Summary of PhD thesis: Bank credit contributes to the development of the agricultural economy in the Mekong River Delta key economic region

Researching the situation of bank credit for agricultural economy development in the MRD KER in the recent time to offer solutions about strengthening bank credit for developing the agricultural economy in the MRD KER.

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY oo0oo LE PHAN THANH HOA BANK CREDIT CONTRIBUTES TO THE DEVELOPMENT OF THE AGRICULTURAL ECONOMY IN THE MEKONG RIVER DELTA KEY ECONOMIC REGION SUMMARY OF PHD THESIS HO CHI MINH CITY – 2018 MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY oo0oo LE PHAN THANH HOA BANK CREDIT CONTRIBUTES TO THE DEVELOPMENT OF THE AGRICULTURAL ECONOMY IN THE MEKONG RIVER DELTA KEY ECONOMIC REGION SUMMARY OF PHD THESIS Major: Finance and Banking Code: 34 02 01 Science Instructor: PROF., DR NGUYEN THANH TUYEN HO CHI MINH CITY – 2018 LIST OF AUTHOR’S PUBLICATION No Contents Lê Phan Thanh Hòa (2018), Vốn tín dụng Ngân hàng Chính sách xã hội góp phần thúc đẩy chuyển dịch cấu nông nghiệp – nông thôn vùng đồng sông Cửu Long theo hướng phát triển bền vững, Tạp chí Ngân hàng, số 9, tháng 05/2018, trang 33-37 Lê Phan Thanh Hòa (2018), Vận dụng lý luận Chủ nghĩa Mác phát triển kinh tế nông nghiệp tiếp cận Vùng kinh tế trọng điểm Đồng sông Cửu Long, Kỷ yếu hội thảo khoa học Các Mác thời đại ngày Đại học Quốc gia TP HCM, Đại học Khoa học Xã hội Nhân văn, Đại học Kinh tế Luật, TP HCM, trang 236 Lê Phan Thanh Hòa, Nguyễn Văn Phận, Nguyễn Khắc Minh (2017), “Bàn vai trò tín dụng ngân hàng phát triển chuỗi giá trị nông sản Việt Nam”, Tạp chí Ngân hàng, số 5, tháng 03/2017, trang 44-48 Lê Phan Thanh Hòa, Nguyễn Đắc Hưng, Lê Phan Thanh Hiệp (2016), “Vai trò doanh nghiệp tư nhân lĩnh vực ngân hàng động lực phát triển hệ thống tài chính”, Kỷ yếu hội thảo khoa học cấp quốc gia: Văn kiện đại hội XII Đảng: Một số vấn đề lý luận thực tiễn, Phần thứ hai: Quán triệt, vận dụng quan điểm Đại hội XII vào thực tiễn Học viện Hành Quốc gia Hồ Chí Minh phối hợp với Bộ biên tập Tạp chí Cộng sản Viện Hàn lâm Khoa học Xã hội Việt Nam tổ chức, Hà Nội, trang 217-225 Lê Phan Thanh Hòa, Nguyễn Đắc Hưng (2013), “Cần tiếp tục có giải pháp đồng cho mở rộng tín dụng ngân hàng thúc đẩy phát triển bền vững kinh tế xã hội vùng đồng sông Cửu Long”, Kỷ yếu hội thảo: Hoạt động tín dụng ngân hàng thúc đẩy phát triển kinh tế - xã hội vùng đồng sông Cửu Long Ngân hàng Nhà nước Việt Nam phối hợp với Ban đạo Tây Nam Bộ Ủy ban nhân dân tỉnh Vĩnh Long tổ chức, Vĩnh Long, trang 200-213 Lê Phan Thanh Hòa, Nguyễn Đắc Hưng, Lê Phan Thanh Hiệp (2013), “Vốn tín dụng góp phần chuyển dịch cấu kinh tế vùng Đồng Sông Cửu Long”, Tạp chí Kinh tế Dự báo, số 18, tháng 09/2013, trang 19-21 Lê Phan Thanh Hòa, Nguyễn Đắc Hưng (2013), “Giải pháp mở rộng vốn tín dụng ngân hàng cho phát triển bền vững kinh tế - xã hội vùng Đồng sơng Cửu Long”, Tạp chí cộng sản, tháng 12/2013, truy cập http://www.tapchicongsan.org.vn/Home/kinh-te/2013/24831/Giai-phap-morong-von-tin-dung-ngan-hang-cho-phat-trien.aspx No Contents Lê Phan Thanh Hòa, Lê Phan Thanh Hiệp (2013), “Để phát triển thị trường trái phiếu Việt Nam”, Tạp chí Kinh tế Dự báo, số 22, tháng 11/2013, trang 2325 Lê Phan Thanh Hòa, Lê Phan Thanh Hiệp (2013), “Hoạt động M&A trình cấu lại ngân hàng thương mại”, Tạp chí Kinh tế Dự báo, số 17, trang 12-14 10 Thành viên đề tài nghiên cứu khoa học cấp trường “Nghiên cứu hành vi nhà đầu tư cá nhân thị trường chứng khốn Thành phố Hồ Chí Minh dựa vào lý thuyết tài hành vi” (2012), Trường Đại học Ngân hàng Tp.HCM, Chủ nhiệm đề tài Lê Đình Hạc 11 Thành viên đề tài nghiên cứu khoa học cấp trường“Đánh giá khả đáp ứng nhu cầu vốn ngân hàng thương mại địa bàn Thành phố Hồ Chí Minh đến năm 2020” (2011), Trường Đại học Ngân hàng Tp.HCM, Chủ nhiệm đề tài Nguyễn Thế Bính 12 Lê Phan Thanh Hòa (2011), “Nâng cao lực cạnh tranh cho doanh nghiệp nhỏ vừa khu vực Đồng sông Cửu Long hội nhập”, Kỷ yếu hội thảo: Thực trạng giải pháp nâng cao lực cạnh tranh cho doanh nghiệp nhỏ vừa địa bàn Thành phố Cần Thơ Trường Đại học Ngân hàng Tp.HCM phối hợp với UBND Thành phố Cần Thơ tổ chức, Cần Thơ, trang 122-127 13 Lê Phan Thanh Hòa, Lê Phan Thanh Hiệp (2011), “Hoàn thiện chế điều hành lãi suất ngân hàng Việt Nam”, Tạp chí Cơng nghệ Ngân hàng, số 67, tháng 10/2011, trang 39-43 14 Lê Phan Thanh Hòa, Lê Phan Thanh Hiệp (2011), “Quản lý vốn khả dụng ngân hàng thương mại Ngân hàng Nhà nước”, Tạp chí Cơng nghệ Ngân hàng, số 68, tháng 11/2011, trang 15-19 15 Lê Phan Thanh Hòa, Lê Phan Thanh Hiệp (2011), “Hoàn thiện chế điều hành lãi suất tín dụng ngân hàng nước ta giai đoạn nay”, Tạp chí Phát triển kinh tế, số 253, tháng 11/2011, trang 49-56 16 Lê Phan Thanh Hòa (2011), “Rủi ro tín dụng kinh nghiệm quốc tế quản lý rủi ro tín dụng”, Tạp chí Ngân hàng, số 9, tháng 05/2011, trang 37-41 ABSTRACT This thesis researchs about the missing of the capital for developing the agricultural economy in the Mekong River Delta (MRD) key economic region (KER) which is the urgent problem both of theory and practice nowadays The target researchs of this topic are aggregating and adding contribute to the theory on strengthening bank credit for developing the agricultural economy, proposing the effective solutions about strengthening bank credit for developing the agricultural economy in the MRD KER Qualitative research method is primary, and it combines with the descriptive statistical method which bases on the factual surveys The research result points out that bank credit for developing the agricultural economy in the MRD KER is not strong enough, not much enough, not tigh enough; it’s fragmented and lack of focus so that it can’t create a capital breakthrough for the development of agricultural economy in the KER There are many solutions, ways of providing bank credit for developing the agricultural economy but they are not completely fit in the new conditions such as, the impact of industrial revolution 4.0, new demand for agricultural products, climate change is getting deeper and deeper Therefore it requires a new approach of bank credit in developing natural, organic, ecological, and high-tech agriculture The new contributions of this thesis are: new approach of agricultural economy development and strengthening bank credit in new conditions Introducing new concepts are agricultural economys, the agricultural economy in the KER, agricultural economy bank credit, strengthening the bank credit for developing the agricultural economy, and the indicators reflect the strengthening of the bank credit, The practical contribution is introducing the new solutions such as formalizing informal credit; stopping spread loans, focusing on lending new technology agricultural economy, especially high technology; focusing on the agricultural economy loans of “the key economic infrastructure project”; focusing the totally investment capital on “the key economic infrastructure project”; establishing agricultural industrial zones; establishing public agricultural economy companies The results of this thesis can be used as a reference material for policy-makers and bankers in practice Key words: agricultural economy, bank credit, KER, the MRD, strengthen, stronger, more, tighter, credit solutions, the development of agricultural economy INTRODUCTION Scientific basis and reasons of choosing this research topic MRD has the advantage that is the large agricultural area of Vietnam Every year, the MRD produces more than 55% of paddy rice, 69% of fishery output, 70% of fruit production, contributes more than 90% of rice output, 60% of fishery export output of Vietnam On April 16, 2009, the Prime Minister issued Decision 492/QD-TTg establishing the KER of the MRD; on Feb 12, 2014, the Prime Minister issued Decision 245/QD-TTg approving the master plan for socio-economic development in the MRD KER up to 2020 with orientation to 2030; The MRD KER (hereinafter referred to as the KER or Region) will be the dynamic development zone with modern economic structure, synchronous infrastructure, contributing to building the MRD rich and strong One of the urgent issues, however, is that the Mekong Delta and the KER still face many difficulties in accessing capital, lacking capital for development, with that practice I chose the topic “Bank credit contributes to the development of the agricultural economy in the MRD KER” as a doctoral thesis in economics, this research meets the need of both theoretical and practicality Research overview and research issues 2.1 Research overview 2.1.1 The studies of foreign 2.1.2 The studies in Vietnam 2.2 Remaining gaps and research issues 2.2.1 The basic unification of previous studies 2.2.2 Remaining gaps and research issues First Remaining gaps in research: - There has been no study which have built systematically about the theory on agricultural economy development, and bank credit in the new circumstances with the influence of climate change, water scarcity, invasions salinity, landslides, the impact of new technologies, new requirements of commodity agricultural markets; - There has been no study how to make breakthrough from bank credit for contributing to agricultural economy development in the KER; - There has been no systematically in-depth study on strengthening bank credit for developing the agricultural economy in the Mekong Delta KER The remaining gaps will be continued to study with the content bank credit contributes to the development of the agricultural economy in the Mekong delta KER The title, purpose, objectives, content of the thesis are not overlap with other published topics Second Research issues: Why the agricultural economy in the Mekong Delta KER still lack of capital for development, the KER has not become driving force for economic development Therefore, researching into strengthening bank credit for agricultural economy development in the Mekong Delta KER is a new scientific issue that has the theoretical and practical meanings Research purposes, research objectives 3.1 Research purposes: Towards making bank credit becomes one of the most effective sources of capital for agricultural economy development in the MRD KER which contributes to make the KER is really the driving force for the development of the Mekong Delta and the economy 3.2 Research objectives 3.2.1 Overall objectives: Researching the situation of bank credit for agricultural economy development in the MRD KER in the recent time to offer solutions about strengthening bank credit for