Bringing cooperatives and banks closer together

Representatives of Central and provincial Cooperative Alliance, Cooperative Assistance Funds, RaboBank (the Netherlands), Sacombank (Vietnam), climate expert, and 7 cooperatives were involved in the event to come across different topics, one of which was about the advantages and challenges that cooperatives have encountered over the past year.

Through the workshop, 2 coffee cooperatives who are currently holding Sacombank loans, have shared about the benefits from the loans which took them to a higher level of growth in their coffee and fertilizer business, as well as climate cleverness in 2021.

Mr Quan – Chairman of MTL coffee cooperative said “by a 2.5 billion VND Sacombank loan, our total coffee volume purchased from the members was increased by 200% and the fertilizer was also risen by more than 100% which doubled our 2021’s total sale compared to 2020, which is from 6.7 to nearly 12 billion VND”

Ea Kiet cooperative’s presentation also indicated some impressive growth in their 2021 coffee and fertilizer sale, versus 2020, including 30% increase in coffee purchased (480 tons) and nearly 20% in fertilizer (90 tons) supplied to the members.

Having said that, bank failures of credit line disbursement, that resulted in a stagnation of loan capital, was brought up to discuss, and it became a valuable lesson for future loans to make it more accessible for the cooperatives to take loans out at any time as needed for their business.

At the same time, the collateral issue also represents the biggest challenge to many of the cooperatives whose assets are seen insufficient to be collateralized.

To look for ways to solve these challenges, the Q&A section was focused on this subject, by which many cooperatives’ questions were directly addressed related to lenders’ collateral requirements, loans procedures, credit guarantee and Agriterra’s technical assistance among others.

Also, climate clever cooperative was part of the workshop, where key activities and achievements that are underway, were specifically presented by the climate expert (the Western Highlands Agriculture and Forestry Science Institute) with a concentration on difficulties and the successes of Climate Smart Agriculture practices application into coffee production in the past one year.

In short, the workshop was an integral activity under ‘Making Cooperative Bankable’ and the ‘climate clever’ project. With the 2021 achievements and lessons, this event made a great contribution to preparing many more potential cooperatives that are in need of working capital to possibly scale up their business in the years ahead.