Green credit has affirmed itself as an essential microfinance solution in response to climate risks and in support of Viet Nam’s National Green Growth Strategy for the 2021–2030 period, with a vision toward 2050.
More than merely enhancing farmers’ resilience to risks, green credit also encourages the adoption of sustainable and environmentally responsible production, business, and consumption practices.
A Powerful Microfinance Lever
The “Green Credit Loan” product is a practical initiative under the project “Agricultural Climate Risk Financing Initiative for Viet Nam” (AgriCRF VN). It is the result of close cooperation and technical support between Tinh Thuong One-Member Limited Liability Microfinance Institution (TYM), the German Agency for International Cooperation (GIZ), and the Department of Cooperative Economy and Rural Development (Ministry of Agriculture and Environment).
Its core objective is to encourage clients to access capital for production, business, and household needs in a green and sustainable manner.
The product is optimally designed to remove barriers to credit access for vulnerable client groups, with key advantages including: a maximum loan amount of up to VND 100 million; flexible loan tenors of up to 24 months; repayment of principal and interest on a weekly, monthly, or four-week cycle; fast disbursement within seven days; and no collateral requirement—creating favorable conditions for farmers.
Preferential Mechanisms and Institutional Commitment
TYM applies specific preferential mechanisms, offering interest rate reductions ranging from 0.9% to 2.1% per year compared to conventional loans. These incentives are available to clients holding sustainable product certifications (such as OCOP, VietGAP, GlobalGAP, etc.) or those using loan capital for green lifestyle purposes, such as purchasing electric vehicles or investing in solar energy equipment.
Speaking at a Training of Trainers (ToT) session, Mr. Phung Dinh Kien, Deputy General Director of TYM, emphasized that TYM regards green credit not merely as a financial product, but as a tool to drive changes in clients’ awareness and behavior toward greener lifestyles, contributing to sustainable development goals and social responsibility. Accordingly, two environmental criteria have been incorporated into TYM’s credit appraisal process to ensure rigor and consistency.
Alignment with National Policy Frameworks
The development of TYM’s green credit product takes place within a broader context in which the Government of Viet Nam has established a clear legal framework to encourage financial institutions to redirect capital flows. Notably, the Law on Environmental Protection 2020 and its guiding documents formally define Green Credit and require credit institutions to integrate environmental risk considerations into their operational processes.
By incorporating environmental criteria into its credit appraisal framework, TYM has effectively operationalized these macro-level regulations at the grassroots level. TYM’s green credit product plays a critical role in translating strategic objectives into action—contributing to emissions reduction and environmental protection, promoting sustainable agricultural transformation, and enhancing climate resilience among rural populations.
Pilot Results and Expansion Prospects
The product was piloted starting March 24, 2025, at two branches: Y Yen (formerly Nam Dinh Province) and Dien Chau (Nghe An Province). As of October 31, 2025, TYM had disbursed over VND 26 billion to 759 clients, 100% of whom were women. Outstanding green credit loans at the two branches reached VND 19.4 billion, accounting for 6.9% of total outstanding loans.
Notably, 72% of borrowers used the loans for green consumption purposes, while 28% invested in crop cultivation and mixed livestock production applying low-emission techniques. More than 500 TYM staff members have also received in-depth training on the product and its operational procedures.
Looking ahead, TYM seeks continued partnership with development organizations to: provide concessional funding to scale up green credit; establish transparent post-disbursement monitoring systems; develop specialized training programs on green credit practices for both clients and staff; and produce communication materials to raise community awareness of green finance. With the support of GIZ and a strong commitment to innovation, the “Green Credit Loan” product is expected to continue making meaningful contributions to Viet Nam’s sustainable development goals.
The tangible impact of green credit is illustrated through the story of Ms. Nguyen Thi Loan from Van Thang Commune, Ninh Binh Province. Green loan capital enabled her to expand her straw mushroom farming model, increasing her income to VND 40–50 million per month while also reducing the practice of straw burning, a major source of environmental pollution.
In addition, training programs have empowered clients—particularly group leaders—to disseminate green knowledge and messages to other members in the center, promoting awareness of sustainable production and consumption practices.
Ms. Nguyen Thi Loan shared:
“When I learned that TYM provides loans to support women’s development and offers green loans, I applied immediately after being advised. The disbursement was very fast. The loan helped me pay workers to collect straw, purchase materials, and build production facilities.”
Assessing the significance of the model, Mr. Le Duc Thinh, Director General of the Department of Cooperative Economy and Rural Development (Ministry of Agriculture and Environment), stated that the initial success of green credit at TYM—with more than VND 26 billion disbursed to 759 clients—clearly demonstrates that microfinance can serve as an effective channel for guiding production, business, and consumption behaviors in alignment with national strategies.
He emphasized that integrating sustainability criteria into microfinance credit appraisal processes represents a breakthrough step consistent with the spirit of the Law on Environmental Protection 2020. This model merits further research and replication to accelerate the transition toward ecological agriculture and emissions reduction, key priorities of the Government.
Next Steps and Strategic Orientation
Building on the encouraging initial results, TYM has conducted evaluations and product adjustments while continuing to explore opportunities for scaling up. The institution plans to introduce new loan tenors of 6, 12, 18, and 24 months, apply monthly principal and interest repayment options to enhance client flexibility, and develop specific guidelines for sector-specific activities such as aquaculture and livestock farming.
Notably, TYM is also considering renaming the product to “Green Practice Credit,” reflecting an orientation that goes beyond preferential lending to actively encourage clients to apply environmental protection principles in both production and daily life.
Source: https://nongnghiepmoitruong.vn/