developing the agricultural economy in the MRD KER 3.2.2 Specific objectives: - Aggregating, and adding to contribute to clarify the theory of the agricultural economy in the KER, and the agricultural economy development in the KER; agricultural economy credit, and strengthening the bank credit for developing the agricultural economy in the KER which are used to be the theoretical basis for the research of this topic - Identifying the existing constraints, the impact factors and the specific causes that restrict bank credit for agricultural economy development in the MRD KER - Proposing the effective solutions to contribute to strengthen bank credit for developing the agricultural economy in the MRD KER up to 2025 and a vision to 2030 Research questions and research hypotheses 4.1 Research questions - Whether or not it is necessary to supplement the basic theory on the agricultural economy in the KER, the theory on strengthening bank credit for developing the agricultural economy in the KER? - Whether or not there are still certain constraints of bank credit for agricultural economy development in the MRD KER? What are the impact factors and the limited causes of strengthening bank credit for developing the agricultural economy in the MRD KER? - Whicht solutions and what to do, how to to strengthen bank credit for developing the agricultural economy in the MRD KER? 4.2 Research hypotheses - There have been major changes in production patterns, the impact of climate change, the new demand for consumption of the market and the impact of the industrial revolution 4.0 It is necessary to make additional contributions to improve the basic theory on agricultural economys, the KER, strengthening bank credit for developing the agricultural economy in the KER - In fact, there are still some certainly limitations of bank credit for developing the agricultural economy which need to be reseached to solve These restrictions are due to commercial banks themselves, customers, macro management policies and other unwanted effects Factors such as small scale production, outdated technology, unstable production, poor asset security, financial capacity, production management, knowledge of basic financial knowledge, are factors that limit access to bank credit capital of farmers in the KER - If giving the feasible solutions about enhancing internal banks and boost the power of customers, along with the effective support of macro management, strengthening bank credit for developing the agricultural economy in the MRD KER can be done Research object, research scope 5.1 Research object: Researching on strengthening bank credit for developing the agricultural economy in the MRD KER 5.2 Research scope: 5.2.1 Scope of space: Researching in the zone of the MRD KER include Kien Giang province, An Giang province, Ca Mau province, and Can Tho city 5.2.2 Scope of time: From 2011 to 2017 5.2.3 Scope of research content: This thesis only researchs bank credit of the branches of the commercial banks in the MRD KER to develope the agricultural economy of the MRD KER, the major is to mobilize the idle funds and make the agricultural economy development loans in the MRD KER Other problems which are mentioned in this thesis are served for specifying the research purposes, and the research objectives New contributions of the thesis 6.1 Theoretically: Aggregating, selecting, and adding to contribute to complete the theoretical framework on strengthening bank credit for developing the agricultural economy in the KER First build the new concepts of the agricultural economy, the agricultural economy in the KER; strengthening the bank credit for developing the agricultural economy in the KER; and the indicators reflect the strengthening of the bank credit for the agricultural economy development 6.2 Practically: - Analyzing and evaluating the current situation of agricultural economys and the situation of bank credit for developing the agricultural economy in the new conditions that are abnormal climate change, strongly developing new industry 4.0, changed demands of the market and when old solutions are no longer suitable completely for agricultural economy development in the KER; the new contributions are also points out that previous loans are lack of the necessary synchronization, spread loans without the breakthrough needed, lack of firm steps of bank credit along with other capitals for the agricultural economy development in the KER - New solutions are simultaneously concentrated loans make bank credit stronger, focus and more to meet the needs of reasonable loans Together with the concentrated investment capital for “the key economic infrastructure project” are strengthening bank credit have to create a breakthrough in lending, but at the same time, it must be closely linked with limitation of risk to ensure safety for both borrowers, banks and the society; giving the indicators evaluate the strengthening of the bank credit; for the agricultural economy development; the banking credit associated with social responsibility solution - The results of this study can be used as reference materials for related fields and as reference basis for management organizations, actual activists in planning as well as in the agricultural economy development bank activities Limitations of the thesis - Bank credit for agriculture is quite common, so it is difficult to avoid certain duplications in the data - Due to the lack of the data source and the uniformity unit, mismatched datas including statistics so that it is difficult to select the data, it has to be collate data sources to get the most reliable data - Actual survey data is chosen from a large number of random objects, so there may be restrictions on the absolute accuracy of the primary data Methodology, research methodology 8.1 Methodology: Thesis uses the materialistic methodology led in research help the research process to be reviewed, assessed in a comprehensive, specific way and developed 8.2 Research methodology: Research methodology of this thesis is mixed, but mainly qualitative research, descriptive statistical method and expert method 8.2.1 Qualitative research methodology: The thesis uses qualitative research is primarily to approach the nature of the research problem 8.2.2 Descriptive statistical methodology: First Details of the descriptive statistics research survey data: (i) The thesis has conducted field surveys with questionnaires for individuals in the field of agriculture, banking in the MRD KER (Table 0.1 Situation of collecting individual surveys for each locality in the MRD KER) The content of the questionnaire consists of two parts: part one is evaluating the degree of influence of the factors on access to bank credit capital, and part two is evaluating the degree of influence of the elements (in each of the above factors ) with access to bank credit capital for developing the agricultural economy in the KER (ii) The author conducted a survey for 28 experts, scientists through the Experimental Method Vouchers Personal questionnaires and expert questionnaires were developed in accordance with the Likert scale with five levels of impact assessment Collected data is cleaned, synthesized and processed using software such as Excel and SPSS The results from the survey will be used in the study Second Descriptive research datas: - Individual survey form: Survey on the impact of factors on access to bank credit capital for agricultural development in the MRD KER (Appendix 0.4 of the thesis) - Expert method form: Survey on the impact of limited causes and solutions on strengthening bank credit for developing the agricultural economy in the MRD KER (Appendix 0.2 of the thesis) 8.2.3 Expert research methodology 8.2.4 Other research methodologies Research data, research process, research framework 9.1 Research data: Secondary data collects from primary data and materials from the actual survey 9.2 Research process Table 0.2 Research process Step Identifying the topic, on the basis of identifying the issues to study, developing research proposals, hypothesizing and determining the preliminary answers Step Learning, examining summarily the relevant research to determine the remaining gaps in the research, establishing the basis for confirming the title and content of the research not overlap with the previous studies Step Coleecting secondary datas, design, make questionnaires and carry out actual collection surveys to collect primary datas Step Collecting and processing datas Step Selecting to build and add theories, building the research theory framework while adding, constructing, expressing some new concepts before practical changes Step Analysis, evaluation, discussion to give and confirm the results of the study Step Based on the results of the research to be discussed, solutions and recommendations for policy recommendations and practical guidance will be presented (Completion of the dissertation report to the training institution for protection) 9.3 Analysis framework in researching ANALYSIS FRAMEWORK STRENGTHENING BANK CREDIT FOR DEVELOPING THE AGRICULTURAL ECONOMY IN THE MEKONG RIVER DELTA KEY ECONOMIC REGION RESEARCH PURPOSES, RESEARCH OBJECTIVES RESEARCH METHODOLOGIES Qualitative research Descriptive statistical research Theoretical on strengthening bank credit for developing the agricultural economy in the Mekong River delta key economic region Expert research methodology The current situation of bank credit for developing the agricultural economy in the Mekong River delta key economic SYSTEM OF SOLUTIONS AND RECOMMENDATIONS - Solutions for commercial banks Solutions for customers Solutions and recommendations for macro management Chapter 1: The basic theory on strengthening bank credit for developing the agricultural economy in KER 1.1 The basic theory on agricultural economy development in the KER 1.1.1 The concerned primary theories 1.1.1.1 Concept of sustainable development The concept of sustainable development places demands on socio-economic development in general and on agricultural economy development as well as bank credit for agricultural economy development needs positive changes to implement sustainable development 1.1.1.2 The theory of absolute advantage of A Smith and the comparative advantage of D Ricardo Their theories suggests for the issue of applying to the actual selection of the region which has comparative advantages in each country to build up and develop the KER for improving