Improving the Quality of Human Resources to Ensure Loans to the Right Targets to Meet the Needs of People and Economic Organizations Participating in Agricultural Activities

However, in the past, credit institutions have not paid due attention to lending to agricultural production activities with medium and long-term capital, the proportion of medium and long-term loans is lower than that of short-term loans. Therefore, in the coming time, credit institutions need to increase the proportion of medium and long-term loans to create conditions for individuals, businesses, farms, cooperatives, etc. to access this capital source to implement long-term agricultural production projects, with specific solutions such as:

- Continue to provide medium and long-term credit according to the traditional method that has been deployed.

- Promote the development of financial leasing credit in the agricultural and rural sectors. Expanding the rural financial leasing market can simultaneously solve many existing problems such as meeting medium and long-term capital sources, overcoming limitations on collateral and being able to strictly control the purpose of capital use of customers. This type of credit is implemented on the basis of a financial leasing contract (with leased assets being machinery, equipment, means of transport, etc.) between the lessor, which are credit institutions, financial institutions and the lessee. Thus, the lessee (the subjects participating in agricultural production activities) does not need to spend all the money at once to have machinery and equipment, and does not need to mortgage assets as in other loan transactions; the lease term is often long-term, and production households can invest in large-scale equipment and technology innovation, implementing agricultural and rural mechanization. Cooperatives can use this credit product to focus on large-scale production.

- Focus on implementing co-financing lending products according to the value chain linking agricultural production. Accordingly, credit institutions can link together to coordinate credit provision for entities participating in a production chain. Commonly in rural areas, the Bank for Agriculture and Rural Development and the Bank for Social Policies can link together to co-finance loans for agricultural product development projects from input materials to output products. When

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Accordingly, the Social Policy Bank can provide loans to individuals, households or farms, cooperatives that produce, cultivate, etc. raw materials to supply for projects on processing and manufacturing agricultural products; the Bank for Agriculture and Rural Development will provide credit to enterprises participating in purchasing and processing agricultural products, ensuring output for the production chain. With this loan product, it is possible to share risks among credit institutions participating in credit provision, taking advantage of specific policies of each bank in accordance with the characteristics of the borrower, while monitoring the process of using loans as well as ensuring stable input and output for the borrower.

3.3.7. Improve the quality of human resources to ensure loans are given to the right subjects, meeting the needs of people and economic organizations participating in agricultural and rural activities and new rural construction.

To improve credit quality, an indispensable factor belongs to the credit staff as the lending entity in the credit relationship. Credit officers must have solid qualifications, good professional skills, be knowledgeable about customers, have a deep understanding of the financial capacity as well as the development potential of customers, have extensive knowledge of the industry, good market analysis ability, and must have ethics, enthusiasm, carefulness, etc., thereby being able to evaluate loan projects well to create efficiency and avoid credit risks.

- Currently, the network of credit institutions in rural areas still has many limitations such as the number of credit officers is still small, lack of experience ... therefore, to meet the needs of participants in the agricultural and rural areas, especially lending for new rural construction which is quite new, to improve the efficiency of bank credit operations in this field, credit institutions need to improve the qualifications and capacity of credit officers. Improving the qualifications of credit officers helps shorten the time to receive documents and approve loans while still ensuring safety. This will contribute to quickly satisfying customer needs, not missing opportunities for customers, when labor productivity increases, banks can serve more customers.

- The credit institution directs branches and transaction offices to review and evaluate staff, especially credit officers, based on criteria such as education level, expertise, professionalism, attitude, professional ethics, labor productivity, credit quality, income generated, etc.

- Fundamentally restructure the current staff based on evaluating, classifying, and selecting staff with appropriate professional capacity and qualifications, arranging and assigning staff appropriately, the right person for the right job so that staff can promote their strengths and limit their weaknesses to meet the increasingly high requirements of the bank.

- Professional ethics for bank staff in general and credit staff in particular are extremely necessary, therefore, credit institutions need to select and arrange credit staff who are not only talented but also dedicated to credit operations and loan appraisal. Regularly promote corporate culture to staff, improve professional ethics, awareness of compliance with procedures, discipline, and organization's rules. At the same time, through monitoring of lifestyle, social relations to promptly detect and prevent violations and weaknesses.

- Implement a mechanism of assigning work to people with clear and serious rewards and punishments to improve labor productivity and quality of operations. Strengthen business accounting and practice thrift.

