Green credit provision strengthened in agriculture

Of the 12 green areas in Vietnam, credit balance in clean agriculture accounted for 32%.

The Ministry of Agriculture and Rural Development (MARD) is planning to coordinate with the State Bank of Vietnam in completing policies on preferential credit to support agricultural projects following value chains, applying high technologies and specialising in clean agriculture and production forest planting.

Statistics from the central bank showed that as of the end of 2022, outstanding loans for green projects reached 21 billion USD, accounting for more than 4% of the total outstanding loans of the whole economy, and an increase of nearly 13% compared to the end of 2021.

In the 2017-2022 period, the credit balance of the banking system for Vietnam's green fields had an average growth rate of more than 23% per year. Of the 12 green areas, credit balance in clean agriculture accounted for 32%.

According to the Law on Environmental Protection, green credit is one granted to an investment project that effectively uses natural resources; responds to climate change; strengthens waste management; promotes pollution treatment, environmental quality improvement; restores natural ecosystems; specialises in conservation of nature and biopersity; and generates other environmental benefits.

Tea production (Photo: nongnghiep.vn)

In September 2022, the MARD Minister issued a decision approving an action plan of the ministry in implementing the national strategy on green growth in the 2021-2030 period, aiming to promote agricultural development towards ecological, organic, circular, low carbon, and energy and natural resources efficient direction, heading to a carbon-neutral economy in 2050.

Over the years, many large-scale firms have invested in organic and circular agriculture in all areas of breeding, cultivation and aquaculture. Agriculture is one of the areas with the highest demand in green credit.

Along with support from State agencies, experts advised businesses to seek measures to effectively access green credit resources by clarifying their projects’ efficiency in environmental improvement as well as sustainable production solutions that are beneficial to the environment./.