Logo of Phnom Penh Post newspaper Phnom Penh Post - Agricultural loan risk shared

Agricultural loan risk shared

Agricultural loan risk shared

110214_7
A woman harvests rice in Siem Reap province last November. The World Bank and the government have launched a programme to improve the agricultural sector.

The risk share scheme is particularly targeted at supporting borrowers who don’t have sufficient collateral

The World Bank and the government have launched a multi-million-dollar programme to improve agri-businesses access to credit by guaranteeing a portion of bank lending to the sector.

Participating banks and microfinance institutions will have 50 percent of agricultural lending guaranteed by the government and World Bank Group. The partners expect to support up to US$50 million in financing to the sector, according to a press release.

“Improving financing in the agriculture sector is vital for sustained growth and future poverty reduction in Cambodia,” said World Bank country director Annette Dixon.

The World Bank claimed agriculture contributed about one-third of the Kingdom’s GDP, and employs some 70 percent of the population.

ANZ Royal Bank Chief Executive Officer Stephen Higgins wrote yesterday that the programme would make loans available to a wider array of people in Cambodia.

“The risk share scheme is particularly targeted at supporting borrowers who don’t have sufficient collateral to support normal lending,” he said.

ANZ Royal is presently negotiating the finer points of its agreement to participate in the programme with the International Finance Corporation, an arm of the World Bank Group, and hopes to finalise it soon, he said.

The bank has been pushing harder into agri-businesses worldwide, he said, adding he was “very optimistic” about the outlook for Cambodia.

“The supply of arable land globally is not increasing, but demand is, which means over time the price of agri products will continue to rise, and that will benefit agri producing nations like Cambodia,” he said.

Loran Import-Export Company president Lim Bun Heng yesterday said he welcomed attempts to improve credit access for the Kingdom’s agri-businesses, adding it would boost production in the sector. “This
will be a very strong point in motivating Cambodian agribusiness to push rice exports around the world,” he said. “We’ve been waiting for a long time [for increased access to credit].”

The Cambodian government has emphasised the potential for the agriculture sector in recent months, as the Kingdom’s rice harvest exceeded some expectations last year.

Yesterday, the United Nations Food and Agricultural
Organisation revised upwards its projected rice exports for Cambodia – including unofficial cross-border flow – to 1.6 million tonnes for 2011, up from a projection of 1.4 million tonnes in its November update.

The FAO estimated Cambodia’s exports stood at 1.4 million tonnes in 2010. It also noted rice shipments directly to Europe recorded a substantial increase last year during in the first full year of the European Union’s Everything But Arms initiative. It also revised upwards its projection for rice produced last year to 8 million tonnes, from 7.3 million tonnes in November.

Ministry of Agriculture, Forestry and Fisheries secretary of state Chan Tong Yves declined to discuss risk share scheme yesterday, pending time to review the programme.

MOST VIEWED

  • Negotiations on EBA being held

    In an effort to defuse tensions, a senior government official said Cambodia is negotiating with the European Union (EU) on the Everything But Arms (EBA) trade deal, which allows the Kingdom to export goods to the 28-member bloc tariff-free. The EU notified Cambodia on October 5

  • Ministers to tackle sea pollutants

    Preah Sihanouk provincial authorities and members of local communities have collected 77 tonnes of water hyacinth at a Sihanoukville beach, Preah Sihanouk Provincial Hall spokesperson Or Saroeun said. He told The Post yesterday that the aquatic weeds had been floating along some of the province’s

  • Chinese police escort deported scam suspects

    Ninety-one Chinese nationals accused of extorting money from victims in a Voice over Internet Protocol (VoIP) scam were deported from Phnom Penh International Airport on Monday under the escort of 182 Chinese police personnel. General Department of Immigration head of investigations Ouk Hay Seila told reporters

  • Sam Rainsy, government group set to clash at IPU Geneva meet?

    Opposition figure Sam Rainsy has been invited to speak at the General Assembly of the Inter-Parliamentary Union (IPU) in Geneva, according to a former Cambodia National Rescue Party (CNRP) lawmaker. A government delegation is also set to attend the meeting, a National Assembly press release