the economic of the region and the economy effectively 1.1.1.3 Marxist theory of reproduction of social production The Marx theory on social reproduction indicates the need for investment to carry out agricultural economy reproduction or agricultural economy development in depth is primary 1.1.1.4 The theory of balanced development or "growth poles" by A Hirschman, F Perrons and G Pestane de Bernis Applying the theory on balanced development in development investment in small-scale agriculture to large production by focusing investment in key economic areas to create a driving force for the economy 1.1.2 Basic theory of agricultural economy development in the KER 1.1.2.1 The concept of agricultural, rural 1.1.2.2 The concept of agricultural economy Agricultural economy is an economic branch of the national economy, which refers to the activities of agricultural production, agricultural product processing and agricultural services, which are specialized in producing high quality, friendly, safe, and tied to the market based on new technology, thus creating high labor productivity and high production efficiency, meeting the high demand for socio-economic efficiency and ecological environment protection 1.1.2.3 Concept of agricultural economy development in the KER - Concept of the KER: The KER is a part of the national territory, which may include the boundaries of many provinces and cities, and the boundaries may change over time depending on the country's socio-economic development strategy The KER converges on favorable development conditions and factors with great economic potentials, acting as a driving force for the general development of the region and the whole country - Concept of agricultural economy in the KER: Agricultural economy in the KER is the agricultural economy, which has a comparative advantage over other places in high-tech agricultural commodity production, which is an important center for biotechnology transfer, breed, technical services of producing and processing hi-tech agricultural products for other regions, for the whole country and for export, and agricultural economy in the KER also makes the KER fastly become a driving force boosting other regions and the economy developing - Concept of agricultural economy development in the KER: Agricultural economy development in the KER is the development of agricultural economy based on comparative advantage, high technology, intelligent and high-level human resources, resulting in the growth in both quantity and quality of commodity agricultural products which are clean, safe, high quality yield, value and high value chain associated with the actual market, at the same time, ensure the sustainable development of the socioeconomic environment and the ecological environment, justice, form the dynamic zone boosting other regions and the country's economy developing 1.1.3 Characteristics of agricultural economy and implications for bank credit 1.1.3.1 High seasonality 1.1.3.2 Productivity is limited by biological attributes, limited quantity of products, hard to maintain, stockpiles are strongly impacted by the market 1.1.3.3 Dependent on water source, natural environment and regional nature 1.1.3.4 Land is the main means of production 1.1.3.5 From agricultural production to agricultural economy is often lack of capital 1.1.4 The role of the KER in the economy 1.1.4.1 Providing key products with high competitiveness for the economy and export 1.1.4.2 Job creation for employees 1.1.4.3 Strengthening technical infrastructure for the economy 1.1.4.4 Ship in application, disseminate science and technology to other regions 1.1.4.5 Increasing revenues for the State budget For the KER, the agricultural economy is strong, the agricultural economy of the KER serves as the basic role of agriculture but at a higher level, more focused 1.2 Overview of the theory of banking credit strengthening for agricultural economy development in the KER 1.2.1 Fundamentals of commercial bank credit 1.2.1.1 The concept of commercial bank credit Commercial bank credit is a type of credit that is either a borrowing or a property transaction in the economy between a bank transferring a certain amount of property to the borrower under the commitment of the borrower must repay both capital and interest unconditionally to the bank on the basis of the agreement of the parties through commercial banking operations 1.2.1.2 The essence of commercial bank credit The nature of bank credit is showed in the movement process of credit in the economy through three key stages: [i] the loan period [ii] using the loan and [iii] the loans and interest repayment period So the nature of bank 17 Third Agricultural economy credit structure by type of customers: Outstanding agricultural economy loans by customers at branches of commercial banks in the KER (2011 - 2017) as follows: (Figure 2.1 Agricultural economy credit loans by type of customers in branches of the MRD KER (2011 - 2017)) Applying the formula [1.9] and comparing the figures in Figure 2.1, calculate the credit outstanding proportion of each customer in total agricultural rconomy credit loans Accordingly, the credit balance of enterprises accounted for 43%, followed by individuals with the proportion of 39%, households accounted for 17%, the rest is the cooperative 2.2.5 Credit quality situation for developing agricultural economy 2.2.5.1 Agricultural economy bad credit - General agricultural economy credit bad debt: Branches of commercial banks in the MRD KER have made efforts to limit bank credit risk (see Table 2.26) Table 2.26 Bad debts of branches of commercial banks in the MRD KER (2011 - 2017) (Unit: billion) Target Total loan outstanding balance of the economy Bad debt of the economy Proportion bad debt of the economy / total loan outstanding balance of the economy (%) Agricultural economy bad debt Proportion agricultural economy bad debt / total loan outstanding balance of the economy (%) Year 2014 2011 2012 2013 2015 2016 119,001 3,527 129,231 4,558 142,584 3,702 157,313 6,458 171,513 7,124 193,066 6,479 2017 217,078 6,298 2.96 3.53 2.60 4.11 4.15 3.36 2.90 884 1,331 1,315 1,553 1,462 1,444 1,643 0.74 1.03 0.92 0.99 0.85 0.75 0.76 Source: Synthesis Report of the provincial branches of the SBV Using the formula [1.10] and based on the data in table 2.26, we calculate the bad debt ratio of the economy and the agricultural economy bad debt ratio in total outstanding loans of the economy from 2012 to 2017 respectively: 2012, 2013, 2014, 2015, 2016 is 3.53%; 2.60%; 4.11%; 4.15%; and 3.36% Total bad debts of commercial banks in the region increased sharply and exceeded the permitted level of the SBV (less than 3%) in 2012, 2014, 2015 and 2016 due to the credit of seafood processing enterprises in Ca Mau province Bad debt ratio of commercial banks in Ca Mau is very high, the average period of 2011-2017 is 6.46%, due to risks from fisheries companies in recent years such as Binh An, Song Hau , Phuong Nam, and other businesses investing in real estate However, if considering and assessing the bad debt rate of agricultural economy in total outstanding loans of the economy, another reality is low debt, the average period of 20112017 is around 0.86% , accounting for about 25% of the total bad debt of the economy Bad debt of agricultural economy accounts for a small proportion compared to other sectors, in 2011, the highest bad debt of agricultural economy in the last years were only 1.03%, it was noted that efforts to control the agricultural economy credit quality of branches of branches of commercial banks in the region - Agricultural economy bad debt by internal agricultural economy and by customer: In order to further assess the quality of agricultural economy credit, we consider agricultural economy sector bad debts classified by internal agricultural economy and customers of branches of commercial banks in the KER from 2011 to 2017 (see Table 2.27) From Table 2.27 shows that the agricultural economy sector bad debt is mainly concentrated in agricultural production with an average of 39% of total agricultural economy bad debt in 2011-2017, next is bad debt in industry, processing and consumption of agricultural product sector with the average proportion of 33% and the rest is other sectors in agricultural economy According to customers, the bad debt of agricultural economy is concentrated mainly in corporate customers with an average proportion of bad debts in 2011-2017 period is 47%, individual customers with the proportion of 34%, bad debt of the household accounts for 19% It is possible to recognize that part of the reason for bad 18 debt in agricultural production is that it is directly affected by weather, climate and the risks of natural disasters, and the impact of the market, an important part is due to backward technology and limited management, low labor productivity Therefore, it is necessary to have a practical plan to limit the bank credit risk to develop agriculture economy in the KER Table 2.27 Agricultural economy bad debts classified according to internal agricultural economys and classified by customers at branches of commercial banks in the KER (2011 - 2017) (Unit: billion) Target 2011 2012 884 1,331 Agricultural economy bad debt In which Agricultural economy bad debt by internal agricultural economy 2.1 Agricultural production 354 519 Proportion (%) 40.05 38.99 2.2 Industry, processing services, consumption of 272 429 agricultural products Proportion (%) 30.77 32.23 2.3 Development of agricultural infrastructure 13 14 Proportion (%) 1.47 1.05 2.4 Others 245 369 Proportion (%) 27.71 27.72 Agricultural economy bad debt by customers 3.1 Individual 294 401 Proportion (%) 33.26 30.13 3.2 Household 186 324 Proportion (%) 21.04 24.34 3.3 Owner of the farms 0 Proportion (%) 3.4 Co-operative 0 Proportion (%) 3.5 Enterprises 404 606 Proportion (%) 45.70 45.53 2013 1,315 Year 2014 1,553 2015 1,462 2016 1,444 2017 1,643 527 40.08 635 40.89 518 35.43 555 38.43 521 31.71 355 482 537 547 791 27.00 21 1.60 412 31.33 31.04 23 1.48 413 26.59 36.73 33 2.26 374 25.58 37.85 28 1.97 314 21.75 48.14 0.55 322 19.60 353 26.84 400 30.42 0 562 42.74 428 27.56 427 27.50 0 698 44.95 611 41.79 84 5.75 0 767 52.46 615 42.57 97 6.75 0 732 50.68 661 40.23 87 5.30 0 895 54.47 Source: Synthesis Report of the provincial branches of the SBV 2.2.5.2 Agricultural economy debt collection coefficient indicator Agricultural economy debt collection coefficient