The Rural Development Bank (RBD) has disbursed more than 60 percent of the $50 million in loans in an emergency fund aimed at bolstering paddy prices, a sharp increase compared with last year, when only five percent of the money in the fund was dispensed.
More loans will be disbursed before the end of the month because harvest season is now beginning, said Kao Thach, the director-general of RBD.
“Currently, 60 percent of total loans have been disbursed. Hopefully the total amount will be distributed soon,” he said, adding that most loans have gone to rice millers in Battambang province.
In 2016, the government launched its first one-year emergency loan offer through the RDB to help the rice sector. The emergency fund for the year 2016-2017 consisted of $27 million, but for the period 2017-2018, it was increased to $50 million.
The government later announced that an extra $30 million in loans will be made available for building silos and warehouses, with the aim of stabilising the price of the commodity and protecting the livelihoods of farmers.
The loans, which had to be repaid at a five percent interest rate over a period of 10 years, were given to three different rice millers, who are building silos and warehouses in the provinces of Battambang, Kampong Thom, Prey Veng and Takeo.
While the silos are expected to come online this month, construction for the warehouses will begin in April or May, according to Mr Thach.
“Thanks to these emergency loans, we have dealt with serious issues in the sector and the price of paddy will be good this year,” Mr Thach said.
In 2017, five rice millers applied for $5 million worth of loans from the RDB with a seven percent interest rate. They had all paid the loans back by its maturity date in May.