The Relationship of Banks to Other Entities in the Agricultural Value Chain

Appendix 3: Bank's relationship with other units in the agricultural value chain

Technical training

Business training

Specialized support services

State and International Certificates

Non-bank financial institutions

Funds and individual investors

Bank

Export/ Wholesale

Distributor

Processor

Collector

Farmer

Raw material supplier

Financial Services Factors in Value Chain Support Services

Association/Cooperative

Industry communities

Product Flow Financial Flow

Source: Fries (2007) and Miller (2007a)

Appendix 04 : Applying the diamond model to value chain analysis

Opportunity

Market structure

Value chain/industry resource conditions

Market consumption conditions

Value chain/industry support unit

Government

Source: Porter (1990)

Appendix 05: Technical/functional quality model

Service expectations

Quality of service

Service received

Traditional marketing activities (advertising, PR, sales promotion) and external factors such as tradition, ideology and word of mouth

Image

Technical quality

Functional quality

Source: Gronroos (1984)

Appendix 06 : Interest rate ceiling for 5 priority sectors and reduction of required reserve ratio for commercial banks with high outstanding loan ratio in agricultural and rural lending

STT

Priority criteria	Priority level
1	Preferential interest rate ceiling	Reduced from 14% to 7%
2	Reduce reserve requirements with central banks - The proportion of outstanding debt in the agricultural and rural sector is from 70% or more - The proportion of outstanding debt in the agricultural and rural sector is from 70% or more	= 1/20 of the required reserve level = 1/5 of the required reserve level
3	The capital savings level of commercial banks lending to Agriculture and rural areas achieve priority debt ratio	Average about 40,000 billion VND

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Source: Monetary Policy Department, State Bank of Vietnam

Appendix 07: Comparison of lending interest rates and unsecured lending standards between value chain credit and conventional lending

Item

Value chain credit	Regular credit
Collateral	Commercial banks are considered to apply unsecured loans in cases where customers do not have enough assets to secure the loan.	Customers must meet the standards of commercial banks and the State Bank to be allowed to borrow capital without assets. sure
Loan amount	Maximum loan amount is 90% of the value of the loan plan or project.	Loan up to 90% of the value of the plan/project for short-term loans and 80% with medium and long term loans.
Interest rate (as of May 2014)	- Short term: 6.5%/year - Medium term: 9.5%/year - Long term: 10%/year - For closed value chain linkage models from production to consumption with loan terms above 12 months (but not more than 18 months), commercial banks consider applying interest rates short term loan	- Short term: 9%-10%/year - Medium term: 10.5% - 12%/year - Long term: 10.5%-12%/year

Source: Author's synthesis

Appendix 08: SPSS running results

Cronbach's Alpha results of TK scale

	N	%
Cases	Valid	352		100.0
	Excluded a	0		,0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.594		3
Observation variable	Medium scale if variable type		Variance scale if variable type	Variable-total correlation	Cronbach's Alpha if variable type
TK1	6.81		2,851	0.563	0.274
TK2	6.05		2,912	0.277	0.726
TK3	6.20		3,263	0.419	0.479

Cronbach's Alpha results of RR scale

	N	%
Cases	Valid	352		100.0
	Excluded a	0		0.0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.887		5
Observation variable	Medium scale if variable type		Variance scale if variable type	Variable-total correlation	Cronbach's Alpha if variable type
RR1	11.31		12,061	0.718	0.865
RR2	11.15		12,090	0.695	0.871
RR3	11.06		11,745	0.749	0.858
RR4	11.05		11,914	0.734	0.861
RR5	11.03		11,885	0.738	0.861

	N	%
Cases	Valid	352		100.0
	Excluded a	0		0.0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.519		4
Observation variable	Medium scale if variable type		Variance scale if variable type	Variable-total correlation	Cronbach's Alpha if variable type
LT1	10.45		7,029	0.416	0.409
LT2	10.51		6,752	0.494	0.364
LT3	11.26		5,283	0.263	0.519
LT4	11.05		5,422	0.250	0.531

Cronbach's Alpha results of NL scale

	N	%
Cases	Valid	352		100.0
	Excluded a	0		0.0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.570		4
Observation variable	Average scale if variable type		Scale variance if variable type	Variable-total correlation	Cronbach's Alpha if variable type
NL1	11.84		4,465	0.047	0.866
NL2	10.97		4,221	0.567	0.363
NL3	10.91		4,300	0.529	0.387
NL4	10.95		4,192	0.568	0.359

	N	%
Cases	Valid	352		100.0
	Excluded a	0		0.0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.521		3
Observation variable	Medium scale if variable type		Variance scale if variable type	Variable-total correlation	Cronbach's Alpha if variable type
VM1	7.36		3,290	0.532	0.231
VM2	7.67		2,012	0.245	0.806
VM3	7.35		3,567	0.404	0.378

Cronbach's Alpha results of LI scale

	N	%
Cases	Valid	352		100.0
	Excluded a	0		0.0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.708		4
Observation variable	Scale mean if variable excluded		Scale variance if variable is excluded	Variable-total correlation	Cronbach's Alpha if variable is excluded
LI1	7.64		5,814	0.598	0.588
LI2	7.69		5,428	0.659	0.545
LI3	7.84		5,940	0.674	0.561
LI4	6.99		6,310	0.212	0.864

	N	%
Cases	Valid	352		100.0
	Excluded a	0		0.0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.919		4
Observation variable	Medium scale if variable type		Variance scale if variable type	Variable-total correlation	Cronbach's Alpha if variable type
HH1	6.88		6,252	0.835	0.887
HH2	6.87		6,613	0.806	0.897
HH3	6.81		6,290	0.822	0.891
HH4	6.83		6,470	0.789	0.902

Cronbach's Alpha results of HT scale

	N	%
Cases	Valid	352		100.0
	Excluded a	0		0.0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.861		3
	Medium scale if variable type		Variance scale if variable type	Variable-total correlation	Cronbach's Alpha if variable type
HT1	7.53		2,175	0.702	0.838
HT2	7.50		2,103	0.751	0.793
HT3	7.46		2,095	0.760	0.784

	N	%
Cases	Valid	352		100.0
	Excluded a	0		0.0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.906		3
Observation variable	Scale mean if variable excluded		Scale variance if variable is excluded	Variable-total correlation	Cronbach's Alpha if variable is excluded
PT1	7.26		2,615	0.825	0.855
PT2	7.21		2,766	0.790	0.884
PT3	7.02		2,965	0.829	0.856

Cronbach's Alpha results of SL scale

	N	%
Cases	Valid	352		100.0
	Excluded a	0		0.0
	Total	352		100.0
Cronbach's Alpha		Total observed variables
0.841		3
	Average scale if variable type		Scale variance if variable type	Variable-total correlation	Cronbach's Alpha if variable type
SL1	5.56		2,698	0.648	0.833
SL2	5.45		2,283	0.782	0.702
SL3	5.58		2,461	0.692	0.793

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