indicator of branches of commercial banks in the region from 2011 to 2017 (Table 2.28 Agricultural economy debt collection coefficient indicator of branches of commercial banks in the MRD KER (2011 - 2017)) Applying the formula [1.11] and data from Table 2.28, we have the agricultural economy debt collection coefficient indicator in 2011 of the branches of commercial banks in the KER is 95.80%; 93.57% in 2014; in 2017 is 89.42%; the average debt collection ratio for 2011-2017 is 90%, which means that total debt collection is less than total lending, which suggests that the bank is focused on developing agricultural credit loans, as a result, lending has increased over the years The problem is that banks should pay attention to after-lending, urge to ensure timely repayment, limiting delayed repayment, overdue debt to improve the quality of agricultural economy credit The issue of setting up banks should focus on after-lending control, urging to ensure timely collection of debts, limiting delinquency, overdue debt, and improving the quality of agricultural credit 2.2.5.3 Agricultural economy turnover indicator In recent years (from 2011 to 2017), branches of commercial banks in the MRD KER have made great efforts in speeding up the credit flow (Table 2.29 Agricultural economy turnover indicator of branches of commercial banks in the KER (2011 - 2017)) Using the formula [1.12] and the data from Table 2.29 we have the agricultural economy turnover indicator in 2012 of 1.41 laps; 2014 is 1.21 laps; 2011 is 1.01 laps, the average turnover indicator for the period 2011- 19 2017 is 1.21 laps (about 296 days) Interestingly, agricultural economy turnover indicator in the region is erratic and slowing down and in 2017 it is only 1.01 laps per year The average loan term of agricultural economy credit for 9-10 months is relatively suitable for the agricultural production cycle 2.3 Achievement, limitations and causes of limitations of commercial bank credit for agricultural economy development in the KER (2011 - 2017) 2.3.1 Major achievements of commercial bank credit for agricultural economy development in KER 2.3.1.1 Contribute to increase productivity, value, output of agricultural products for the domestic market and export Bank credit of branches of commercial banks has had a positive impact on the agricultural economy of the KER in the recent period (2011 - 2017) (See Table 2.30) Table 2.30 The relationship between agricultural economy credit outstanding and agricultural production value of the MRD KER (2011 - 2017) (Unit: billion) Content Total agricultural economy loan outstanding balance Growth rate of agricultural economy loan outstanding balance (%) Agricultural production value Growth rate of agricultural production value (%) 2011 2012 2013 49,873 54,084 61,888 5.90 8.44 120,563 1.83 123,155 2.15 Year 2014 2015 2016 2017 67,279 82,997 97,228 109,538 14.43 8.71 23.36 17.15 12.66 126,665 2.85 129,743 2.43 134,180 3.42 138,125 2.94 142,117 2.89 Source: General data from the General Statistics Office at provinces and city, and Report of the provincial branches of the SBV From Table 2.30, the agricultural economy loan outstanding balance of branches of commercial banks in the region and the value of agricultural production in the period 2011-2017 generally increased; the average growth rate of agricultural economy loan outstanding balance in 2011-2017 is 1%, which makes the agricultural production value of the same period increase by 0.2%; the average agricultural economy credit growth of 13% per year has contributed to increase the value of agricultural production 2.6% This fact shows that the agricultural economy of the region as well as of the MRD is still largely broad-based and has come to its limits As a result, the bank credit strengthening should be paid attention to invest for the development of the agricultural economy in depth 2.3.1.2 Other achievements: From 2011 to 2017, bank credit not only contributed to the development of the agricultural economy in the region, but also contributed to the following areas: contributing to the provision of more inputs to the non-agricultural sector; contributing to boosting the consumption of non-agricultural products; contributing to the restructuring of the economy, labor structure and product structure; contributing to increase the income of laborers; contributing to poverty reduction (the rate of poor households in the region in 2011 is 8.06%, at the end of 2017 about 6.2%) 2.3.2 Limitations and the problems facing agricultural economy credit in the KER 2.3.2.1 Limitations from banks: - First, the loan source is limited Second, limited human resources Third, restrictions on lending and restrictions on the use of interest rates - Fourth, restrictions on the implementation of restrictions on lending risks - Fifth, restrictions on customer strategy plan - Sixth, restricted by procedures, records, credit procedures and restrictions on the activities of inspection and control of banking operations - Seventh, restrictions on dealing with bad debts, handling collateral assets 2.3.2.2 Limitations from customers: - First,limited human resources,financial capacity,production model Second, limitations on the application of science, technology - Third, limitations on linking production with processing industry and markets 20 2.3.2.3 Limitations from macro management [i] For the leaders of the MRD KER - First, fully and comprehensively aware of the impacts of climate change on the MRD in general and in the KER in particular is not timley - Second, the link between the provinces in the region together with the provinces in the MRD is also formal, lacking close links necessary - Third, there has not been a common plan to concentrate resources on the implementation of the key works of the KER [ii] For macro management in general - First Limited by the strategy of agricultural economy human resources development - Second Limited in economic restructuring and associated with the MRD - Third Restrictions on investment in economic infrastructure are spread out - Fourth Limitations in research and application of new technologies to develop hi-tech agricultural economy - Fifth Restrictions on mobilizing total resources for agricultural economy development - Sixth There is no really main force bank lending for the development of agricultural economy - Seventh No agricultural industrial zones have been established - Eighth The KER and the MRD lack a direct co-ordinating organization - Ninth Restrictions due to policy, macro management mechanism for agricultural economy has not really come into life [iii] Some key limitations from the SBV: Systematic in banking operations is still limited, not connected to each other; weak due to lack of system synchronization and exploitation of information technology; lack of uniformity, confidentiality and safety are low, backward technology 2.3.3 Limitation causes of strengthening bank credit for agricultural economy development in the MRD KER 2.3.3.1 Limitation causes from the commercial banks themselves - First, due to the lack of plans to implement the strategy of improving capital mobilization and linking capital mobilization: due to the bank's capital mobilization plan is not closely linked to reality, not linked to each other, Mobilization is not linked to loans to nourish capital - Second, the reason for this is due to the lack of a strategic implementation plan for human resource development: In fact, branches of commercial banks in the KER lack a realistic plan to implement the strategy of building and developing human resources with high professionalism - Third, limitation causes on lending and using the interest rate tools: Lending spreads out, almost "dividends" for small agricultural producers, is less focused on lending to create breakthrough development - Fourth, limitation causes on limiting loan risk: The implementation of credit procedures, inspection and control is not very thorough, timely to slow the detection of risk signs - Fifth, limitation causes on implementing customer strategy: In general, the banks lack the plan to optimize the customer strategy - Sixth, limitation causes on the procedures, documents, credit procedures and restrictions in banking inspection and control: Loan procedures in the KER of the MRD, although many improvements have been made, however it still seriously "protect" lender so there is some lack of necessary suitability Procedures, records are still cumbersome, heavily legal elements - Seventh, limitation causes on dealing with overdue debts, handling collateral assets: Collateral assets of farmers is usually land, valuation is two to three times lower than the market price, so when risk happens, the return of capital is difficult 2.3.3.2 Limitation causes from customers - First This is due to the quality of human resources, financial capacity and inadequacy of the production model - Second Weakness cause in the application of science, technology - Third Cause on lack of linking agricultural production with processing industry and market 21 2.3.3.3 Limitation causes from macro management [i] For the leaders of the MRD KERs - First Awareness about climate change: It can be said that leaders of the provinces, city in the KER in the early years have been somewhat passive in the recognition and acceptance of the impact of climate change occurs quite quickly and irregularities in the MRD in general and in the KER in particular Therefore, it is not timely to plan for such changes - Second Lack of real bonding in domain links, subregions - Third Lack of general plan implementation principle: the provinces have not thoroughly centralized resources to implement uniformity to ensure consistency and efficiency [ii] For macro management in general - First, the lack of a strategy as well as practical and effective plans of human resource development for agricultural economy Second, the agricultural economy restructuring of the KER remains problem - Third, limitation cause due to investment in economic infrastructure spread, lack of breakthrough necessary Fourth, the research and application of new technologies for agricultural hi-tech agriculture has not been paid much attention - Fifth, due to lack of methods to mobilize total financial resources to develop agricultural economy in the KER - Sixth, due to the lack of a really main force bank for agricultural development loans, Agribank in Vietnam is considered as a bank providing