BAAC aims for B100bn in new loans

BAAC aims for B100bn in new loans

The state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) will aim for 100 billion baht in new lending during its next financial year.

The bank will shift lending focus to communities, groups and households and away from individuals as is currently practised, said president Apirom Sukprasert. The BAAC also wants to cooperate with the Industry Ministry on a scheme to create 100,000 smart farmers.

The BAAC's new loans are estimated to reach 60 billion baht in this financial year, which ends March 31, 2020, down significantly from 95 billion baht the previous year.

The bank's debt repayment suspension scheme for farmers and drought conditions dented loan demand, Mr Apirom said.

To comply with government policy for the BAAC to support the rural economy, the bank will adjust the loan criteria to serve family-based lending, as opposed to an individual approach.

Offering loans using a family-based approach will let the state-backed farm bank take care of rural people in a more comprehensive way, as some family members are not farmers, Mr Apirom said. The new criteria will enable the bank to offer non-farming loans.

To match rural people's needs, the BAAC plans to have officials carry out a survey, he said.

The BAAC, the Industry Ministry and the Office of the Cane and Sugar Board are cooperating to eliminate sugar-cane field burning within three years to help tackle the dust pollution problem.

Under the cooperation, the bank is offering loans to buy sugar-cane harvesters.

If people in a community jointly purchase sugar-cane harvesters, they can seek loans with interest rates of 0.01% from the bank. For small and medium-sized farming enterprises, they are qualified to apply for a loan with an interest rate of 4% for three years.

Individual farmers can borrow from the bank, but the rate is higher: the minimum retail rate minus one percentage point, equivalent to 5.675%.

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