Hanoi (VNA) – Shifting agricultural lending from collateral-based requirements to cash-flow assessment, linked with insurance and value chains, is emerging as a key solution to support Vietnam’s transition to digital and green agriculture, experts said at a workshop on agricultural credit policy on April 24.
At the workshop on improving credit policies for digital and green agriculture, organised by the Dai bieu Nhan Dan (People’s Representatives) newspaper, policymakers, bankers, and businesses highlighted persistent barriers that continue to limit access to finance despite growing credit flows into the agricultural sector.
The discussion was held as a step to implement the Politburo’s Resolution No. 57-NQ/TW on science – technology development, innovation, and national digital transformation.
Institutional bottlenecks and risk-sharing mechanisms
Statistics show that outstanding loans to the agriculture and rural development sector reached about 4.2 quadrillion VND (nearly 159.6 billion USD) by the start of 2026, up more than 14% year-on-year and accounting for over 22% of total credit in the economy. This funding is currently providing direct support to more than 14.6 million beneficiaries nationwide.
Green credit also expanded to nearly 780 trillion VND by the end of 2025, mainly focusing on renewable energy, clean energy, and green agriculture.
These figures point to a clearer reorientation of capital towards priority sectors.
However, experts noted that the challenge lies less in the volume of credit than in its structure and quality. Current lending practices remain heavily dependent on traditional collateral requirements and do not adequately reflect the needs of modern agriculture, which requires long-term financing, flexibility, and close integration with value chains.
Ta Dinh Thi, Vice Chairman of the National Assembly's Committee for Science, Technology and Environment, said credit plays the key role in agricultural transformation, but institutional bottlenecks, administrative procedures, limited risk-sharing mechanisms, and weak insurance coverage continue to hinder capital flows.
He stressed that agricultural transformation involves not only changes in production methods but a comprehensive shift in mindset and action, with financing across the entire value chain being the decisive factor.
Agricultural credit still heavily dependent on collateral
Nguyen Quang Huy, head of the finance – banking faculty at the Nguyen Trai University, said agricultural credit still relies heavily on collateral, particularly real estate. This poses difficulties for farmers and businesses operating on leased land, which is often not accepted as loan security.
He also pointed to fragmented lending and limited value-chain linkages, saying insufficient digital skills among farmers and cooperatives have also slowed the transition.
Against this backdrop, Agribank has emerged as a notable example thanks to its new approach. With outstanding loans to the agricultural and rural sectors reaching 1.26 quadrillion VND, accounting for around 64% of its total loan portfolio, the bank is serving about 2.7 million customers, more than 90% of whom are individuals in rural areas.
The bank has gradually shifted from collateral-based lending to assessing borrowers based on cash flow and the viability of production plans, helping expand access to finance for those lacking collateral.
Nguyen Quang Ngoc, deputy head of Agribank’s Credit Policy Department, said the focus has evolved from simply helping people obtain loans to ensuring that capital is used efficiently to generate sustainable incomes and reduce poverty.
From the business perspective, Nguyen Van Long, Chairman and General Director of the Nhat Long JSC, said modern agriculture requires substantial investment in technology, infrastructure, processing, and traceability systems while production cycles are long and face high risks. Yet enterprises still face difficulties accessing credit because of collateral requirements, unsuitable loan terms, and limited risk-sharing mechanisms.
Agricultural insurance – missing element
Agricultural insurance was also identified as a crucial missing element.
Le Dinh Huy, Deputy General Director of Agribank Insurance Corporation (ABIC), described insurance as an essential risk-management tool for both farmers and lenders amid increasing climate-related risks.
For farmers, insurance is a "lifeline" that helps stabilise finances and maintain production after natural disasters or epidemics. With this protection, they can confidently invest, adopt technology, and adhere to production standards.
For banks, insurance can act as a form of "trust-based collateral". When a loan is insured, credit institutions can confidently disburse funds, even to customers lacking collateral.
Experts agreed that without effective risk management tools, green and digital agricultural credit will struggle to reach its full potential.
Building an integrated ecosystem that combines supportive policies, flexible financing, insurance, and stronger production capacity will be essential to accelerating the sector’s sustainable transformation./.
