RDB unveils new identity

Sok Chan / Khmer Times No Comments Share:
More than 50 percent of RDB’s total loans went to the country’s rice sector. Reuters

The state-owned Rural Development Bank on Monday announced it will rebrand as the Agriculture Development Bank within the next couple of years, offering a wider range of funds and banking services.

RDB chief executive Kao Thach said the bank will strengthen and expand its operational zones by establishing more branches and mobile units in the provinces.

It will also seek more capital from government and development partners to make the transition and begin offering new services, he said. 

“We are preparing to transform the bank and are conducting studies on the issue. The agriculture industry is big and absorbs more than 50 percent workforce, so we have to take care of the sector,” Mr Thach added.

“The agriculture sector contributes 30 percent of GDP and plays an important role in the Cambodian economy. In the next two or three years, we will become the Agriculture Development Bank and then transition to be the Development Bank Universal in future.”

Mr Thach said wide-ranging reforms at the bank will improve good governance and structural management. He said these will be done through the use of ICT, with better human resources and sound training policies.

Also to be improved, he added, are better risk audit and risk management practices.

Heng Pheng, president of Sea Heng Rice Mill and vice-president of Cambodia Rice Federation, welcomed the move, saying it would help rice mills access loans easily.

He added that when rice prices dropped last September, RDB helped stabilise the market.

“Some commercial banks also offer loans to rice mills, but this funding is more difficult to access. All rice millers will have a choice between the state-owned Agriculture Development Bank and commercial banks once it is operational,” Mr Pheng said.

So Phonnary, executive vice-president of Acleda Bank, said that having a specialised agriculture bank will not only offer loans to the sector but support skills development.

But she said Acleda Bank still offers loans to everyone from smallholder farmers to medium and large, rice mills, and rice exporters.

“Acleda Bank provided $563 million in loans to the agriculture sector in the first half of this year. That is about 41 percent of the total loan portfolio of Acleda Bank, with 150,000 out of 377,000 customers,” Ms Phonnary said. 

Mr Thach said the Agriculture Development Bank will be the leading provider of services related to rice mills, rice warehouses, silos and grain banks, processing factories, microfinance institutions, agricultural cooperative communities and fertiliser suppliers.

According to RDB, the bank provided $73.8 million in loans from January to June, or about five percent of total commercial bank loans to the agriculture sector in Cambodia.

Loans to the rice sector made up 54 percent of total RDB lending, while 21 percent went to cassava, pepper, corn and rubber sectors. Five percent of RDB loans were made out to MFIs.

Investment in rice sector infrastructure was four percent, while 16 percent went to animal feed and other areas of the industry.

Recently, the government injected another $23 million to the RDB to provide loans to rice mills and exporters who lack working capital to buy rice from farmers in the upcoming harvest season.

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