Improving Agricultural Value Chain Financing: A Case Study of Seng Cu Rice Chain in Lao Cai Province, Vietnam

Date Received: Jun 12, 2020

Date Published: Mar 05, 2021

DOI: https://doi.org/10.31817/vjas.2020.3.3.05

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Issue: Vol. 3 No. 3 (2020): Vietnam Journal of Agricultural Sciences

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ECONOMICS, SOCIETY AND RURAL DEVELOPMENT

How to Cite:

Lam, B., Cuong, T., Hao, L., & Philippe, L. (2021). Improving Agricultural Value Chain Financing: A Case Study of Seng Cu Rice Chain in Lao Cai Province, Vietnam. Vietnam Journal of Agricultural Sciences, 3(3), 712–725. https://doi.org/10.31817/vjas.2020.3.3.05

Improving Agricultural Value Chain Financing: A Case Study of Seng Cu Rice Chain in Lao Cai Province, Vietnam

Bui Thi Lam (*) 1, 2 , Tran Huu Cuong 2 , Le Thi Thanh Hao 2   , Philippe Lebailly 1

  • Corresponding author: btlam@vnua.edu.vn
  • 1 Gembloux Agro-Bio Tech, University of Liège, Belgium
  • 2 Faculty of Accounting and Business Management, Vietnam National University of Agriculture, Trau Quy, Gia Lam, Hanoi 131000, Vietnam

    • Keywords

    Agricultural value chain finance, Seng Cu rice, rural finance, Lao Cai province

    Abstract


    Nowadays, the value chain financing (AVCF) is considered as an effective agricultural financing approach in the world, however, its prevalence is still limited in developing countries, like Viet Nam. This paper analyses the financial gap between the demands and the actual credit obtained of the Seng Cu (SC) rice chain participants in Lao Cai. Cross-sectional data were collected from 160 face-to-face interviews with SC rice producers and from in-depth interviews with 31 other stakeholders involved in the chain (demand-side) and the representatives of district-branch banks (supply-side) in 2016 - 2017. Overall, almost chain actors had high financial demands, especially upland rice producers and the leading chain actor (TPC). However, they faced many credit constraints related to the strict risk-avoidance strategy and the collateral requirement of banks. Even the SC rice chain confirmed its high potential and many supportive linkages among them developed, the decision-making of banks on credit disbursements still depends on the individual capability of each chain actors, not the entire chain.  Thus, the recommendations for policymakers, producers, and agribusiness are suggested to enhance the financial sources going in the chain and the effectiveness of chain actors in the locality.

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