Malaysia's Agrobank Wins Karlsruhe Sustainable Finance Award

KUALA LUMPUR, July 15 (Bernama) -- A Malaysian-government owned bank, Agrobank received 'Outstanding Sustainable Project Financing' award at the Karlsruhe Sustainable Finance Awards 2016 for its success in Paddy-i financing. President and Chief Executive Officer of Agrobank Malaysia Wan Mohd Fadzmi Wan Othman accepted the award, on behalf of the bank, in a ceremony held in Karlsruhe, Germany, on Thursday. An Agrobank statement said the features and benefits of the Paddy-i financing significantly helped paddy farmers increase their output and their income. "The amount disbursed between 2006 and 2015 stood at US$93.81 million (RM370.53 million), thus benefitting 84,970 farmers, nationwide. "We are proud that the scheme achieved satisfactory collection rate from 97 per cent to 100 per cent per season. This demonstrated Agrobank's ability to offer structured financing to the unserved and underserved community. "Most of our customers will subscribe to Paddy-i for a period of 5 years or 10 paddy planting seasons," Wan Mohd Fadzmi was quoted as saying in the statement. The Paddy-i financing, formerly known as the Paddy Credit Scheme, was first introduced in 1970 and has been vital in the development of commercialised and progressive paddy plantation in Malaysia. "It was the first financing customised to meet the needs of paddy farmers since then and remains the first of its kind in Malaysia. "Paddy-i is a financing that is designed to cater for seasonal income earners of paddy farmers," the bank said. It said under normal commercial financing practices, paddy farmers would not have easy access to financing due to the nature of paddy planting where the cash flows for repayment are seasonal and the plantation is susceptible to paddy price risks, adverse weather and excess supply. --BERNAMA