- Regularly organize training and in-depth training for credit officers on farming techniques, agricultural, forestry and fishery extension knowledge, etc.; organize field surveys and learn from experiences, etc. to help credit officers improve the quality of appraisal of plans and projects, and at the same time be able to build lending programs that are realistic for the agricultural and rural areas.

- Focus on developing human resources with expertise in high-tech agriculture to improve appraisal capacity for high-tech agricultural production models, as a basis for accelerating the project selection process as well as deciding on credit conditions (loan amount, loan term, loan guarantee ratio, etc.) that are beneficial to customers while still ensuring safety for the bank.

- There should be a policy of encouragement and reward for credit officers working in remote, mountainous and island areas who work effectively and bring profits to the organization, but there should also be a strict disciplinary and punishment regime for those who work irresponsibly and cause capital loss to improve their spirit, efficiency and responsibility for the assigned work. In the salary and reward mechanism, it is necessary to focus on ensuring that officers and employees have incomes that are consistent with their work results, avoiding equalization and paying salaries based on seniority and qualifications. Pay attention to satisfying the legitimate needs of employees. There should be specialization among credit officers. Banks should assign each credit officer to be in charge of a certain lending area divided by industry. Depending on the qualifications and capacity of each person, the management board will assign appropriate work. Such specialization will create conditions for credit officers to easily supervise and work closely with customers in capital management.

- For the Social Policy Bank: training a good bank officer means building a good part-time teacher, which is the factor to bring information and convey knowledge about the Party and State's policy credit to the poor and policy beneficiaries most effectively. Commune leaders, especially the Poverty Reduction Board officers and Association officers, the Savings and Credit Group Management Board play an important role in the activities of the local Social Policy Bank. Therefore, the capacity of commune and association officers, and the Savings and Credit Group Management Board is one of the important factors affecting the effectiveness of the program. Therefore, the Social Policy Bank regularly organizes training for Association officers and commune officers on professional skills related to lending entrustment work. The training content for each subject is divided into different levels, choosing appropriate approaches and teaching methods to convey knowledge to students in the most effective way.

3.4. SOME PRINTING RECOMMENDATIONS

3.4.1. For the Government

- The state needs to create a stable macroeconomic environment .

A stable macroeconomic environment will create conditions for entities to promote

strengths, use resources effectively, contribute to the overall development of the country. The State needs to maintain a healthy economic development, ensure a stable business environment so that people and businesses have favorable conditions for investment in agriculture and rural areas. In addition, in a safe living environment, a stable economy will create conditions for entities to feel secure in doing business, developing the economy, and improving their lives.

- Strengthening the capacity and service provision ability of credit institutions in agricultural and rural lending activities and new rural construction.

Although the State's policy is to encourage all commercial banks to participate in the agricultural and rural financial market, up to now, lending for agricultural and rural development has mainly focused on a number of state-owned credit institutions such as the Bank for Agriculture and Rural Development, the Bank for Social Policies, the People's Credit Fund, and the Cooperative Bank. Therefore, strengthening the financial capacity, risk management, and innovation of these financial institutions' operations is extremely important. It is necessary to increase the charter capital of these institutions and have certain support policies to create conditions for these financial institutions to further expand their lending networks in remote areas in order to enhance the sustainability of their operations.

There is a policy to attract and expand the scale of operations of microfinance institutions to expand lending to production households and poor households; create a bridge between formal and informal credit. Attracting and expanding the scale of microfinance institutions, especially foreign institutions, is important in increasing credit sources for agricultural and rural customers. On the other hand, if the strengths of these two sectors can be exploited and coordinated, it will ensure more credit flows and higher quality for rural people, especially the poor.

Increase direct investment capital for agricultural development in the direction of prioritizing capacity improvement and the system of scientific and technological research facilities, aiming to create new breakthroughs in productivity, quality and economic efficiency. Investment policies need to pay attention to

mechanization, preservation, post-harvest processing, reducing loss, increasing product value.

Promote the development of rural credit networks, continue to allocate preferential credit capital for investment in agriculture, encourage banks and credit institutions to lend capital with preferential mechanisms for agriculture and rural areas. Prioritize products with potential in the market that farmers need investment capital. Increase access to credit for businesses and farmers through lending according to the industry chain, focusing on purchasing and processing enterprises.

