Solutions to mitigate the risk of agriculture-rural loans for rural households in Viet Nam

Abstract

Recognizing the importance of the rural economy in the overall economy, the Communist Party and State of
Vietnam have promulgated a number of laws and policies that actively support agricultural and rural development,
especially the policies referring to the “New Rural Development Programme”. With its particularly important
position, the rural sector has received a lot of investment capital from the state budget, trade credit, preferential
loan, and foreign direct investment. Although significant achievements have been made in promoting the
development of agriculture and rural areas, contributing to poverty reduction as well as improving livelihoods of
farmers; rural credit (especially the households credit) still exists many obstacles and limitations. The share of
credit in rural areas remains low compared to the industry average. In addition, existing credit solutions take the
form of subsidized and temporary support, rather than sustainable promotion of rural credit growth and household
business productivity, especially of the “New Rural Development Programme”. This study introduce credit policy
orientations for rural households in the context of the “New Rural Development Programme”, then introduce
groups of solutions to mitigate the risk of agriculture-rural loans in Viet Nam.