Increasing access to finance for coffee rejuvenation in Vietnam
Coffee rejuvenation is essential to building a more sustainable sector in Vietnam. Therefore, in July a meeting was organized in Lam Dong province to catalyse cooperation between coffee exporters, banks and the World Bank’s Vietnam Sustainable Agriculture Transformation (VnSat) Lam Dong.
Enabling farmers to access funds
As a part of the VnSat project, many loans are available to farmers to enable them to rejuvenate their coffee farms, but farmers still face some barriers to successfully applying for the loans. This cooperation aims to build a more effective mechanism for farmers to get access to VnSat’s financial priority packages.
At the meeting, the exporters (Olam Vietnam Limited, Atlantic Commodities Vietnam Ltd, Tin Nghia) and banks (BIDV, SHB, VPB) agreed that cooperation is necessary to help improve access to finance. The banks showed their interest in supporting farmers to access to loans via the VnSat project, as well as to provide them with the guidelines for conditions and procedures in preparation for the loan application.
The companies also committed to providing further training for farmers on sustainable production, technical support for coffee rejuvenation procedures and the design and installation of irrigation saving systems, as well as helping to monitor the utilization of loans through these activities. VPbank was also very interested in a micro finance model proposed by Acom and will have further discussions and scoping to establish how feasible it is to implement.
New task force created
At the end of the meeting, all the parties agreed to establish a task force to “support to access to VnSat’s loans”, which will be chaired by IDH and GCP. The task force includes representatives of GCP, IDH, Acom, Olam, VnSat Lam Dong and the banks to facilitate cooperation in activities that support farmers to access the loans that form part of the VnSat project.
In addition, coffee companies are also considering the possibility of cooperating with VnSat in setting up farmers’ group and cooperatives so that these can enjoy other financial support packages in this project.