Continue to implement preferential policies on land use fees, value added tax, and corporate income tax to encourage businesses to invest, especially in high-tech investment projects, post-harvest agricultural and food processing technology, and investment projects in disadvantaged areas. Replicate and popularize investment socialization models and effective and sustainable infrastructure management models for rural areas.

- Encourage financial intermediaries to participate in providing credit for new rural construction.

First, it is necessary to recognize that developing sustainable credit institutions requires identifying highly capable intermediaries, clearly linked to the goal of supporting customers in the agricultural and rural sectors, having appropriate market and technology approaches, and being able to link with partners in addressing weaknesses and challenges in credit granting practices.

The Government needs to take measures to restructure, increase charter capital and financial capacity for credit institutions operating in the agricultural and rural sectors, along with the requirement to improve methods, procedures, transaction costs, and strengthen supervision of the activities of these intermediaries.

To ensure sustainable development for financial institutions in the agricultural and rural sector, the level of diversification, efficiency and competitiveness of financial intermediaries also needs to be promoted. The Government needs to gradually open the agricultural and rural credit market to the international market through policies.

policies to encourage foreign investors to participate in the agricultural and rural credit sector, such as allowing the opening of branches or the establishment of joint venture banks. Taking advantage of the benefits from sharing technology and expertise of foreign banks, and even mobilized capital sources, will contribute to improving the operational capacity of domestic financial intermediaries, increasing capital sources, and promoting competition in this market.

A transparent market and preferential mechanisms need to be implemented for domestic and foreign commercial banks that have the desire and capacity to penetrate the agricultural and rural financial market with preferential policies clearly defined and announced regarding the subjects, levels and duration of incentives. It is necessary to remove regulations on interest rate ceilings for agricultural and rural credits in order to create a market mechanism for fair operation of entities in this field.

- The government needs to take measures to develop the agricultural insurance market.

There needs to be a mechanism for sharing risks in bank credit activities and agricultural production households through the formation and development of the agricultural insurance market, insurance companies and credit guarantee funds. Credit institutions and insurance companies coordinate closely in promoting the development of the insurance market for enterprises operating in the agricultural sector. Promoting credit growth in the agricultural sector with many potential risks requires an organization to control well the risks for this specific activity, thereby minimizing risks for the credits provided by banks to customers. In practice, agricultural production activities face many risks related to weather and epidemics while the insurance market for this sector often develops after the credit market. Insurance for the agricultural sector is a complex, costly and low-profitable sector, very susceptible to losses, so it is necessary to have support from the State for insurance enterprises operating in the agricultural sector. To develop the agricultural insurance market, the State needs to build a complete and systematic institutional and legal framework for managing the agricultural insurance system in Vietnam, including stipulating the list of products.

Compulsory insurance products include essential food, strategic export products and import substitution products. Currently, the draft Decree on agricultural insurance aims to institutionalize insurance activities in agriculture to a higher level with the support level for poor and near-poor households being increased to 90% and 75% of agricultural insurance premiums. However, the new draft Decree proposes a voluntary insurance plan without any industries requiring compulsory insurance, no forms of encouragement for people to participate in purchasing agricultural insurance, and no specific regulations on incentives to encourage the establishment of separate insurance companies for the agricultural sector. Therefore, the Government needs to have measures to support insurance businesses such as tax reduction, loss compensation and interest rate insurance for agricultural loans for some products, regulations on insurance premiums and compensation regulations different from those in conventional insurance fields, it is necessary to establish companies specializing in agricultural insurance and provide financial support for them through subsidizing insurance premiums for farmers and providing technical support in agricultural fields. Strengthen communication on agricultural insurance to individuals, businesses and cooperatives participating in the agricultural sector so that these subjects can better understand the preferential policies of the State for this type of insurance and thereby see the benefits of participating in agricultural insurance.

Gradually expand the subjects supported with agricultural insurance premiums for a number of crops, livestock and aquatic products produced according to high-tech application models (flowers, tea, cocoa, silk, cold-water fish, etc.) to encourage the purchase of insurance by organizations and individuals producing high-tech agriculture as well as expanding commercial bank lending to these customers.

- Expand support policies for near-poor households and households that have just escaped poverty so that they do not fall back into poverty, and that is also the motivation for poor households to rise out of poverty. At that time, it is necessary to complete the legal framework to unify the general preferential interest rate policy according to the level of poor households in an initial period so that they can go far beyond the poverty line, create stable and sustainable income, and avoid the situation of just escaping poverty and falling back into poverty. In addition, the Government also needs to review policies

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