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Board’s Statement

Chairman Speech
The global economy is confronting with Covid crisis in 2020. This crisis has not only claimed many lives but also puts more burden on health system and disrupts global economic activities particularly in service sector. In response to this crisis, some countries have imposed stringent measures in order to reduce number of infected cases.


International Monetary Fund (IMF) estimates that global economy growth is declined to    -3.3% in 2020 but it is forecasted to recovery at 6% in 2021 and 4.4% in 2022 given that some countries can control the spread of infection and some measures will be gradually lifted which allow economic activities to function again. Advanced economies plummeted to -4.7% in 2020 but this growth is predicted to reach 5.1% in 2021 and 3.6% in 2022 while the growth of emerging and developing economies recorded -2.2% in 2020 but it will rebound to 6.7% in 2021 and 5% in 2022.


The rapid spread of pandemic has negative impact on Cambodia economy, witnessed by declining growth rate of -3.5% in 2020 due to severe impact on main sectors based on to Ministry of Economy and Finance data. Garment sector registered a negative growth rate of 8% due to less demand from international market as global economy remains weak. Construction sector dropped to -3% while real estate activities declined to -4.3% due to fading of confidence in the market. Service sector sharply decreased to 7.9% owing to traveling restriction and the postpone of some flights aiming at reducing the spread of Covid-19. However, agriculture sector managed to have a positive growth rate of 0.3% (year-on-year) as a result of restricted imports by some countries. Amid the unprecedented growth in 2020, growth is forecasted to recovery to 4.3% in 2021 and 5.5% in 2022. Similarly, Asian Development Bank (ADB) estimated that Cambodia economy will improve in 2021 with the growth rate of 4% due to demand from Cambodia major trading partners. Industrial production will grow at 7.1% in 2021 and 7% in 2022 given the improvement in garment, footwear and travelling goods.  Agriculture is expected to grow at 1.3% in 2021 and 1.2% in 2022 underpinned by higher crop plantation after affected from last year’s flood, growth of aquaculture and demand of export of agricultural products to the Republic of China. Nevertheless, service sector is predicted to recovery with 3.3% growth rate in 2020 and 6.2% in 2022 due to lockdown measure and travelling restriction against pandemic outbreak. Real estate sector which has the same trend with construction is expected to improve.


In response to the pandemic, the Royal Government of Cambodia under the leadership of Samdech Akka Moha Sena Padei Techo Hun Sen, Prime Minister of the Kingdom of Cambodia, has laid out fiscal policy including tax exemption on affected sectors, releasing social protection package to support lifeline of the poor family and vulnerable population by means of cash transferred, and providing special fund program to support agriculture sector. Moreover, the Royal Government requested banking and financial institutions to delay loan payment and allowed loan restructure upon customers request.


ARDB functioning as a commercial bank and a policy bank has actively engaged with development of agriculture sector and rural development under the framework of economic policy development of government agenda. In 2020, ARDB received 50 million USD as special fund from the Royal Government, which was a part of the intervention package from the government in response to Covid crisis. This fund aimed to support Small and Medium Enterprise (SMEs) in agriculture sector, agro-processing and agri-business for vegetable and fruit planation, aquaculture, raising livestock by providing loan with low interest rate and this allows SMEs to expand their business and improve their value chain which contributes to job creation and strengthen local product. As of December 2020, ARDB disbursed loan of USD 245 million which is growth by 41.62% (year on year). This loan portfolio has been provided to rice sector, and diversified to other sectors including vegetable-fruit plantation, aquaculture and other subsector (rubber, pepper, casava, cashew nut, coffee, mango, etc.).


In line with Three-Year Business Plan Strategy ARDB plans to provide loan amounting to 307 million USD in 2021, of which loan to rice sector will be accounted to 48% of total loan portfolio and diversify to other sub-sector besides rice (rubber, mango, cashew nut, casava and coffee etc) 23%, raising livestock 9%, vegetable and fruit 8%, aquaculture 4%, Microfinance institution 2% and other 6%.


In the face of this critical period, the infection arising from pandemic will continue to prolong as new waves of the outbreak persist. Therefore, adapting to new normal in line with health instruction and new technology is very important for banking and financial institution and other business entities to sustain business operation. In this context, developing digital product and services by offering low transaction cost, high security, fast speed, and accessible everywhere and every time becomes significant strategy to serve customers.


Taking this opportunity, as a Chairman, I would like to express my gratitude to Samdech Akka Moha Sena Padei Techo Hun Sen, Prime Minister of the Kingdom of Cambodia who laid out a lot of effective measures to fight against Covid-19 and my profound thanks you to management of ARDB who has put your tremendous to support agriculture sector in Cambodia during the pandemic.

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