Revolutionizing Agriculture: Why Credit Access Must Evolve for a Greener, Digital Future

The world of agriculture is on the cusp of a revolution, driven by the urgent need to reduce carbon emissions, enhance product traceability, and adapt to increasingly stringent global market standards. In Vietnam, experts believe that the next significant transformation in farming will not be driven by seeds or machinery alone, but by a fundamental shift in how capital flows into the agricultural economy. This transition is critical for Vietnam's agricultural sector, which is facing unprecedented pressure to go green.

Major export markets are enforcing stricter standards on environmental protection, carbon emissions, and traceability. As a result, green transformation is no longer optional but is gradually becoming a prerequisite for agricultural products seeking deeper access to international markets. According to Nguyen Quang Huy, head of the Faculty of Finance and Banking at Nguyen Trai University, green credit is viewed as a critical tool for reshaping production models and enhancing the competitiveness of Vietnam's agricultural sector.

Statistics show that by early this year, outstanding loans for agriculture and rural development reached approximately VND4.2 quadrillion, up more than 14 percent compared to the previous year. This accounted for over 22 percent of total outstanding credit in the economy and directly supported more than 14.6 million customers nationwide. However, most lending still relied on traditional collateral-based models. Meanwhile, green loans by the end of 2025 reached between VND780 trillion and VND850 trillion, but only slightly more than 3 percent was allocated to the agriculture sector, agricultural products, and fisheries.

The government has taken an important step by issuing Decision 21 in July 2025 on environmental criteria and the certification of projects classified as green. This marked the first formal foundation for developing green credit in a more systematic manner. Nevertheless, implementation remains fragmented due to the absence of a unified green standards framework across the banking system. Each financial institution currently applies different assessment criteria, making it difficult for businesses to access capital and creating inconsistencies in project evaluation.

The current credit model reveals significant limitations. Capital flows are still mainly directed toward individual small-scale farming households, while green and digital agriculture require close integration along value chains. This weakens capital efficiency and hinders the development of large-scale production zones. Another major challenge lies in the lack of agricultural data. Existing data remains fragmented and incomplete, while the credit system for green and digital agriculture requires transparent information, traceability, and real-time risk monitoring to function effectively.

The difficulties are not limited to farmers. Many enterprises and cooperatives also lack the capacity to meet green transition requirements. Businesses still face shortcomings in standards on environmental, social, and governance (ESG) practices, while cooperatives struggle with governance issues, and many farmers lack digital skills and access to technology. Experts warn that without simultaneously addressing barriers related to data infrastructure, production linkages, and credit mechanisms, the transition toward green and digital agriculture will proceed far more slowly than expected.

In conclusion, the transformation of Vietnam's agricultural sector towards a greener and more digital future is imperative. This requires a fundamental shift in how capital flows into the agricultural economy, with a greater emphasis on green credit and a unified standards framework. By addressing the structural barriers and limitations of the current credit model, Vietnam can unlock the full potential of its agricultural sector and ensure a more sustainable and competitive future for its farmers and exporters.