THE government has doubled its contribution to rice milling loans offered by the Rural Development Bank, top government officials said.
“This year, the government has offered US$36 million [from $18 million] for rice millers to buy paddy from farmers,” said Mey Vann, director of financial industry and representative from the Ministry of Economy and Finance during a press conference on Friday.
“The money is a small amount compared to market demand of $350 million. However, it can keep prices stable as they often fluctuate because of buyers from neighbouring countries.”
The government, he said, was also preparing a $25 million fund to guarantee 50 percent of credit offered to the rice industry by commercial banks.
“We are preparing to set up credit-insured fund with 105,000 million riel guarantee for banks offering loans to rice millers,” he said.
However, Mey Vann said that the policy was not set to be implemented this year as it required in-depth preparation. “We are working with World Bank and IFC and we schedule to carry [it] out in 2012,” he said.
RDB President Son Koun Thor encouraged cooperation from the private sector, especially commercial banks, in offering agricultural loans.
Millers aim to meet the government’s target of exporting one million tonnes of milled rice from Cambodia by 2015.
President of Cambodia Rice Millers Association, Phou Puy, said: “Right now, rice millers are using their own capital [to buy paddy] which is made up of about $75 million and another $18 million from RDB - it is not enough with the increased numbers of orders from global markets,” he said.
Including paddy purchased with $25 million of loans from commercial banks, he said the association has bought about 230,000 tonnes of unmilled rice during the harvest season so far.
In Channy, president and CEO of Acleda, said that the bank had offered more than $100 million to the agricultural sector in 2010 - representing 50 percent of the total lent to the sector by banks.