Agriculture and Rural Development Bank of Cambodia (ARDB) expects to receive an additional $30 million from the government for special-purpose loans to keep the Kingdom’s smaller businesses afloat amid the ongoing economic duress of Covid-19, according to the state-owned bank’s director-general Kao Thach.
Thach told The Post on March 22 that ARDB recently submitted a request to the government for the additional funds after the bank earlier this year finished disbursing $50 million that was supplied by state coffers in 2020.
He noted that fruit and vegetable growers, livestock farmers and aquaculturists received the bulk of the $50 million and put in steadily-increasing numbers of loan applications to increase their cultivation and expand their businesses.
“We’ve asked for an additional $30 million as there is growing demand. We’ll continue to encourage farmers who need more capital to contact ARDB for these loans,” Thach said.
Propping up the Kingdom’s farmers is ARDB’s contribution to undergirding the government’s drive to ramp up domestic agricultural production, ensure food security and boost export capacity, he said.
“We’re requesting additional loans from the government to continue providing low-interest loans to farmers in these sectors,” said Thach.
Lim Sokheng, owner of a fish farm in Phnom Penh’s northernmost Prek Pnov district, said the relatively low interest rates had piqued his interest in applying for a special loan at ARDB.
He said a positive reply from the government would provide access to loans for many more aquaculturists to ramp up production and cushion some of the economic fallout from the pandemic.
“This will breed a lot of opportunities for those who need capital to keep their businesses from going under,” he said.
ARDB said in a recent statement that the loans aim to increase production chains and maintain competitiveness in the small- and medium-sized enterprise sector amid Covid-19 and the partial withdrawal of the EU’s Everything But Arms (EBA) trade scheme.
On August 12, the European Commission officially withdrew 20 per cent of the EBA scheme from Cambodia. The suspension affects one-fifth or €1 billion ($1.19 billion) of the Kingdom’s annual exports to the bloc.
ARDB currently offers loans 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.
It also adjusted the maximum loan term from five to seven years for capital investment while retaining a short-term maximum of two years for working capital.