Source: Nhan Dan.
Original news wire here.
Vietnam, November 15 – The World Bank has pledged to provide USD $200 million to help improve Vietnamese farmers’ access to finance.
An agreement to the effect, the Vietnam Third Rural Finance Project, was signed in Hanoi on November 14 by State Bank of Vietnam (SBV) governor Nguyen Van Giau and Martin Rama, the World Bank Acting Country Director for Vietnam.
The total cost of this project is US USD 279.29 million. The remaining USD 79.29 million will be provided by the Vietnamese government as the counterpart fund (including contribution capital of the participating credit institutions and the end borrowers).
The project aims to provide loans for investments in productive assets and associated working capital needs for micro and small enterprises with less than 50 employees, providing micro credit to the rural population, and assisting the participating credit and financial institutions to render better services and develop new products for the rural areas.
This project will increase the total investment in Vietnamese rural areas to the minimum level of USD 253,000 (VND 4,228 billion), which will be provided to 90,000 economic units and 20,000 individuals, poor households, and micro enterprises. Besides, it is expected to create 150,000 new jobs for the countryside.
The five-year project, starting from December 2008, targets all of the localities across the country, with the exception of the four cities of Hanoi, Haiphong, Da Nang and Ho Chi Minh City.
The money will be channelled through the Bank for Investment and Development of Vietnam (BIDV), which performs a wholesale banking function in disbursing the funds to the other financial institution, In turn, the financial institutions will make loans with market rates to the rural households and enterprises based on eligible criteria including financial soundness, environment compliance, employment generation impact etc.
The 3rd Rural Financial Project is to follow up the 1st and 2nd WB-financed projects, which have the total amount of USD 348 million.
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