Industry Events

20-03-2020

Special Financing Loan of Royal Government of Cambodia via the Agriculture and Rural Development Bank

On March 16, 2020, the Agriculture and Rural Development Bank held a Press Conference at its Head Quarter near Wat Botum Padey in Phnom Penh. This Press Conference included both the Memorandum of Understanding between the Agriculture and Rural Development Bank with the Private Sector, represented by the Young Entrepreneurs Association of Cambodia, the Cambodian Women Entrepreneurs Association and the Cambodian Investors Club, and the Official Launch of Governmental Financial loan via the Agriculture and Rural Development Bank at low-interest rates for sectors of agricultural processing products, agro-industry and agriculture sector (excluding handicrafts, small and medium-sized enterprises in the field of rice). The event was attended by HE Kao Thach, Director General of the Agriculture and Rural Development Bank, as well as by several private sector representatives represented by the Cambodian Food Manufacturer Association, the CEO Master Club and the Federation of Association for SMEs of Cambodia.

The Memorandum of Understanding (MoU) is aimed at providing a $ 50 million Government Special Financing Loan on a Collaborative Framework for the Support of Small and Medium Enterprises for sectors of agricultural processing products, agro-industry and agriculture to strengthen and expand the local production base as well as stimulate the economy, creating new jobs for people and next-level advancement for 2020.
All applications for this special financial loan under this Special Financing Scheme such as SMEs and handicrafts in the sectors of agricultural processing products, agro-industry, and agriculture will be evaluated based on the following minimum and responsive conditions:

1. Characteristics of target customers
   • Producers, owners of small and medium-sized enterprises, agricultural communities in the production chains of agricultural and agro-processing products
   • The agricultural community, producer groups and owners of medium-sized farms on vegetable, fruit, livestock, and aquaculture; and
   • Owners of enterprises that export processed and semi-processed products from agro-industry and food products from agricultural products.
2. Requirements
   • Agricultural communities, producers, and owners of medium/large-scale farms that grow vegetables, fruits, livestock, and aquaculture, as recognized by competent or professional institutions/authorities.
   • Expansion plans that can create at least 5 to 30 new jobs
   • Must be the local producers with compliant registration and compliant with VAT-tax payment
   • Truly required new loan for working capital and/or expansion capital
   • At least 2 years of relevant business knowledge and experience
   • Have personal capital contributing at least 20% of the value of the business plan
   • Credit can be given up to 80% of loan collateral. Loan collateral is also much more flexible by considering equipment/plant, machinery, inventory, account receivables, guarantees, or certificates of deposit as well.

Eligible target customers who meet the above requirements may apply for the two following types of credit:

1. Credit for working capital
   • 1.1 Loan Use: Collect/buy the processed agricultural products, grow vegetables or fruits, raise livestock, do aquaculture
   • 1.2 Loan size: US $ 10,000 to US $ 200,000 or not more than four times the capital of the counterparty
   • 1.3 Loan repayment period: 2 years or less
   • 1.4 Annual interest rates: 6% in USD and 7% in Khmer Riel
   • 1.5 Service Charge: 1% of approved loan size
   • 1.6 Repayment Method: Interest paid on a monthly basis. The principal can be paid either at the end of the loan period or by installment according to cash flow analysis.
2. Credit as an investment
   • 2.1 Loan Use: Purchase production plants, equipment, construction of factories or production facilities related to the production or processing of agricultural products, agro-industry, food, and feed products
   • 2.2 Loan size: US $ 10,000 to US $ 300,000 or more than four times the capital of the counterparty
   • 2.3 Loan repayment period: 5 years or less
   • 2.4 Annual interest rates: 6.5% in USD and 7.5% in Khmer Riel
   • 2.5 Service Charge: 1% of approved loan size
   • 2.6 Repayment Method: Interest paid on a monthly basis. There may or may not be a grace period on the principal repayment of the first year depending on the client’s cash flow. Monthly, semi-annual or yearly installments or the principal based on cash movement

The above-mentioned financing loan has unique characteristics and sensibility with the targeted customers. It is worth mentioning that based on the Royal Government’s intensive support for the private sector, the Agriculture and Rural Development Bank may consider the minimum types of documents required to submit for their loan request on a case-by-case basis if the client is in the area of priority sector after loan request studied. For the private sector representatives in the Memorandum of Understanding, the Young Entrepreneurs Association of Cambodia, the Cambodian Women Entrepreneurs Association, and the Cambodian Investors Club will act as consultants on the requirements of documents and readiness for financial requests and consult on the effectiveness of loan usage plans.

For More Information, please contact the Agriculture and Rural Development Bank

• Address: #9-13, St 7, Sangkat Chaktomuk, Phnom Penh, Cambodia
• Phone: 855 023 220 810/811
• Fax: 855 023 224 628
• Email: [email protected]
• Facebook Page: https://www.facebook.com/Agricultural-and-Rural-Development-Bank-of-Cambodia-757960634247606/
• Website: http://www.rdb.com.kh/

News Source: the Agriculture and Rural Development Bank