Monday, 20 September 2010 15:00 Chun Sophal
THE state-run Rural Development Bank anticipates US$100 million in requests for credit to purchase paddy this year, dwarfing the $36 million in financing committed by the Cambodian government.
Some 150 companies and rice associations are expected to request $100 million in loans to purchase rice for milling. The amount would more than double the $46 million in requests made by 300 companies last year, bank chairman Son Koun Thor said yesterday.
“The desire for loans to process rice for export started to increase after the government unveiled new policies for boosting rice production in August,” he said.
On August 17, Prime Minister Hun Sen announced that the government would guarantee 50 percent of commercial bank lending to rice producers in a bid to increase Cambodia’s exports of the grain to a million tonnes by 2015.
The government has worked hard to increase exports of milled rice, according to Son Koun Thor, as it brought in more income than paddy exports.
Rural Development Bank’s lending contributes to the purchase of 10 percent of the country’s excess paddy, according to Son Koun Thor.
The bank will receive $36 million in state financing this year, double last year’s contribution, officials announced earlier this year.
Kampong Cham Province Rice Mills Association president Suor Kheang said that his association already possessed US$5 million to purchase paddy, but that it was not enough to purchase all the excess grain produced in the province.
The association would seek an additional $1 million in loans from the Rural Development Bank, he said.
“We hope the association will be successful,” he said. “The government wants excess production to be milled and exported more in the future.”