loans for agriculture and rural development, however, due to lack of suitable mechanism, Aribank also operates as a general trading company so it can not focus on playing a real role as a specialized bank for agricultural and rural loans Seventh, have not set up agricultural industrial zones: In the MRD almost every province has an industrial park, but in the field of agriculture, there is no real zone means the agricultural area has the stature like the whole industrial zone - Eighth, the lack of a direct co-ordination which has effect for both of the KER and the MRD - Ninth, the limitation cause is due to the policy of agricultural economy development is lack of synchronism and not really come into life [iii] For the SBV The SBV has two outstanding obstacles are: the lack of consistency in the operation of banking, and the lack of consistency in the sustainability operation linkages and the lack of synchronization and exploitation of information technology in banking operations, which are the causes that should soon be overcome Conclusion Chapter In this chapter, the thesis presents the general status of the KER in terms of economic characteristics, economic structure, population structure, human resources, per capita income, urbanization, the situation of surveying socio-economic factors affecting bank credit, achievements, limitations and limitation causes for agricultural economy development in the KER in recent years The thesis analyzes the contents of capital mobilization and use of capital for agricultural economy development in terms of term, economic composition, the impact of credit on internal agricultural economy and pointing out the issues that need attention for the credit of agricultural economy development in the KER in the last time Based on that, the thesis shows the achievements, limitations and causes of limitations of bank credit for agricultural economy development in the KER include: [i] Group of limitations and causes of limitations from commercial banks themselves: limitations and causes of limitations on capital, human resources development, conceptions, lending modalities and the usage of interest rate tools, limiting lending risk, customer strategy implementation plan, process, loan application procedures and inspection and control activities, dealing with bad debts and collateral assets of comercial banks in the KER [ii] Group of limitations and causes of limitations from customers: The weakness of human resources, financial capacity and production and business organizational for high-tech agricultural economy development in the KER [iii] Group of 22 limitations and causes of limitations from macro management include local, central and bank: lack of implementation plan for human resource development, agricultural economy restructuring , lack of general administration, investment in economic infrastructure, research and application of new science and technology, mobilization of financial resources, policy and mechanism have not come to real life, not ensuring the systematic in banking operations, the lack of synchronism in the exploitation of information technology in banking activities Together with the results of the study of Chapter 1, the results of the study of Chapter are the main basis for the thesis to propose solutions to strengthen bank credit for agricultural economy development in the KER of the MRD which are presented in Chapter Chapter 3: Solutions and recommendations for strengthening bank credit for agricultural economy development in the MRD KER to 2025 and vision to 2030 3.1 Opinion, orientations and main targets for the agricultural economy development of the MRD KER up to 2025 with a vision to 2030 3.1.1 The basic about the MRD development strategy Recognizing the dominance, potentiality, role, location and practical issues of the MRD, the Government has developed many socio-economic development policies for the MRD On January 15, 2018, the Prime Minister issued Decision No 68/QD-TTg approving the adjustment of construction planning of the MRD up to 2030 and vision to 2050 The conference on the MRD sustainable development in response to climate change on September 26-27, 2017 in Can Tho, the Prime Minister mentioned: changing development thinking, moving from pure agricultural thinking to agricultural economys, from quantity to quality linked to the value chain; from chemical agricultural production to organic and high technology agriculture To attach importance to processing industry and supporting industries in association with the development of agricultural economy The Government has issued Resolution 120/NQ-CP dated November 17, 2017 on the MRD sustainable development adaptation to climate change 3.1.2 Opinion for strengthening credit bank for developing the agricuture and the agricultural economy of the MRD 3.1.2.1 Orientation leader opinion of the Party The twelfth Congress of the Party has pointed out the direction and task of developing agriculture and rural economy as "Building an agriculture towards large commodity production, applying high technology, improving product quality, food safety and hygenic; increasing value- added, boosting export" 3.1.2.2 Opinion of the banking sector The banking sector also showed clearly focus on strengthening the credit bank capital for agricultural development with the idea of not allowing farmers to lack capital On April 24, 2017, the SBV issued Decision No 813/QD-NHNN on the program of lending to encourage the development of high technology agriculture, clean agriculture and plans to increase investment capital for agriculture, rural 3.1.2.3 Building the opinion of strengthening bank credit for the development of agriculture and the agricultural economy in the MRD Fundamentally changing the perception of the agricultural economy with the agriculture, changing the lending from loans spread out, dispersed for small agricultural production to centralized lending to meet the capital demand for modern agricultural economy, high technology agriculture Accordingly, it is necessary to increase the bank's capital so as to fully and promptly meet the loan demand of agricultural economic subjects in terms of quantity and number of loans; ensuring the safety and effectiveness of credit 23 3.1.3 Orientations and main targets for the development of the MRD KER up to 2020 with a vision to 2030 3.1.3.1 Orientations for the development of the MRD KER up to 2020 with a vision to 2030 Building the KER become a dynamic development area with modern economic structure contributing to the whole country and contributing significantly to the construction of the MRD rich and powerful 3.1.3.2 Main targets for the development of the MRD KER up to 2020 with a vision to 2030 (See table 3.1) Table 3.1 The development objective of the MRD KER up to 2020 with a vision to 2030 No Target Growth rate of gross domestic product (GDP) (% / year) The economic structure (%): - Agriculture forestry seafood - Industry - Construction - Service Per capita GDP (USD) Export value (billion USD) Budget mobilization rate from GDP (%) Gross output of paddy (million tons) Aquaculture production (thousand tons) Share of non-agricultural sector in economic structure (%) 2015 11 Time come 2020 2030 (Ước tính) 10.5 23.1 33.3 43.6 2,470 5.6 9.5 - 10 2,030 17.3 37.4 45.3 4,400 10.3 10 - 11 10.2 2,420 14 39 47 9,300 90 Source: Ministry of Planning and Investment From Table 3.1, the average GDP growth rate (2015-2020) was 10.5%; Per capita GDP will reach USD 4,400 by 2020; by 2020, the agro-forestry-fisheries sector will decrease to about 17.3%; industry construction 37.4%; service sector accounts for 45.3%; export value is about $ 10.3 billion; the percentage of trained workers is about 65% 3.1.4 Orientation to increase credit capital for rural and agricultural development of the banking 3.1.4.1 Capital requirements for agricultural economy development in the KER of the MRD Estimating the average capital requirements for agricultural economy production in KER (See Table 3.2) Table 3.2: Estimating the capital requirements for cultivation and husbandry for one crop of the MRD KER Target Paddy Water surface for aquaculture Vegetable Fruit tree Target Amount (thousand ha) 1,795 456 70 144.94 Amount (thousand units) 13,406 9.60 110.60 715.80 Production expense (VND million / 1000 ha) 3,000 200,000 20 150,000 Production expense (VND million / 1000units) 85 10,000 10,000 3,800 Poultry farming Buffalo farming Cattle raising Raise pig Total capital requirements Agricultural economy credit outstanding balance Agricultural economy credit outstanding balance / Capital requirements (%) Capital requirements (million VND) 5,385,000 91,200,000 1,400 21,741,000 Capital requirements (million VND) 1,139,510 96,000 1,106,000 2,720,040 123,388,950 97,228,000 78.80 Source: Estimated based on actual production cost data of provinces in the KER by 2017 Table 3.2 shows the cost of production capital for each crop or batch of livestock in the provinces of the KER is about over 123 thousand billion VND (123,388,950 million VND) Meanwhile, the agricultural economy credit outstanding balance of the region was over 97 thousand billion dong (97,228,000 trillion dong), the Agricultural economy credit outstanding balance / Capital requirements was 78.80 percent, the capital shortfall was about 26,000 thousand billion VND (VND26,160,950 million VND), respectively of 21.20% This estimate is consistent with the reports of the provinces and the Steering Committee of the South West region on bank credit, which only meets 70% to 80% of the loan demand The issue should have the connection and high concentration of capital to create synchronism in investment agricultural economy development in the KER in depth 24 3.1.4.2 Orientations and major targets of the banking sector on strengthening bank credit for agricultural economy development [i] Orientation: Implementation of the policy of agricultural development, new rural construction of the Government, from 2017 SBV has Decision 813/QD-NHNN dated April 24, 2017 on the program of lending to encourage high technology agriculture, clean agriculture development and plans to increase investment capital for agriculture and rural areas Accordingly, implementing synchronously the solutions on boosting the mobilized capital at the local in combination with the reconcilecapital to meet in time the capital needs for developing the agricultural economy, continue to increase agricultural