Farmers can apply for low-interest loans to reduce production costs after ARDB agreement
Farming communities can consider reducing production costs through low-interest loans following a subsidiary loan agreement between the Agricultural and Rural Development Bank (ARDB) and three financial institutions.
The agreement was signed with a commercial bank and two microfinance institutions (MFIs) – Cambodia Post Bank Plc, Chamroeun Microfinance Plc and AMK Microfinance Institution Plc – under the Cambodia Agricultural Sector Diversification Project (CASDP) on 15 august.
The agreement aims to support the agricultural sector, a pillar of the Cambodian economy, at a time when the world is facing a food crisis.
Cambodian Rice Federation President Song Saran told the Post on Aug. 16 that the funding package reflects the government’s commitment to securing low-interest financing for farmers and farming communities.
“I see this as good news in the new financing environment, which shows that the government is committed to working with financial institutions such as microfinance institutions located close to farming communities, as well as with farmers, to provide easy and efficient financing.
“I support the fact that the ARDB has set this policy to help the farming community as much as possible, by enabling them to access appropriate finance at an appropriate rate of interest,” Saran said.
Mak Chamroeun, Chairman of AgriBee (Cambodia) Plc, also commended the government institution and financial institutions for their efforts in financing the agricultural sector.
“I believe that providing low interest loans to farmers or key players in the agricultural sector is necessary to keep the cost of farmers’ agricultural products low, allowing them to be competitive in the market” , did he declare.
ARDB Deputy Director General Chan Seiha told reporters at the event that CASDP has a capital of $30 million, which is funded by the World Bank to focus on agriculture, with the exception of rice for five years.
“We have collaborated by providing our three partners, of which we are the main one, so that they can work directly [with the farming communities],” he said.
Seiha said the “wholesale” loans made by the ARDB to the three financial institutions are at an interest rate of 5% per annum, with no service charges.
“However, the interest rate that the three institutions offer to customers depends on the policy of each institution, the farmers and the current farming community,” he added.