CANADIA Bank plans to quadruple its lending to the agriculture sector this year to US$100 million, particularly targeting rice millers, according to its President Pung Kheav Se.
The increase comes as Cambodia targets growth in the agriculture sector and demand for rice exports continue to increase, he said.
“We see the demand for rice export increasing every year, so we will offer loans of $100 million to improve processing quality of rice milling in order boost exports,” he said.
He was speaking following the signing of an agreement to provide payments of Electricite Du Cambodge bills through bank ATMs held at Canadia Tower on Friday.
Canadia had extended some $20 million in loans to the agricultural sector in the first four months of 2011, nearly total the $25 million in lending to the same sector during the whole of last year, he said.
Rice millers have stressed the need for more loans to purchase paddy for processing.
Cambodia Rice Millers Association President Phou Puy said yesterday that millers currently possessed capital of about $60 million and another $18 million from the Rural Development Bank to purchase paddy each year.
“It is not enough with the increased number of orders from international markets. So, we need about $700 million in loans to buy paddy for export,” he said.
Much of Cambodia’s paddy is exported to neighbouring countries unprocessed, but Phou Puy said increased capital would allow millers to process more paddy in the Kingdom.
ACLEDA Bank was the largest lender to the agriculture sector in 2009, the latest year for which National Bank of Cambodia statistics are available.
ACLEDA President In Channy said yesterday the bank plans to increase its agriculture lending to more than $160 million in 2011, from $100 million last year. Agriculture lending will constitute 16 percent of the bank’s total lending in 2011.
“This year we see lots of infrastructure improvements, such as agricultural irrigation ... a strong export market, and a clear national policy supporting the sector,” he said.
“We are not scared to offer loans to the [agriculture] sector because we trust government goals to increase rice exports.”