The Bank for Agriculture and Agricultural Cooperatives will launch a 15 billion baht credit line to support the liquidity of farm institutions and rubber processing.
Somsak Kangteerawat, the bank’s senior executive vice president, said the credit line is for two projects: 10 billion baht for increasing liquidity for farm institutions to buy rubber from farmers; and five billion baht to support farm institutions in rubber processing.
The approval came following an order from the National Council for Peace and Order.
There are 723 farm institutions nationwide that want to borrow from the BAAC. They include 466 rubber-fund cooperatives, 189 agricultural cooperatives and 68 farmer groups.
To start, the bank approved 2.88 billion baht in loans for 281 cooperatives to purchase rubber. It plans to release another four billion baht in September, two billion in October and one billion in November. The loans became available this month and the program will continue until June. Cooperatives have to repay the funds within 12 months at 1% interest per annum, while the government will subsidise three percentage points in of interest.
Regarding its support of rubber processing, Mr Somsak said the bank will start lending to 24 high-potential cooperatives that have experience in collecting rubber and primary processing. They will create a network covering five rubber-plantation regions in provinces including Chon Buri, Buri Ram, Surat Thani and Yala.
The bank has about 360,000 rubber-farmer clients who borrowed about 40 billion baht. With the rubber prices plummeting, they have faced difficulties in repaying loans, so the BAAC has allowed them to readjust or extend payment periods.
– bangkokpost.com
