The Cambodia Rice Federation (CRF) has asked the state-owned Agricultural and Rural Development Bank (ARDB) to extend its loan repayment period to 12 months to help rice millers buy paddy.
The request was made on Wednesday at a meeting with Cambodia Chamber of Commerce (CCC) Kith Meng on the progress and impact of Covid-19 on the private sector at the CCC.
CRF president Song Saran told The Post that the current ARDB loan repayment period is too short and could hinder its members’ ability to purchase paddy from farmers.
He said he stressed to the CCC that the upcoming harvest season would be especially harsh, with members scrambling to buy a slow supply of paddy.
“Most of our members say the repayment period goes by too quickly and it is not effective in helping buy paddy,” he said. “We suggest offering longer [repayment terms] on loans for stockpiling.”
Saran said the rice sector needs between $80 and $120 million in capital investment to hit the big one-million-tonne milestone in milled-rice exports.
Chan Pich, general manager of rice miller and exporter Signatures of Asia Co Ltd, said approval of the CRF’s request would be a boon for the private sector’s paddy purchase target.
He said his company plans to buy 200,000 tonnes of the new fragrant variety of paddy Sen Kra’op during its harvest season, which begins next month.
“We would like a longer [repayment] period to make the best use of our loans. The time is too tight, leaving us in a precarious position. Giving us as long as a year would be a real blessing,” he said.
ARDB CEO Kao Thach could not be reached for comment on Thursday. However, the CRF’s Saran said ARDB had accepted the proposal and promised to forward it to the government for review and approval.
In March, the ARDB released a $50 million fund to provide low-interest loans to enterprises and entrepreneurs in the agricultural industry ranging between $10,000 and $300,000.
The government in May decided to cut the annual interest rates from six to five per cent for working capital and from 6.5 to 5.5 per cent for capital investment, without service charges.