Only one in nearly 100 agricultural enterprises can borrow green capital

A report from the Management Institute for Sustainable Development (MSD) on March 20 said there is a large gap between sustainable agricultural practices and access to green finance. The research team surveyed over 97 businesses and cooperatives in the coffee, rice, seafood, fruit and vegetable and agricultural service industries. Only 1 of these units received preferential loans from banks.

This is a fairly low index as Vietnam issued a green taxonomy last year, with 7 fields and 45 industries. In addition, the Government also issued Decree 156, allowing credit institutions to lend for organic and circular agricultural projects without collateral, up to 70% of the project value.

However, Ms. Hoang Thu Trang, representative of the research team from MSD, said that businesses with domestic or international certification on sustainable agriculture still have difficulty “passing the door” of banks. Because certification is only one criterion, the remaining mandatory criteria must return to collateral and proof of capacity, especially counterpart capital and business plan.

Another barrier in accessing green capital is the understanding of bank officials. A large enterprise reported that they had an international organic certification, but the bank did not approve it, because the experts did not know this certification. Cumbersome procedures are also what makes businesses hesitate. These barriers force most agricultural businesses to borrow money from relatives, or take regular loans from banks, which also require collateral.

Ms. Nguyen Thi Hai Yen, Financial Institutions Department, Vietnam Bank for Agriculture and Rural Development (Agribank), admitted difficulties when bank officials are not qualified to appraise projects according to the green classification category.

For example, in the field of recycling plastic cups and paper, the green classification list according to Decision 21 in 2025 requires the project to meet technological requirements according to the provisions of law on environmental protection and construction, and apply the best available techniques according to the roadmap prescribed by the Government. Ms. Yen said it was difficult for bank officials to understand the phrase “roadmap prescribed by the Government”. In case the above roadmap has been issued, businesses also need to prove that they can meet the best technical requirements in accordance with this roadmap.

“When they have international certificates on product quality, how can they synchronize international standards with Vietnamese standards? Or do businesses have to continue to apply for Vietnamese standards?”, Agribank representative stated. Currently, collateral in agriculture still follows Agribank’s general requirements.

Dr. Bui Thanh Minh, Deputy Director of the Office of the Private Economic Development Research Board (Division IV), said that one of the big challenges in promoting green finance is the lack of a “common language” on criteria and requirements for green projects between banks and businesses. To solve this challenge, Mr. Minh emphasized the need for an ecosystem-oriented approach, in which policies, financial tools and standards are designed and operated synchronously. At the same time, spreading good practice models will play an important role in creating trust and promoting transformation in the business community.

Besides, experts agree that Vietnam’s green taxonomy needs to be “lowered”, to reach the group of cooperatives and micro, small and medium-sized enterprises. The language used needs to be like “grandmother’s words”, close and detailed, so that farmers can understand. The research team also proposed redesigning financial tools, while strengthening the intermediary role of supporting organizations, to narrow the gap between the capital market and small and micro enterprises in the value chain.

According to the research team, in the next 1-3 years, the demand for sustainable finance in agriculture is expected to increase, especially for activities such as sustainable farming, circular economy and meeting agricultural standards and certification. This poses a requirement to review and remove bottlenecks in capital access, to ensure that green credit and agricultural and rural credit policies are effectively implemented in practice