THE Cambodian government plans to increase funding to the Rural Development Bank by US$7 million at the end of 2010, according to bank general director Sun Kunthor.
The RDB received funding of $13 million during 2009, capital which is lent to domestic rice miller associations to purchase paddy for rice production.
“We will work hard providing loans – with this capital, we hope more paddy will be bought,” he said yesterday.
Although the government-owned RDB will have a total capacity of $20 million at the end of the year, Sun Kunthor said the capital could not be used to purchase all of the Kingdom’s surplus paddy, but would still provide economic benefit.
“We will use the additional capital to provide loans to support the policy of boosting rice exports,” he said.
The government targets increasing funding up to $37 million for the RDB in the coming years, according to Sun Kunthor.
Suor Kheang, president of Kampong Cham province’s rice millers association, said most members use personal capital to buy paddy, as the bank’s lending was still relatively small.
“We do not depend on this loan too much because we also have our own capital to buy some paddy,” he said. The Kampong Cham millers’ association was lent approximately $500,000 last year.
Cambodia harvested approximately 7.58 million tonnes of paddy last year, about 3.5 million tonnes more than local demand.
Prime Minister Hun Sen introduced new policies on August 17 aimed at boosting economic growth through increased rice harvests and exports.
“If rice exports can reach 3 million tonnes, the value will be as much as $2.1 billion or about 20 percent of the country’s gross domestic product,” he said earlier this month.