The state-owned Small and Medium Enterprise Bank of Cambodia Plc (SME Bank) and AgriBee (Cambodia) Plc have entered into a partnership aimed at “enhancing and developing” the agricultural production sector through collateral-free, low-interest rate financing.
The two companies signed a memorandum of understanding (MoU) on April 11 to provide financing to agricultural production chain players introduced by AgriBee (Cambodia) Plc, with “favourable terms and low-value credit” to be offered.
The financing would be made available to businesses or individuals that are suppliers of agricultural inputs, traders, processors, wholesalers and retailers.
The funding is said to be worth up to $500,000 and aims to “facilitate the sharing of information on access to finance” for SMEs in Cambodia.
SME Bank CEO Lim Aun said the bank was “very pleased” to cooperate with AgriBee to help “bolster and accelerate the development process” of SMEs in Cambodia in line with the government’s goal of boosting economic growth.
He added that this partnership will bring “great value” to enterprises and businesses that support, supply and depend on agricultural yields. They will be able to receive financing for working capital or capital investment with favourable terms and “many other credit benefits”, he said.
“Through this enormous partnership from financial and target institutions, SME Bank hopes that all SMEs in Cambodia will be able to apply for funding and recover from the Covid-19 crisis, and play a key role in boosting economic activity and spurring overall economic growth.”
AgriBee chairman Mak Chamroeun said that with more than two million households engaged in agriculture, the sector in Cambodia is now considered a priority, with great potential to contribute to “building and boosting” the national and local economies.
In the rice sector alone, more than $900 million is needed for cultivation and about $2 billion is needed for harvesting and processing, he said.
“Through this cooperation, AgriBee will provide additional financing support, focusing on key players such as agricultural input depots, farmers, traders and milled rice distribution depots, which are essential players in the production chain to help boost the local economy as well as improve the livelihoods of farmers,” Chamroeun said.
He said that the partnership between AgriBee and SME Bank to provide financing to agricultural production actors – especially SME clusters in the AgriBee production chain – will help make the agricultural sector stronger and reach a “higher level”.
Under the MoU, SMEs in AgriBee’s production line will receive loans with a low interest rate of six per cent per annum and loans of up to $50,000 without the need to put up any collateral, he added.
Chamroeun also shared that there are 11 agricultural cooperatives under Agribee, noting that 2020 agriculture ministry statistics indicated that there are 1,500 nationwide comprising 300,000 households.