VIETNAM AGRI FINANCE WORKING GROUP

In Partnership With:

Status Update

22 Sep 2015

AFWG – Current Operating Approach

• Primary objective to support commodity WGs to explore and develop financial linkage with FIs. (2 other objectives include knowledge sharing and PPD)

• Joint activities with commodity WGs – driven by needs, commitment and proactivity from commodity WGs

• Deep-dive on sector, followed by follow-up meetings with specific FIs. Minutes taken

• Flexible AFWG structure based on voluntary participation, in kind contribution (staff time, meeting venues), and coordinator role rotated yearly

• First year coordinator IFC and MARD, since Jun 2014

Cross-WG support

Knowledge sharing

Enabling environment

Public-Private TASK FORCE on Sustainable Agricultural Growth in Vietnam

Since May 2010

Coffee TeaFruit & Vegeta

bleFishery

Other agro-

commodities

Agri-Finance(6/2014)

Deepdive with Coffee WG, Sep 2014

Deepdive with Tea WG, Apr 2015

AFWG – A Year in Review

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Agrifinance Working Group established in Jun 2014BIDV, AgriBank, SHB, VietinBank, ANZ, Rabobank, Coop Bank, ABBankVCCI, Vitas, VNBA, Nestle, NedCoffeeIDH, IFAD, SNV, MARD, IFCetc.

Supporting other PPP Task Force Working Groups

1. "Roundtable Discussion on Agricultural Value Chain Finance and Agri-Finance Working Group " - May 2014 (Introducing models of supply chain finance, lessons learned from other countries, set-up and operation of an AFWG)

2. Deep-dive “Coffee Sector in Vietnam: Current Context, Future Trends and Financing Opportunities ” – Sept 2014 (a deep-dive with Coffee commodity working group to enhancing understanding of the AFWG on the coffee sector and explore coffee value chain finance linkages)

3. Follow-up meetings for Coffee WG _ linkages between Coffee WG and BIDV/Agribank - April 2015/Aug 2015 to discuss PPP Co-op profile, farmer group/farmer profiles and create possible financing linkages (initiative progress to be presented by Nestle)

4. Deep-dive “Tea Sector in Vietnam: Current Context, Future Trends and Financing Opportunities" - April 2015 ( a deep-dive with Tea commodity working group to assess needs and seek opportunities to link banks with specific value chain players (MSMEs) in tea production)

Knowledge sharing

1.“Agricultural Finance and the Roles of the Central Bank ” - Feb 2015 (Seminar co-organized with the State Bank of Vietnam Feb 2015) Sharing international experiences on different financing models of the value chain financing & the roles of the Central Bank; and taking stock of the current situation in Vietnam

2. Value chain linkages/Financing to cooperatives and farmer groups (organized by MARD and WB) - May 2015 (Theme for discussion at Cooperatives and farmer groups Workshop)

3. AgriFin Boot Camp – July 2015 (World Bank’s Value chain financing Training program to SBV and selected commercial banks). Follow up session in Nov 2015.

4. Agricultural Lending How-To Guide dissemination workshop – Tentatively Oct 2015 (Focus specifically on developing new products for lending directly to farmers. Introduce the development and implementation process, using the methodology presented in the Agricultural Lending How-To Guide as a model, with illustrative examples. Showcase how other financial institutions in the region have successfully introduced agricultural lending).

Challenges

• Dependent on proactivity, commitment, and concrete demand for financial linkages from other WGs• Difficulty to maintain frequent activities/limited senior management engagement of AFWG members• Time constraint to mobilize participation and follow-ups from AFWG members

Recommendations

• Interested FIs to join existing commodity WGs:• More focus and align FIs’ respective interests and priorities with target commodity groups

(tea/coffee/vegetable/fishery/etc.), geographic areas (where the commodity WGs have projects), target segments (SME/household/etc.)

• Actively engage in commodity WGs’ activity schedule and agenda• IFC completed the first year coordinator’s role and remains a member of the AFWG• New PPP coordination office to take over the Coordinator’s role in year 2 (review/confirm specific

needs/specific projects from commodity WGs for financial support)

AFWG – Recommendations going forward

THANK YOU!

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