World Bank finance project benefits rural regions of Viet Nam

According to a representative of Mekong Economics (MKE), a leading economic consulting company in the Greater Mekong sub-region, finance from the World Bank created a large investment of the whole society for the agriculture sector in Viet Nam - VNA/VNS Photo Manh Linh

The assessment of donors, implementing agencies and beneficiaries was discussed at a workshop on completion assessment of the Third Rural Finance Project in Ha Noi yesterday.

The project is reported to have generated VND9.8 trillion or US$487 million for rural areas in Viet Nam, thanks to the initial finance of $200 million from the World Bank.

After five years of implementation, the project completed its first stage. By December 31, 2013, a total $200 million funded by the World Bank was disbursed thus helping to increase income for farmers and rural businesses.

According to a representative of Mekong Economics (MKE), a leading economic consulting company in the Greater Mekong sub-region, finance from the World Bank created a large investment of the whole society for the agriculture sector in Viet Nam.

The MKE reported that 94 per cent of end-borrowers said their incomes had improved after lending.

Specifically, the project, with additional funding from local banks and people's credit institutions and contribution from end-borrowers, had created total investment of up to $487 million. Of this figure, 90 per cent are medium and long-term investments.

It is estimated that more than 135,000 people and businesses in rural areas had access to loans. The project had generated more than 140,000 new jobs. On an average about VND65 million ($3,095) had found a new job.

Speaking at the workshop, Victoria Kwakwa, World Bank's Country Director for Viet Nam, said what they saw in this project was that financial institutions contributed their own resources into this project. Simultaneously, they also managed projects and ensured that they could do a good job of developing agriculture and rural development, reducing poverty and generating profit.

Deputy PM Hoang Trung Hai appreciated the implementation of this project noting that it was a model one. Hai said the third finance project had done a good job noting that local relevant bodies needed to strictly review ODA funding by learning from this project.

He also called on donors to continue assisting Viet Nam in developing its economy, elevating poverty, and said that the Viet Nam Government was committed to using this funding in a transparent and effective manner.

The objective of the Third Rural Finance Project for Viet Nam is to increase economic benefits to rural private enterprises and households by increasing their access to finance.

The project aims at helping the Vietnamese Government to raise the economic benefits for rural private businesses and households by enhancing their access to financial resources.

The Bank for Investment and Development of Vietnam (BIDV) was assigned with managing and implementing this important phase of the project. Totally, with this loan, the World Bank's funding reached US$548 million for the rural finance project.

After the end of the disbursement period, the project's funding will continue to up to 2033. It is estimated that it will help generate a total social investment of up to $5 billion from the revolving fund managed by BIDV.