ID :
15827
Thu, 08/14/2008 - 09:34
Auther :
Shortlink :
http://m.oananews.org//node/15827
The shortlink copeid
BANKS RELUCTANT TO LEND TO AGRO SECTOR BECAUSE OF RISK FACTORS
KUALA LUMPUR, Aug 14 (Bernama) -- Risk factors and lack of marketing strategies are among the reasons why commercial banks are reluctant to give out loans for agro-based projects, said Agro Bank chairman Mohamed Salleh Bajuri.
He said poor marketing led to agricultural produce being damaged before itreached the market place.
"How can these banks give out loans to them (agro-based projects) when theyfind that agricultural produce is always damaged as it reaches the market late.
As such, farmers lose money. Definitely, the banks lose confidence in them... wecannot blame them (banks)," he said when contacted by Bernama Wednesday.
He was commenting on Prime Minister Abdullah Ahmad Badawi's remarks that some banks were still doubtful about giving out loans for agro-basedprojects.
Mohamed Salleh said if the marketing network was efficient, excess produce could be sent more quickly to places where the demand was high, thus enabling itto be sold systematically.
He said fluctuation in the prices of agricultural produce resulted infarmers not getting consistent earnings.
"If the price drops, they (farmers) cannot afford to repay their creditors,what more if they are operating on a small-scale," he said.
Mohamed Salleh said those involved in the agricultural sector also lacked initiatives when confronted with the dumping of agricultural produce especiallyfruits.
Commercial banks were also concerned about weather uncertainties as theyaffected the cultivation of crops, he added.
He said to win the confidence of commercial banks, the Federal Agricultural Marketing Authority (Fama) had to device efficient marketing strategies to ensure that agriculture produce reached the market on time and this wouldprevent farmers from losing money.
On Agro Bank, he said it gave out 70 per cent of its loans to farmers through the padi credit scheme, graduate agroentrepreneur scheme, foodproduction credit scheme, and bumiputera industrial and trade community scheme.
He said poor marketing led to agricultural produce being damaged before itreached the market place.
"How can these banks give out loans to them (agro-based projects) when theyfind that agricultural produce is always damaged as it reaches the market late.
As such, farmers lose money. Definitely, the banks lose confidence in them... wecannot blame them (banks)," he said when contacted by Bernama Wednesday.
He was commenting on Prime Minister Abdullah Ahmad Badawi's remarks that some banks were still doubtful about giving out loans for agro-basedprojects.
Mohamed Salleh said if the marketing network was efficient, excess produce could be sent more quickly to places where the demand was high, thus enabling itto be sold systematically.
He said fluctuation in the prices of agricultural produce resulted infarmers not getting consistent earnings.
"If the price drops, they (farmers) cannot afford to repay their creditors,what more if they are operating on a small-scale," he said.
Mohamed Salleh said those involved in the agricultural sector also lacked initiatives when confronted with the dumping of agricultural produce especiallyfruits.
Commercial banks were also concerned about weather uncertainties as theyaffected the cultivation of crops, he added.
He said to win the confidence of commercial banks, the Federal Agricultural Marketing Authority (Fama) had to device efficient marketing strategies to ensure that agriculture produce reached the market on time and this wouldprevent farmers from losing money.
On Agro Bank, he said it gave out 70 per cent of its loans to farmers through the padi credit scheme, graduate agroentrepreneur scheme, foodproduction credit scheme, and bumiputera industrial and trade community scheme.
