Farmers can seek low-interest loans to trim production costs after ARDB deal

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Batches of cassava are loaded on to trailers pulled by two-wheel agricultural tractors, and bound for the drivers’ hometown in Banteay Meanchey province. Heng Chivoan

Agricultural communities can look towards reducing production costs via low interest loans following a subsidiary loan agreement between state-owned Agricultural and Rural Development Bank (ARDB) and three financial institutions.

The agreement was signed with one commercial bank and two microfinance institutions (MFI) – Cambodia Post Bank Plc, Chamroeun Microfinance Plc and AMK Microfinance Institution Plc – under the Cambodia Agricultural Sector Diversification Project (CASDP) on August 15.


The agreement is aimed at propping up the agricultural sector, a mainstay of the Cambodian economy, at a time when the world is facing a food crisis.

Cambodia Rice Federation president Song Saran told The Post on August 16 that the financing scheme reflected the government’s commitment to ensure low-interest financing for farmers and farming communities.

“I see this as good news under the new financing context, which shows that the government is committed to working with financial institutions such as microfinance institutions which are located close to agricultural communities, as well as farmers, to provide easy and efficient financing.

“I support the fact that ARDB has set out this policy to help the farming community as much as possible, enabling them to access appropriate financing at an appropriate interest rate,” Saran said.

Mak Chamroeun, chairman of AgriBee (Cambodia) Plc, also praised the government institution and financial institutions for their efforts in financing the agricultural sector.

“I believe that providing low-interest loans to farmers or to key players in the agricultural sector is necessary to keep the cost of farmers’ agricultural products low, allowing them to be competitive in the market,” he said.


ARDB deputy director-general Chan Seiha told reporters at the event that CASDP has a capital of $30 million, which is funded by the World Bank to focus on agriculture, except rice for five years.

“We have collaborated by providing our three partners with us being the principal so they can work directly [with the farming communities],” he said.

Seiha said the “wholesale” loans provided by the ARDB to the three financial institutions are at an interest rate of five per cent per annum, with no service charge.

“However, the interest rate that the three institutions provide to customers depends on the policy of each institution, the farmers and the actual farming community,” he added.