Cashew Nut Association Urges Relaxation of Loan Terms for Farmers

In response to the Cashew Nut Association’s (CAC) plea for easier loan conditions, the Agricultural and Rural Development Bank (ARDB) has di...

In response to the Cashew Nut Association’s (CAC) plea for easier loan conditions, the Agricultural and Rural Development Bank (ARDB) has disclosed plans to allocate $30 million in 2024 for cashew nut purchases. ARDB spokesperson Chan Seiha clarified that this sum is a continuation of last year's budget, not a new allocation. Seiha emphasized that the fund is not solely for cashews but also covers rice and other crops.

CAC president Uon Silot voiced concerns over the complicated loan terms, causing reluctance among members to borrow from the bank. Silot highlighted delays in loan processing, hindering members' ability to procure raw materials promptly. Silot urged ARDB and SME Bank to expedite fund disbursement and ease stringent conditions to facilitate timely loans, especially with the current decline in wet cashew nut prices.

Seiha clarified that loan approval involves assessing borrowers' repayment capacity and collateral. Lack of collateral poses a challenge for entrepreneurs seeking loans. Seiha emphasized the importance of collateral, stating that the bank can offer up to 70% of the collateral's value to borrowers. Despite the necessity for collateral, Seiha assured that the bank aims to support entrepreneurs in accessing funds for agricultural activities.

Addressing the 2024 Law on Financial Management forum, Ministry of Economy and Finance Secretary of State Phan Phalla announced government initiatives to bolster cashew production. Phalla revealed ARDB's provision of a $30 million loan to the cashew sector, with an additional $30 million earmarked for the current season. Furthermore, SME Bank has received $100 million to aid small and medium-sized enterprises in the cashew production chain.

ARDB and SME Bank apply a 5.5% annual interest rate on loans, equivalent to 0.41% per month, as per the ministry's guidelines. The government's commitment to supporting cashew production underscores its significance in the agricultural sector. With concerted efforts from financial institutions and government agencies, stakeholders aim to enhance cashew production and increase export competitiveness.

As the cashew industry faces challenges amid fluctuating market prices and loan complexities, stakeholders emphasize the need for streamlined processes and increased financial support. The collaboration between the government, financial institutions, and industry stakeholders is pivotal in driving sustainable growth and ensuring the prosperity of cashew farmers and enterprises.