Solving the 'thirst' for capital for cooperatives

The collective economy, with cooperatives as its core, is asserting its important role in agricultural development and new rural construction. However, many cooperatives in Hai Phong are still struggling with a 'thirst for capital'.

Duc Chinh Agricultural Service Cooperative hopes that loan capital will be abundant and loan conditions will be simpler.

Struggling due to lack of capital

At this time, Duc Chinh Agricultural Service Cooperative (Tue Tinh commune) is focusing on taking care of the city's largest carrot farm to prepare for the new harvest season. Compared to last year, this year's weather is basically favorable. On average, each year, the cooperative harvests about 25,000 tons of carrots, of which up to 80% of the carrot output is exported to the markets of Korea, Malaysia, etc.

Although carrots are purchased easily, they are mainly sold fresh, lacking facilities for preliminary processing and deep processing. This leads to times when carrots are in season, prices are low, and there is no preservation process, so members have to sell them at "cheap as free" prices. Mr. Nguyen Duc Thuat, Director of Duc Chinh Agricultural Service Cooperative, said: "We have land, labor, and products that are popular in the market, but if we want to expand production, invest in cold storage, preliminary processing and deep processing machines, etc., we are stuck with capital sources. Without collateral, banks do not lend, while the cooperative's charter capital is too small to manage."

Not only in Duc Chinh, Truc Trang Organic Agriculture Cooperative (An Truong commune) also faced the situation of "lack of money". After the Yagi storm in 2024, the cooperative's dragon fruit field was severely damaged. Mr. Hoang Van Vien, Deputy Director of the Cooperative, said that the current major difficulty is the lack of capital to invest in preliminary processing and preservation systems, which makes the products easily damaged, affecting output. The Cooperative also wants to invest in science and technology to grow dragon fruit that produces off-season fruit for higher value. "We have just overcome the consequences of natural disasters, most of us have to borrow from individuals, many members mortgage their family's red books but it is not enough. Besides, many members are afraid of risks, so it is difficult to call for capital," Mr. Vien said.

The reason why cooperatives have not been able to access abundant capital is because they do not have collateral. Most cooperatives do not have headquarters, land certificates, and small production scale, leading to unconvincing loan applications. In addition, the accounting books and business plans of many cooperatives are unscientific, making credit institutions hesitant.

According to the City Cooperative Alliance, if businesses can raise capital through shares, cooperatives almost only rely on their own resources and bank loans. However, the loan conditions are quite strict, making it difficult for cooperatives, even with potential, to access.

Need for special mechanism

The city currently has more than 500 cooperatives, mainly operating in the agricultural sector. Currently, the city's Cooperative Development Support Fund is disbursing loans to a number of units. Specifically, by 2024, the fund will lend 21 cooperatives VND 20 billion, with an interest rate of 0.6%/month. In the period of 2021 - 2025, the fund will directly support 14 cooperatives to access many other sources of capital, contributing to improving productivity and creating jobs in the locality. On average, each year, the fund disburses about 19 - 22 projects, with loans ranging from VND 100 - 150 million/project. However, this amount of capital is still too small compared to the actual needs to expand production.

To operate effectively and access capital more easily, according to Mr. Vu Duc Cuong, Head of the Credit Department of the City Cooperative Development Support Fund, first of all, cooperatives need to focus on building a production and business model in the direction of streamlining the apparatus, operating according to strict processes, with a clear structure, locating the workload and evaluating specific efficiency. Cooperatives need to proactively develop products with strengths, produce according to the value chain, and apply high technology to create great commercial value, meeting market demand.

Innovation and digital transformation in accordance with legal regulations also help cooperatives become reputable units with clear assets, qualified to participate more deeply in the market. In addition, publicity and transparency in financial and accounting work must be considered mandatory requirements. Only when clearly ensuring cash flow can cooperatives build trust among members and with external partners.

On the management side, the City Cooperative Union continues to request the city to supplement the charter capital for the City Cooperative Development Support Fund, along with continuing to improve the organizational structure according to regulations. The City Cooperative Union and the fund also promote the collection of due capital, monitor and supervise the operations of borrowing units and promote disbursement for cooperatives with urgent capital needs, which must be implemented seriously and on schedule.

The unit coordinates with the Vietnam Cooperative Development Support Fund to expand resources to create more favorable conditions for member units to access capital, gradually removing financial bottlenecks for the collective economy . "We propose that the State needs to have a special credit mechanism, with preferential loan packages with low interest rates, long terms, linked to the program of developing high-tech agriculture and OCOP products. At the same time, it is necessary to support cooperatives to stabilize land and headquarters, creating a legal basis for having mortgaged assets," said Mr. Cuong.

BRIGHT MOON

Source: https://baohaiphong.vn/giai-con-khat-von-cho-cac-hop-tac-xa-522833.html