credit, raise proportion of medium and long-term loans by average growth rate; simplify loan procedures so that farmers can easily access credit capital of commercial banks [ii] Targets: The key tasks of the banking sector in the KER in the period from now to 2025 with a vision to 2030 are as follows: [i] Strive to raise the capital mobilization rate in 2018-2025 at an average of 15% of the year, 2017 reached 176,949 billion VND, estimated by 2025 total mobilized capital reached 541 billion VND; [ii] Strive to bring the outstanding credit growth rate in 2018-2025 at 10% per year, 2017 at 217.078 billion VND, estimated that by 2025, the outstanding loan balance will reach 465 billion VND; [iii] Strive to mobilize medium and long term capital accounting for 30% of total mobilized capital and outstanding medium and long term loans account for more than 30% of total outstanding loans in the region 3.2 Solutions to strengthen bank credit for agricultural economy development in the KER until 2025 and vision to 2030 3.2.1 Group of solutions for commercial banks 3.2.1.1 Solutions to strengthen to improve the capital mobilization and capital mobilization linkage In order to increase the capital mobilization, the branches of commercial banks in the KER should focus on the following issues: Building plans to expand capital mobilization through diversified forms of mobilization such as diversifying customers, implementing banking services such as payment, collection, payment, card, international payment and foreign currency trading, etc Branches of banks in the KER need to link in mobilizing capital to avoid competing deposit interest rates lead to the depositor withdraw money from banks to deposit other banks to incur additional costs and cause fluctuations in mobilized capital 3.2.1.2 Solutions to complete the implementation plan of the human resource improvement strategy adapting to new banking activities Branches of the banks need to have human resource development plan, specifically: First Strengthening self-training; Second Associating in training, intensive training; Third Strengthening professional activities; Fourth Strengthening to training skills, meet integration; Fifth Using collaborators; Sixth Strengthening the autonomy of branches of commercial banks in training, fostering and using their human resources; Seventh Caring of the staffs’lives 3.2.1.3 Strengthening to lend under the program, projects, key infrastructure lines for high technology agricultural economy development in combination with flexible interest rates Implementing this solution should pay attention to the following key issues: First Concentrating investment capital on "key infrastructure chains"; Second Bank credit focuses on agricultural economy loans for new technology and key products; Third Expanding the form of lending through new type of cooperatives; Fourth Centralized lending, minimizing loan spread; Fifth Using flexible interest rate tools 3.2.1.4 Limiting the risks of strengthening credit bank for agricultural economy development in the KER First Strengthening risk management for loans; Second Strengthening bank credit risk management in the new condition, here is the impact of climate change, changing the demand of human’s consumption of 25 agricultural products, agricultural economy changed from small back to high-tech agricultural economy 3.2.1.5 Completing the customer strategy implementation plan in accordance with the actual situation First Customer policy by customer classification: - Customer policy for customers in the key investment chain; - Customer policy for customers who are new type of cooperative; - Customer policy for household economy clients (households have with limited financial capacity, households with weak financial capacity) Second Building customer database Third Completing customer care plan 3.2.1.6 Simplifying procedures, documents and credit procedures associated with strengthening inspection and control of banking activities First Simplifying the process, records and procedures: - Simplifying loan book; - Flexible procedures committed in the loan file; - Flexible in the implementation of the loan process Second Strengthening inspection and control; attaching importance to building a contingent of professional internal auditors, having responsibility and having professional ethics 3.2.1.7 Improving the ability to handle overdue debt and collateral assets First Developing a plan to handle overdue debt; Second Working out specific plans on handling over-due debts; Third Developing debt processing procedures clearly; Fourth Preventing bad debt become more badly; Fifth Convincing customers to buy insurance for collateral assets 3.2.2 Group of solutions for customers to create a solid basis to strengthen bank credit for agricultural economy development in the KER 3.2.2.1 Improving the level of human resources, financial capacity and organizational model of production and business for the hi-tech agriculture economic development - First Strengthening managerial human resource for agricultural economy: Consider managerial human resource as the core force implementing the process from small agricultural production to high tech agricultural economy Can Tho University should be assigned to be the focal point for training organizations, train the managerial agricultural economy staff of the KER and the MRD - Second Improving the quality of human resources for high-tech agricultural economy: Laborers in the high-tech agricultural economy are required more skill but not much in terms of quantity Therefore, it is necessary to have training programs on the contents related to labor activities in high-tech agricultural economy and to enhance vocational training for laborers in agricultural economy - Third Establishing new type of cooperatives: Agricultural economy in the KER should be reorganized in the direction of forming new cooperatives in order to concentrate resources to improve management and financial capacity, because small producers can not develop large modern agriculture Such organized production will be able to sustainably grow and enhance the bank's ability to borrow capital to improve its financial capacity - Four Establishing an agricultural economy joint stock company: On the trend of agricultural economy in the KER, there should be invested in order to establish an agricultural economy joint stock company by transferring the new kind of cooperative to shareholding company and established new agricultural economy joint stock company Agricultural economy joint stock company in the key economy region can step by step become a listed company as an opportunity to improve management capacity and financial capacity Agricultural economy corporations are form of highly practical socialization in the field of agricultural economic - Fifth Establishing hi-tech agricultural industrial zones: In order to strengthen the management and financial capacity of customers in the field of agricultural economics, it is necessary to establish hi-tech agricultural industrial zones This is the basis for building high-tech agricultural production with the participation of enterprises 26 3.2.2.2 Increasing investment in synchronous technologies and techniques in order to raise the productivity, quality and competitiveness of agricultural products It is necessary to increase investment along the direction of synchronous technologies and new techniques to raise productivity, quality, competitiveness, high value product chains and high economic efficiency In order to ensure synchronism and improve management capacity, it is necessary to study GPS applications in high-tech agricultural economy 3.2.2.3 Combining high-tech agricultural economy production with agricultural product processing and markets - First The real link between raw material production and agricultural product processing - Second Marketrelated production: Real market principles need to be implemented To produce the agricultural economy associated with the market needs to segment the market, where high demand market, fastidious, middle market type, market type is not high, on the basis of signing trade contracts to produce Attention should be paid to exploiting markets with high interdependence to negotiate cross-product export It also takes into opportunity market based on the adventure production of one or several commodity agricultural products 3.3 Recommendations for macro management to ensure for strengthening bank credit for agricultural economy development in the KER 3.3.1 For leaders of the KER 3.3.1.1 Raise awareness deeply of climate change Be proactive in raising awareness deeply of climate change, actively adapt to living with climate change Leaders of the provinces in the KER are the "basic elements" with the people "creating" the mode of coexistence with climate change 3.3.1.2 Strengthening of intra-regional and inter-regional connectivity There needs to be a more effective mechanism for linking and attaching importance to the benefits of each province in the KER to the overall interests of the region, inter-region and national as well as regional interests in the Mekong region 3.3.1.3 Agreeing a principal common implementation plan to ensure the sustainable development linkage There should be a high level of synergy among the provinces in order to concentrate resources on implementing the plan coordinated and effectively 3.3.2 For macro management in general 3.3.2.1 Strengthening human resource development for agricultural economy in the KER is the basis for strengthening bank credit It is necessary to have professional training programs, transfer occupational knowledge and skills for rural laborers according to the development needs of economic sectors, while attaching importance to training and industry vocation It helps them to moving to non-agricultural labor in line with economic structure restructuring and high technology application 3.3.2.2 Focusing on restructuring agricultural economy in the KER always associated with the MRD as a basis for strengthening bank credit In order to successfully implement the restructuring of the agricultural economy, the MRD KER should focus on the following issues: - First Restructuring the agricultural economy on the basis of natural conditions: Restructuring of agricultural economy in the KER must be based on the comparative advantages of natural conditions and in the whole of the MRD - Second Restructuring the agricultural