being considered for loans without collateral shall not exceed 70% of project/plan budget (for direct agricultural production organizations/individuals) and a maximum of 80% (for enterprises, cooperatives, unions of cooperatives playing as the value chain hubs to implement agricultural value chain projects.)
- Decision 1050 / QD-NHNN has created a specific mechanisms to regulate that the companies implementing the pilot program will be considered by commercial banks to receive loans without collateral at maximum to 90% the business project budget based on the cash flow management.
There are also opportunities for shrimp farmer groups/cooperatives to receive loans when joining value chains according to sharing by the representative of Agriculture Bank:
- Agriculture Bank – Agribank just announced the preferential credit package of 50,000 billion VND for clean agriculture production, it took effect on November 01, 2016. The beneficiaries are companies, cooperatives, cooperative union, farm which join in agriculture value chain and big-scale production.
- For farmer groups/cooperative, there is the Decision No. 2210/QD-NHNN-HSX on December 12, 2015 guides providing loans for cooperatives/cooperative unions for Agriculture and Rural Development Bank.
- In addition, based on the Degree No. 55/ND-CP 2015, the commercial banks continuously evaluate providing loans for agriculture and aquaculture value chain.
In the coming months, the project SusV will continuously accompany with state bank, commercial banks in the provinces to improve the value chain loaning criteria and provide technical support for commercial banks in evaluating loan receivers in order to bring benefits to shrimp producers and shrimp value chain being hunger for loans.
Xuân Lập, Thế Diễn - ICAFIS