$30M credit guarantee scheme for rice inked
$30M credit guarantee scheme for rice inked
The state-owned Credit Guarantee Corporation of Cambodia (CGCC), Cambodia Rice Federation (CRF) and participating financial institutions (PFIs) signed an agreement on the $30 million Rice Export Guarantee Scheme (REGS) to help millers stockpile rice for milling, processing, exporting and making local value-added products.
The signing ceremony was held last Friday in the presence of Ros Seilava, Secretary of State of the Ministry of Economy and Finance, the Board of Directors of the CGCC and the management and members of CRF, PFIs and CGCC.
The official cooperation by the three parties on REGS is aimed at increasing the productivity and competitiveness of Cambodia’s rice industry and boosting rice exports in line with the Royal Government of Cambodia’s policy on agriculture.
CGCC launched REGS as a portfolio guarantee scheme, having seven financial institutions participating including AMK Microfinance Institution, Canadia Bank, Foreign Trade Bank of Cambodia (FTB), Maybank (Cambodia), Prince Bank, Sathapana Bank, and Wing Bank (Cambodia).
The scheme will address the financing needs of rice exporters and millers having no collateral to avail of loans from financial institutions, especially during the harvest season.
At the ceremony, Ros Seilava said that the launch of the project is a reflection of the government’s strong commitment to support Cambodian rice production and rice exports through the public credit guarantee scheme, of which CGCC is the operator, by providing guarantee coverage of 80 percent with a maximum loan of up to $3 million.
“The REGS will support the financing needs of rice exporters and rice millers to purchase paddy from farmers to produce rice for exports in line with the government’s policy to increase rice production and exports,” he said.
Chan Sokheang, President of CRF said the rice credit guarantee package will help millers expand their businesses and use the by-products to other sectors such as aquaculture and livestock farming.
“The guarantee package is also an additional incentive for expanding exports to one million tonne per year as set by the rice production policy of the Royal Government, and we believe that this plan will be achieved by 2025,” he added.
Wong Keet Loong, CEO of CGCC, said that the scheme comes with special features – lower guarantee fees, higher guarantee covers and loan interest rate not exceeding 11 percent a year.
“We are supporting the aspirations of the government to export one million tonne of rice by 2025. This is our first tranche for the scheme and we can increase the scheme size if there is higher demand,” Wang said.
Cambodia exported more than 248,000 tonnes of milled rice in the first four months of 2024, earning a total revenue of $170 million, a CRF report showed.
The exported rice varieties included fragrant rice, white rice, parboiled rice and organic rice, among others.