economy on the basis of comparative advantage: Transforming the structure of agricultural economy should focus on practicality, but it should be linked with practicality with advantages as one of the principles to be complied with - Third Restructuring 27 of agricultural economy in the KER needs to attach importance to the steady systematic linkage of the MRD: Restructuring of agricultural economy in the KER should be closely linked to the whole of the MRD, promoting the transition to a model of high-tech agricultural economy - Fourth The State needs to ensure the sustainability of economic structure restructuring, labor structure and product structure The State plans and organizes to implement strategies, planning, policies, development plans, building and perfecting the system of infrastructure in service of economic restructuring and rural agricultural labor structure; bringing scientific and technological advances into production to ensure the sustainability of the product structure, solving social insurance issues to ensure the sustainable agricultural economy development 3.3.2.3 Attaching importance to investing in economic infrastructure along with the chain of key works to create a strong driving force - First To attach importance to intra-regional and inter-regional investment: To review and complete the planning on investment in economic development of the KER on the basis of inter-regional investment in order to overcome the division and overlap took place in the past It is necessary to create mechanisms and policies to attract domestic and foreign resources to invest in developing the agricultural economy in the KER - Second Investing in key infrastructure chains to create breakthroughs in development: In total infrastructure investment, the investment need to focus to promote the advantage of creating momentum for development in the long run Therefore, it is necessary to have a breakthrough investment, which can be called a "key infrastructure chains" investment to create linkage between production and consumption of agricultural products 3.3.2.4 Intensifying the research and application of new science and technology for development of hitech agricultural economy - First Intensifying scientific research towards formulating new thinking for developing agricultural economy with new technologies in adaptation to climate change: To intensify scientific research towards the formation of new thinking of new technology agricultural economy development in adaptation to climate change It is important to consider floods, droughts, salt water and brackish water as a resource to actively exploit and bring about the inherent economic benefits - Second To intensify the research into application of new technologies in irrigation and water resource protection: To build multi-purpose irrigation systems, salinity control, water regulation, sweetened water, supply water to overcome the water scarcity, meet the requirements of agricultural production, aquaculture, - Third To intensify new technologies in combination with natural economic forest development tradition, thus contributing to the erosion of coastal and river banks: To promote scientific research and application of new technologies in overcoming this negative violations It is necessary to have the attention of the Government, the ministries, branches to provide capital, technology and technical support for the implementation of embankment construction projects, the planting of coastal and river protection forests 3.3.2.5 Mobilizing the entire financial resources for the development of agricultural economy in the MRD KER - First Raising the role of state budget: Investing in the development of hi-tech agricultural economy requires high capital Therefore, it is necessary to have solutions to mobilize total domestic and foreign capital sources for agricultural economy development in the KER State budget capital plays the role of "bait capital", which is the counterpart fund to attract other sources of capital - Second Regularizing the supply of informal funds: The state needs to legalize and recognize informal credit for management according to law Recognition of this type of credit gives farmers more capital channels This capital will integrate to support for small-scale agriculture, while the source of bank credit is focused on giving priority to develope high-tech agricultural economy - Third Microfinance Development: A legal framework for the 28 development of microfinance institutions, enabling microfinance institutions to operate safely and sustainably - Fourth Issuance of corporate bonds: Issuance of bonds will be an opportunity for agricultural enterprises to invest in the development of high-tech agriculture, interest rates may be at an average higher than the commercial bank deposit rate from 1% to 1.5% in the same period 3.3.2.6 Set up a mechanism for Agribank to make loans for agricultural economy Agribank can be selected and further strengthened as a major bank for agricultural and rural loans To implement this solution, it is necessary to soon complete the mechanism and policy to concentrate capital from commercial banks in order to increase capital for Agribank as the countries have done 3.3.2.7 Establishment of agricultural industrial zones To develop the agricultural economy firstly in the key economic zone, it is necessary to set up agricultural industrial zones, including the rural joint-stock enterprises with the stature in the domestic and foreign markets, contributing to solve the problem of ensuring that the peasants have jobs, earn incomes, have houses, study, vocational training, receive medical care, health, enjoy clean water and gradually increase their life values 3.3.2.8 Establishment of the MRD Development Board The MRD KER should have a unified commander who is strong enough to have a decisive voice in development The Mekong River Development Board should be established under direct guidance of the Prime Minister This Board has enough power to direct, administer and allocate resources for the development of the MRD as planned upon the decision of the Prime Minister 3.3.2.9.Focusing on policy, macro management mechanism for agricultural economy really come into life The policy situation has not yet come into real life such as land policy, land limit, financial policy, currency, credit, economic structure restructuring policy, human resource development policy, science and technology policy, So sometimes the bank said overcapitalised but farmers said not to borrow capital; the problem of agricultural mechanization is very slow and even one-sided 3.3.3 Some recommendations to the SBV 3.3.3.1 Paying attention to improve the system in banking operations In order to improve the banking system in the KER, banks should link credit information, customer information, risk information, and training links to foster human resources, linking in mobilization and lending in line with the characteristics of agricultural economy is turning to high technology 3.3.3.2 Focusing on synchronization and improve the ability to exploit to optimize the information technology system No one, only the SBV guide directly can synchronize the information technology system in banking operations 3.3.4 Other recommendations 3.3.4.1 Active living with climate change to enhance the ability to increase social and economic benefits The effects of climate change are increasingly complex and unpredictable with many serious implications for the agricultural economy, it is necessary to have quick solutions to adapt the "prosperous" view to actively living "peacefully" with climate change in order to improve the ability to increase socio-economic benefits It should be highly consistent with the view not to trade the environment for economic development of the Government of Vietnam 3.3.4.2 Strengthening the application of solutions to ensure the ecological environment Agricultural economy needs to apply high technology to improve productivity, quality and efficiency with less use of resources and at the same time contribute to minimize negative impacts on the environment 29 3.3.4.3 Strengthening the initiative to improve competitiveness in the agricultural economy sector Boosting the production of natural agriculture, ecological agriculture and high-tech agriculture with high market value Conclusion Chapter Chapter focuses on solutions and recommendations to strengthen credit bank for the agricultural economy development in the MRD KER to 2025 and vision to 2030 First of all is the solution group for commercial banks, including solutions: improving the mobilization and the capital mobilization linkage; perfecting the implementation plan of the human resource development strategy in line with the new period banking activity; strengthening lending under key programs, projects, key infrastructure chains coupled with flexible interest rates; limiting the risks of bank credit strengthening for agricultural economy development in the KER; perfecting the implementation plan of customer strategy in accordance with the actual situation; simplifying the process, documents, credit procedures associated with intensifying activities of inspecting and supervising banking operations; improve the ability to handle overdue debt, collateral assets The thesis offers solutions to customers in order to create a solid foundation for strengthening bank credit for the agricultural economy development in the KER: solutions to raise the level of human resources, financial capability and the model of production and business organization for development of hi-tech agricultural economy; increasing investment in synchronous new technologies and techniques in order to raise the productivity, quality and competitiveness of agricultural products; combining closely hi-tech agricultural economy production with agricultural product processing and markets Recommendations the thesis given for macro management to ensure strengthening bank credit for agricultural economy development in the KER, including: solutions for local governments in the KER; solutions for macro management in general such as strengthening human resource development for agricultural economy in KER; attaching importance to the restructuring of agricultural economy in the KER, which is always associated with the MRD; restructuring the agricultural economy on the basis of the fact of natural conditions; restructuring the agricultural economy on the basis of