ACLEDA, ARDB endorse MoU on agriculture credit scheme
ACLEDA, ARDB endorse MoU on agriculture credit scheme
ACLEDA Bank Plc and the state-owned Agricultural and Rural Development Bank of Cambodia (ARDB) have agreed to jointly implement a credit scheme to support agricultural sector companies, as well as provide loans to Pailin longan, mango and cashew nut production chain players, in fulfilment of the government’s SME Co-Financing Scheme (SCFS).
A memorandum of understanding (MoU) was signed to this effect by ACLEDA president In Channy and ARDB director-general Kao Thach on March 29.
Channy said that ACLEDA was “very proud” to support the SCFS, which he said aims to strengthen the agricultural sector by promoting stability in the supply chain and spurring economic growth after the Covid-19 crisis.
The MoU seeks to offer joint lending in Cambodia’s key agricultural sector foci of animal husbandry, aquaculture, fruit and vegetable growing and the processing of agricultural products. It also hopes to offer loans to Pailin longan, mango and cashew nut production chain players through a joint capital scheme between the two banks, which they say will be offered on a first-come-first-served basis.
Credit expansion as set out in the memorandum will also play an “important” role in increasing domestic production of agricultural goods, creating jobs and income for people particularly in rural areas, it stated.
Thach said that the signing of the MoU is testament to the success of the first phase of the SCFS, for which the ARDB and ACLEDA had collaborated on risk-sharing and co-financing mechanisms aimed at expanding the scope and size of credit offered to agricultural sector businesses.
He noted that, as the national economy continues to face economic damage from the Covid-19 crisis and begins the process of recovery, the ARDB has continued to “actively support” the offering of credit to SMEs, or small- and medium-sized enterprises, in the agricultural sector in a bid to stabilise their operations and output.
Phase I of the SCFS provided loans at concessional interest rates to SMEs in the agricultural sector that focused specifically on the cultivation of fruits and vegetables, animal husbandry, aquaculture and the processing of agricultural products.
On February 14, the government handed responsibility of a $50 million budget to ARDB for use in direct lending and risk-sharing under SCFS Phase II, where it co-finances programmes with banking and financial institutions to support agriculture sector entities.
Data from the Ministry of Agriculture, Forestry and Fisheries reveals that in the first two months of 2022, Cambodia exported just over 1.8 million tonnes of agricultural products – a nearly 10 per cent increase year-on-year.
Cultivation of Pailin longan has seen a significant increase, with more than 13,608ha planted throughout the country, largely concentrated in Battambang, Pailin and Banteay Meanchey provinces. It yields an average of seven-to-30 tonnes per hectare, depending on crop maintenance levels.
Meanwhile, Cambodia’s cashew nut exports reached $1.60487 billion in 2021, climbing by 233.32 per cent from $481.48 million in 2020.
