Logo of Phnom Penh Post newspaper Phnom Penh Post - Agriculture on bank agendas

Agriculture on bank agendas

Agriculture on bank agendas

110204_8
A woman harvests rice in Siem Reap province in November of last year. Agri-business has been highlighted as a main target by banks this year. Photo by: Will Baxter

Rice milling and food processing will be factors in loan demand

THE agricultural sector is proving one of the top target markets for loans this year, according to some of the Kingdom’s leading bankers.

An improvement in sector outlook has spurred interest, members of the banking community said yesterday. Last year, the government outlined plans to export one million tonnes of milled rice to global markets by 2015.

In Channy, chief executive officer and president of ACLEDA bank, said that after its outstanding loan value rose by 36.82 percent in 2010, the agricultural sector was the bank’s main focus.

“We plan increase loans to the agricultural sector from 12.25 percent of total loan value in 2010 to 15.25 percent. We plan to increase our [total] loans from US$744 million in 2010, to $1 billion this year,” he
said.

He stated that the agricultural sector was a large sector which many commercial banks had not previously targeted, due to a lack of rural branches. The sector represented 43 percent of loan customers for ACLEDA in 2010.

Rival banks, however, are looking towards agricultural development as a growth market. Dieter Billmeier, vice president of Canadia Bank, saw his bank’s total loans rise by 30 percent year-on-year in 2010, led by the agricultural sector.

“Agricultural growth is very strong and will continue at a high level for the next few years. Rice milling facilities and food processing facilities will be factors in loan demand in years to come,” he said.

ANZ Bank also highlighted agri-business as a main target for 2011. “Our focus sectors this year include agri-business, manufacturing, and wholesale and retail trade. We are also very interested in infrastructure.” said Stephen Higgins, chief executive officer of ANZ Royal Bank.

General manager of Foreign Trade Bank Gui Anvanith described agriculture as “the machine of our economy” that would push growth in other sectors.

ANZ, ACLEDA and FTB all ruled out real estate loans as a target sector for 2011.

Last year, FTB, Canadia, and Vietnam’s BIDC banks signed an agreement with the state-led Rural Development Bank  for a $23 million loan package to be disbursed to the agricultural sector.

The government has doubled funds for agricultural loans made through RDB from $18 million in 2010 to $36 million this year. It is also preparing a $25-million fund to guarantee 50 percent of credit offered to the rice industry by commercial banks.

MOST VIEWED

  • NY sisters inspired by Khmer heritage

    Growing up in Brooklyn, New York, Cambodian-American sisters Edo and Eyen Chorm have always felt a deep affinity for their Cambodian heritage and roots. When the pair launched their own EdoEyen namesake jewellery brand in June, 2020, they leaned heavily into designs inspired by ancient Khmer

  • Cambodia records first Omicron community case

    The Ministry of Health on January 9 reported 30 new Covid-19 cases, 29 of which were imported and all were confirmed to be the Omicron variant. The ministry also reported 11 recoveries and no new deaths. Earlier on January 9, the ministry also announced that it had detected the Kingdom's

  • The effects of the USD interest rate hike on Cambodian economy

    Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by

  • PM eyes Myanmar peace troika

    Prime Minister Hun Sen has suggested that ASEAN member states establish a tripartite committee or diplomatic troika consisting of representatives from Cambodia, Brunei and Indonesia that would be tasked with mediating a ceasefire in Myanmar. The premier also requested that Nippon Foundation chairman Yohei Sasakawa

  • Kampot tourism quay ‘90% done’

    Construction on Kampot International Tourism Port – a 4ha quay in Teuk Chhou district about 6km west of Kampot town – has fallen off track, reaching 90 per cent completion, according to a senior Ministry of Tourism official last week. The project is now planned to be finished

  • Demining rat ‘hero’ Magawa dead at 8

    A landmine-hunting rat that was awarded a gold medal for heroism for clearing ordnance from the Cambodian countryside has died, his charity said on January 11. Magawa, a giant African pouched rat originally from Tanzania, helped clear mines from about 225,000sqm of land – the equivalent of 42