CEDAC welcomes rate cuts by MFIs

The Phnom Penh Post
Wednesday, 09 September 2009 15:01 Nguon Sovan

CAMBODIA'S largest farming NGO Tuesday welcomed the recent decision by microfinance institutions (MFIs) to reduce interest rates by up to 0.5 percent per month.

"The cut will help farmers earn profits from the money they borrow from MFIs that is used to invest in farming," Yang Saing Koma, president of the Cambodian Centre for Study and Development in Agriculture, said in a press statement.

The previous monthly rate of between about 2.3 percent and 2.85 percent had proved a major challenge to agricultural profitability while limiting farmers' investment, he said, and hurting competitiveness with neighbouring countries.

Yang Saing Koma added that interest rates should by lowered further - only at below 1 percent per month would farmers be able to sustain profitability, he said.

Uon Sophal, president of another agricultural NGO, Farmer and Nature Net, said farmers had struggled to repay loans at rates above 3 percent per month. "They were forced to sell property to repay debts," he said.