KUALA LUMPUR (Dec 30): Agrobank said the outlook for agriculture sector in 2016 is positive and promising, and it would provide financing to businesses that invest in technology to increase productivity through various programmes at an attractive profit rate of 3.75%.

According to Agrobank President and Chief Executive Officer Datuk Wan Mohd Fadzmi Wan Othman, agriculture is still a key factor for economic growth, with rising demands for local and export market particularly for agro-food sector.

“Under the 11th Malaysia Plan, agriculture gross domestic product (GDP) is projected to achieve RM93.2 billion and the figure is estimated to reach RM110.7 billion in the year 2020.

“The Ministry of Agriculture and Agro-based Industry (MOA) is very committed to address the trade balance deficit of RM17 billion recorded and lessen the country’s dependency on food imports. The ministry is developing various plans to increase Malaysia’s Self Sufficiency Level (SSL) for food,” he added in a statement today.

Agrobank is one of Malaysia’s leading banks, providing a holistic array of financial services and banking facilities, with a focus on agriculture.

It is a Government-owned Corporation (GOC) under the purview of the Minister of Finance Incorporated.  

Agrobank believes that technology is the solution towards increasing food and agriculture products productivity and is keen to support businesses in using technology, in order to increase their productivity.

Wan Mohd Fadzmi said the allocation of RM5.3 billion in Budget 2016 as announced by the Prime Minister in October 2015 to modernize the agricultural sector, demonstrates the government’s strong commitment to transform the agriculture sector for much higher productivity and operates commercially.

He explained that for businesses to invest in technology, access to funding/financing is essential.

“As a bank that understands agriculture better, Agrobank provides a comprehensive financing solution for agriculture that includes financing for upstream activities, such as the supply of agricultural production inputs; to downstream activities, such as processing and selling of agricultural products to consumers.

“For Agrobank, we will support and finance any viable business and projects related to agriculture sector,” he explained further.

According to him, Agrobank covers 10.43% for financing in primary agriculture in this country, as at November 2015.

As for financing for agro-food sector, he added, Agrobank’s share is quite promising, with a total value of RM2.73 billion or 23.62% share of total outstanding loan worth RM11.57 billion in the banking system, as at November 2015.

In support of government initiatives to increase food production, Agrobank also has various financing programs that aim to assist agropreneurs in expanding their businesses, such as Fund For Food (3F). These financing programmes come with attractive profit rate, which is as low as 3.75% per annum.

“There are indeed huge opportunities in agriculture, as we aim to improve our SSL and reduce our import dependency for food. In addition, there is also a massive opportunity to export our food products to ASEAN market and also global halal market,” said Wan Mohd Fadzmi.

“As of 2014, the ASEAN market was worth over US$1.4 trillion in total consumer expenditure, and it covers food and agro-product items.

“As for halal food market, it is worth approximately US$632 billion (RM2715 billion) or 16% of the global food industry, and Malaysia is a trusted brand for halal food.

“There is indeed a lucrative export market for a wide range of agricultural products for ASEAN and halal market. With its huge potential and prospects, the outlook looks positive for business in agriculture,” he added.