comparative advantages; restructuring the agricultural economy in the KER should respect the sustainable linkage of the MRD system; ensuring the sustainability of economic structure restructuring, labor structure and product structure; attaching importance to the investment in the economic infrastructure under the chain of key works to create a strong driving force; intensifying the research and application of new science and technology to develop hi-tech agricultural economy; intensifying the application of new technologies in combination with the natural economic forest development tradition against coastal erosion and river bank erosion; mobilizing all financial sources for development of agricultural economy in the KER; selecting and strengthening the position of Agribank as the main bank for agricultural and rural development loans; establishing the Mekong Delta Development Steering Committee; establishing agricultural industrial zone, establishing agricultural joint stock enterprises; some recommendations to the SBV of Viet Nam for focusing on improving the systematic in banking operations and focusing on synchronizing and strengthening the ability to make optimal use of the information technology system and other recommendations as living with climate change; ensuring the ecological environment; improving the competitiveness of agricultural products CONCLUSION Agricultural development has always been shortage of capital for many reasons, which is the bottleneck for many years The problem is when other capital is limited, the practical response to the capital need for agricultural economy development is still based on bank credit channel is inevitable The study on "Bank 30 credit contributes to the development of the agricultural economy in the MRD KER" with the aim give out solutions for strengthening bank credit for agricultural economy development in the KER of the MRD In addition to explaining the scientific basis, the reasons for choosing the topic, identifying the research overview, research purposes, research objectives, research questions and research hypotheses, research object, research scope, the thesis have the following major contributions: First Synthesizing, selecting, and adding to contribute to finalize the theoretical framework on strengthening bank credit for the agricultural economy development in KER Synthesizing and supplementing theories on banking credit strengthening for agricultural economic development in the KER, clarifying the basic issues on commercial bank credit; basic theory of strengthening credit for agricultural economy development, the concepts of agricultural economy credit, strengthening credit for agricultural economy development, characteristics of agricultural economy credit, the role of bank credit for agricultural economy development in the KER; the indicators reflect agricultural economy credit strengthening, the content of strengthening to limit the credit risk of strengthening credit for agricultural economy development The thesis mentioned the lessons learned have reference valuable from a number of countries in the region on strengthening bank credit for agricultural economy development such as Thailand, Malaysia and Indonesia - Two The thesis focuses on analyzing and evaluating the real state of credit of agricultural economy development in the KER in terms of capital mobilization and use of capital; bank credit has impacts on internal agricultural economic and point out the issues of concern Based on that, the thesis draws on the achievements, limitations and causes of limitations of credit bank for agricultural economy development in the KER including: [i] Group of limitations and causes of limitations from commercial banks themselves; [ii] Group of limitations and causes of limitations from customers; [iii] Group of limitations and causes of limitations from macro management - Third The thesis proposes groups of solutions and recommendations to ensure strengthening bank credit for agricultural economy development in the KER till 2025 with a vision to 2030: The solution group for commercial banks, including: improving to complete the capital mobilization and the capital mobilization linkage; perfecting the implementation plan of the human resource ability development strategy; strengthening lending under key programs, projects, key infrastructure chains coupled with flexible interest rates; limiting the risks of strengthening bank credit; perfecting the implementation plan of customer strategy in accordance with the actual situation; simplifying the process, documents, credit procedures associated with intensifying activities of inspecting and supervising banking operations; improve the ability to handle overdue debt, collateral assets The solution group for customers in order to create a solid basis to strengthen credit bank for the agricultural economy development in the KER, including: raising the level of human resources, raising financial capability and the model of production and business organization for development of hi-tech agricultural economy; increasing investment in synchronous new technologies and techniques in order to raise the productivity, quality and competitiveness of agricultural products; combining closely hi-tech agricultural economy production with agricultural product processing and markets Recommendations for macro management include: solutions for local governments in the KER; the solution group for macro management in general such as: strengthening human resource development for agricultural economy in KER; attaching importance to the restructuring of agricultural economy in the KER, which is always associated with the MRD; restructuring the agricultural economy on the basis of the fact of natural conditions; restructuring the agricultural economy on the basis of comparative advantages; restructuring the 31 agricultural economy in the KER should respect the sustainable linkage of the MRD system; ensuring the sustainability of economic structure restructuring, labor structure and product structure; attaching importance to the investment in the economic infrastructure under the chain of key works to create a strong driving force; intensifying the research and application of new science and technology to develop hi-tech agricultural economy; intensifying the application of new technologies in combination with the natural economic forest development tradition against coastal erosion and river bank erosion; mobilizing all financial sources for development of agricultural economy in the KER; selecting and strengthening the position of Agribank as the main bank for agricultural and rural development loans; establishing the Mekong Delta Development Steering Committee; establishing agricultural industrial zone, establishing agricultural joint stock enterprises Some recommendations to the SBV of Viet Nam for focusing on improving the systematic in banking operations and focusing on synchronizing and strengthening the ability to make optimal use of the information technology system and other recommendations as living with climate change; ensuring the ecological environment; improving the competitiveness ability of agricultural products Each solution that is both systematic and individual should be applied in a synchronous manner and need to have appropriate roadmap to ensure strengthening credit bank for the development of agricultural economy in the KER - Fourth New contributions of the thesis Theoretically: Aggregating, and adding to contribute to systematize the theory on agricultural economics, strengthening bank credit for developing the agricultural economy in the MRD KER In which new concepts are constructed first in the thesis include: agricultural economics, the agricultural economy in the KER, agricultural economy credit, strengthening the bank credit for developing the agricultural economy in the KER, and the indicators reflect the strengthening of the bank credit for the agricultural economy development Practically: Introducing the new solutions are: (i) Stopping spread loans, focus on lending new technology agricultural economy, especially high technology to create a breakthrough in lending to invest for the agricultural economy development (ii) Focusing the totally investment capital on “the key economic infrastructure chains”, focusing on the agricultural economy loans of “the key economic infrastructure chains” (iii) Formalizing informal credit to effectively manage and increase the captital supply channel for farmers (iv) Establishing agricultural industrial zones, and establishing agricultural economic joint stock companies, after that developing into public companies (v) Making Agribank become the main bank for agricultural and rural loans (vi) The new solution recommendations are: combining new technology with the tradition of living with nature and protecting the ecological environment - Fifth This results of this thesis may be work as reference and research documents for the related courses and consult the reference for the management agency organizations, the actual activists in planning as well as in bank operation for agricultural economy development - Sixth Some new research directions: In this thesis there are related issues mentioned in the thesis such as: the efficiency of bank credit for the agricultural economy development; strategies for human resources in agriculture; industrialization and modernization of agriculture in the MRD; the role of science and technology in agricultural economic development but not into in-depth research because it is not the purpose of the research problem, they can be the problems studied in other specialized topics The thesis is done with great effort in complete hope, but it is difficult to avoid certain limitations, so I hope to receive the comments of the teachers and interested people ... agricultural economy in the KER; strengthening the bank credit for developing the agricultural economy in the KER; and the indicators reflect the strengthening of the bank credit for the agricultural economy. .. the agricultural economy in the KER, agricultural economy bank credit, strengthening the bank credit for developing the agricultural economy, and the indicators reflect the strengthening of the. .. contribute to clarify the theory of the agricultural economy in the KER, and the agricultural economy development in the KER; agricultural economy credit, and strengthening the bank credit for developing