DA LCASP - Remove bottlenecks in capital

: Monday - 08/05/2017 10:10  |  Viewed: 2599
The Low Carbon Agriculture Support Project is implemented on the basis of the Asian Development Bank (ADB) loan agreement signed between Vietnam and ADB on March 7, 2013. The project has 4 components and total investment of 48,170,000 SDR (approximately $ 74 million). Of which credit is 23,239,000 SDR (approximately $ 32 million).

The project was implemented in 10 provinces of Lao Cai, Son La, Phu Tho, Bac Giang, Nam Dinh, Ha Tinh, Binh Dinh, Tien Giang, Ben Tre and Soc Trang. Time is from 2013 to 2018; The duration of the credit component of the project is 30 years, of which there are 8 years of grace. After more than three years of implementation, the Low Carbon Agricultural Assistance Project (LCASP) has confirmed its effectiveness in minimizing environmental pollution, creating clean energy sources, improving livelihoods and improving the quality of life of people. Rural people. However, the project has not created the spillover which is at the stage of disbursement.

The paradox of small loans - big mortgage
The report of the Consultant for the Low Carbon Agriculture Project (LCASP) shows that the people in the 10 project provinces are aware of the environmental and economic benefits of the biogas plant. Small bring. Because of that, only from the end of 2015 to now, the LCASP project has built and installed 26,645 small-scale works, tested 25,138 works and transferred money to support 24,539 other works. "But this number is too small compared to the needs of the people in the 10 provinces participating in the project." Deputy Head of the Project Management Unit (MARD) cum Central Project Director Nguyen The Hinh LCASP Project Management Board .

One of the main reasons for this "swing" is attributed to the fact that the financial institutions of the project are only suitable for large scale loans, while the demand for small loans (from 10 - 20 million) is very large. In addition, access to project funding for small-scale loans is difficult. According to Decree 55/2015 / ND-CP of the Government regulating the mechanism of loan security for all commercial banks, "customers who are loans without security assets must pay to Credit institutions providing loans for land use right certificates or certificates of land use right certificates without certification of land use rights without dispute shall be certified by the People's Committee of the commune. " Thus, according to this provision, all loans of customers at commercial banks must submit red books, making it difficult for households and enterprises that have credits in banks and have handed over books. Red for the bank. The remaining households do not want to keep a red book with a small loan.

The solution to the capital "knot"
Another survey showed that there are about 260,000 households raising more than 10 pigs / household in 10 provinces in the project where there is no biogas plant in need of construction support. Salty with the support of the LCASP Project. To address this issue, on October 5, 2016, the Asian Development Bank (ADB) signed the Memorandum of Understanding on the principle of recommending that the Bank for Social Policy (VBSP) be involved in the implementation of the agreement. Credit for Biogas Value Streams (Biogas Plant) of the Low Carbon Agriculture Support Project.

According to ADB, VBSP has branches in 63 provinces and cities and has a nationwide network to communes, wards and villages, thus facilitating disbursement and dissemination of project policies. Farmers. In addition, VBSP delegates to four associations, including the Women's Union, the Farmers' Association, the Veterans Association and the Youth Union, to carry out some of the steps in the lending process. This is an advantage to attract women and farmers participation in the project to help the project communication reach the people.

In particular, VBSP applies microfinance lending rules that do not require collateral in red books but only use collateral through government and mass organizations, which is a prerequisite for disbursement. Project capital for small scale livestock households. On the other hand, according to ADB, VBSP has experience in disbursement of small loans for biogas projects without collateral from Rural Water Supply and Environmental Sanitation Program, disbursement will be rapid And more convenient. Moreover, the capital of the project is medium and long-term capital, thus facilitating disbursement for credit purposes of the project. Loans without collateral of up to 50 million VND.

Based on the experience and reality of rural credit provision, VBSP is expected to design credit products of the Low Carbon Agricultural Support Project as follows: Loan size up to 50 million VND / small scale (No loan guarantee). Expected average loan is 20 million VND per household. In addition, for a loan of over VND50 million, borrowers must have assets secured by property. Term of loan 3-5 years, grace period of 6 months. The lending interest rate is expected to be at least 10% lower than the commercial interest rate. Disbursement method: Disbursed one or more times according to the progress of the will
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