The State Bank of Vietnam approved a list of participants for a 2.3 trillion VND (109 million USD) pilot programme offering preferential loans for agricultural development.

Commercial banks and customers in Lam Dong, Nam Dinh, Can Tho, Dong Thap and Nghe An will be the first to benefit, according to State Bank Governor Nguyen Van Binh.

The southern province of Dong Thap will get the most money, more than 1.04 trillion VND (48.8 million USD). The central province of Nghe An province will get 524 billion VND (24.5 million USD), Can Tho city in the Mekong Delta, 284 billion VND (13.3 million USD), Lam Dong province in the Central Highlands, 80 billion VND (3.7 million USD) and the northern province of Nam Dinh, 75 billion VND (3.5 million USD).

Businesses in these places will have to pay interest rates of just seven percent per year for short-term loans, 10 percent for medium-term loans and 10.5 percent for long-term loans.

Short-term loans will be granted for farmers to buy fertilisers, seedlings and poultry and livestock breeds as well as agricultural equipment. The medium and long-term loans will support investments in infrastructure and equipment to develop hi-tech models.

The loans aim to forge finance connectivity between businesses and farmers for new farming models such as large-scale rice farms and application of advanced technology.

Many of these models had shown their effectiveness in several areas, Binh said, citing as examples the large-scale rice field model in An Giang province, the hi-tech vegetable and flower production model in Lam Dong province and the dairy farming and milk production model in central Nghe An.

In May, four businesses in An Giang received 350 billion VND (16.4 million USD) through the programme, which is jointly organised by the State Bank, the Ministry of Agriculture and Rural Development and the Ministry of Science and Technology.

After the two-year trial period, the three institutions will work together on policies to apply the programme on a larger scale.-VNA