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

  • Hun Sen: Full country reopening to be decided in two weeks

    Prime Minister Hun Sen has announced that if the Covid-19 situation remains stable for 15 consecutive days from the end of the October 5-7 Pchum Ben public holiday, Cambodia will reopen fully, albeit in the context of Covid-19 whereby people have to adjust their lives to

  • Cambodia sets new Covid-19 quarantine rules

    The government has modified Covid-19 quarantine requirements, shortening the duration for, among others, Cambodian officials, foreign diplomats and delegations, investors and inbound travellers in general. According to an official notice signed by Minister of Health Mam Bun Heng late on October 16, quarantine length for Cambodian

  • Will Evergrande change the way Chinese developers do business in Cambodia?

    China’s property sector policy has exposed the grim financial condition of real estate developers including those operating in Cambodia, which raises questions over the viability of their projects and business going forward The dark blue netting draping over one of Yuetai Group Co Ltd’

  • Phnom Penh governor: Show Covid-19 vaccination cards, or else

    Phnom Penh municipal governor Khuong Sreng late on October 5 issued a directive requiring all people aged 18 and over and the parents of children aged 6-17 to produce Covid-19 vaccination cards when entering schools, markets, malls, marts, eateries and other business establishments that have been permitted

  • Cambodia seeks probe into 'false reports' on Hun Sen's alleged Cypriot passport

    Minister of Justice Koeut Rith on September 6 wrote a letter to his Cypriot counterpart Stephie Dracos requesting cooperation in investigating and providing the truth in relation to the "exaggerative and false allegations" that Prime Minister Hun Sen holds a Cypriot passport. In his letter, the

  • 'Pandora Papers' expose leaders' offshore millions

    More than a dozen heads of state and government, from Jordan to Azerbaijan, Kenya and the Czech Republic, have used offshore tax havens to hide assets worth hundreds of millions of dollars, according to a far-reaching new investigation by the International Consortium of Investigative Journalists (