Over the years, the banking industry has always identified agricultural and rural credit as one of its five priorities. Banks which particularly play a key role in providing capital to support agricultural and rural development have strongly implemented solutions to promote financial inclusion.
Associated with the goal of banking development
According to some banking experts, while financial institutions’s presence in Vietnam has been expanded and the demand for loans from individuals and enterprises has increased, the proportion of individual customers accessing to financial products and services is still modest compared to customers’ needs and their development potential, especially for the poors and people living in rural and remote areas. Therefore, promoting financial inclusion is one of the solutions that should help to solve the problem.
It’s been a year since the promulgation of the National Comprehensive Financial Strategy to 2025, and vision toward 2030 and it has been rigorously implemented by many banks including Co-opBank. According to Co-opBank’s Chairman Nguyen Quoc Cuong, after nearly 30 years since its establishment, currently there are 32 branches and nearly 100 transaction offices in the Co-opBank system, supporting almost 1,200 PCFs and nearly 2 million customers who are individuals and households, contributing to usury limitation, hunger elimination and poverty reduction, effectively implementing related policies of the Party, the Government and the State Bank on farmers, agriculture and rural areas and economic restructuring in agricultural and rural areas…
According to Mr. Nguyen Quoc Cuong, the network’s mission is in line with the comprehensive financial strategy. In order to exploit the strengths that this strategy can bring, Co-opBank has identified three major goals which are to exploit the local lending capital, bring extensive financial services to the local communities and strengthen its relationship with the PCFs.
In the context of digital transformation, Co-opBank’s Mobile Banking is expected be launched in December 2021, converting its bank cards into chip cards. It is also expected that in 2022, security solutions will be implemented to maximize its network security.
In parallel, training, changing people’s concept, upgrading the internal management system, restructuring the organization and improving financial capacity are other important tasks under the current situation and to be relevant to the industry’s development strategy as well as the comprehensive financial inclusion strategy…
As rural agriculture is a traditional market of the Bank for Agriculture and Rural Development of Vietnam (Agribank), said Mr. Le Xuan Trung, Deputy CEO, Agribank has always play a key role in the development of rural agriculture with the proportion of loans to agriculture and rural sectors accounting for 70% of its VND 850,000 billion total outstanding loans. Its loans have been distributed to all communes, contributing to the promotion of financial inclusion, towards sustainable development of agriculture and rural areas, actively contributing to hunger eradication, poverty reduction and new rural reform.
Specifically, over the past years, Agribank has effectively implemented two national target programs: poverty alleviation and new rural reform, helping people in the agricultural and rural areas to access preferential capital, feel more secured and confident in their production and busines sactivities. Every year, the bank has spent thousands of billions VND to provide low interest loans for priority groups, making bank’s credit a driving force for the growth of the country’s economy.
It has accompanied people in hunger eradication and poverty reduction with lending policies for fisheries development in 28 coastal provinces…, actively deploying mobile banking to provide banking and financial services especially for those based in in remote and under-privileged areas with nearly 20,000 transactions to 1.8 million customers…
Making efforts to duplicate successes
Appreciating the efficiency of the banking industry in financial inclusion, Assoc.Prof.Dr. Nguyen Thanh Phuong, Dean of the Faculty of Finance, Banking Academy assessed that financial products and services’ supply channels for agriculture and rural areas have constantly developed in both traditional and modern channels.
The number of products and services have increased with more diversity and used the most advanced level of scientific and technological development today. The quality of financial services have improved significantly thanks to increasing application of modern technology, increasing convenience for users while reducing transaction costs, suitable for all in agricultural and rural economic sectors and people in remote areas.
Besides highlighting the achievements, some experts noted that the banking network has not covered all remote and isolated areas, which affects the accessibility of services as well as the customers’ limited ability make a choice. Financial and banking products and services for the rural population are still limited and not fully diversified. Also, legal documents regulating financial activities in rural areas have not yet completed.
Mr. Nguyen Xuan Thang, Head of the Executive Board of the Farmers Support Fund, Vietnam Farmers Union, who often works closely and deeply understands farmers’ needs, proposed that credit institutions need to actively promote agricultural and rural credit entrustment activities through the signing of agreements and inter-sector documents with socio-political organizations in order to bring financial service activities to remote, disadvantaged areas that have not been reached.
In order to increase loan demands, lending products for agricultural and rural development should be more diversified and lending procedures should be simplified with unnecessary procedures to be removed.
“In particular, the 4th Industrial Revolution will bring many opportunities for banks and credit institutions in promoting financial inclusion in the coming time” said Dr. Vu Hong Thanh, BIDV Research and Training Institute. More information technology and digital should be used to integrate with other products and services for banks to reach and satisfy customers in remote and isolated.
Big data and customer behavior analysis will be a future trend for the digital age as internal and external data can be obtained through a customer behavior analysis organization in order to improve customer service’s quality, bring more added values, reduce costs and support decision-making processes for customers in rural areas.
The Banking Journals
