Opinion

How Cambodia’s agricultural lending can get a bigger bang for its buck

Agriculture remains an important sector in the developing world. In Cambodia, it is one of the top three economic sectors. But for a long time the sector has faced several critical barriers. One such barrier is the gap between farmers and financial support, and the failure of the Agricultural and Rural Development Bank (ARDB) grant-credit program to bridge it.

The ARDB is a public bank that aims to contribute to the development of agriculture and the rural economy. But the bank seems to be moving away from this goal.

The bank’s subsidies have focussed mainly on rice (76 per cent of total credit in 2019), especially funding for rice storage, drying facilities and collecting purchase paddy from farmers. Yet most of the firms that receive ARDB funding are medium-sized enterprises that are operated by knowledgeable people who are able to independently find funding sources from private banks and who are members of the Cambodia Rice Federation. These firms collect fragrant paddy and are exporting rice to markets around the world.

In full: https://www.eastasiaforum.org/2021/05/29/how-cambodias-agricultural-lending-can-get-a-bigger-bang-for-its-buck/

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