The Malaysian cabinet has agreed to implement the Keluarga Malaysia Agrofood Financing Fund (KMAFF) under Agrobank on the 22nd June 2022 to tackle national food security issues. Announced by the Ministry of Agriculture and Food Industry (MAFI), with a total allocation of RM800 million (US$181.55 million), the fund seeks to ensure the continuity of national food production activities involving eight major food commodities: chicken, beef/buffalo, eggs, fresh milk, fish, fruit, vegetables and rice.
“Agrobank is pleased to continuously be entrusted by the government, to lead the nation’s agricultural sector through our Shariah compliant financing products and financial solutions to meet the needs of the agricultural communities including those carrying out upstream activities and up to downstream activities. Agrobank’s ongoing efforts through our full-chain financing programs are in line with the National Agro-Food Policy which aims to increase the self-sufficiency level of food,” Tengku Ahmad Badli Shah Raja Hussin, the president and CEO of Agrobank, commented.
The KMAFF program is a financing facility offered to SME entrepreneurs with a total financing of up to RM5 million (US$1.13 million) for entrepreneurs and producers of poultry, ruminant and vegetable crops. The program allocates RM100 million (US$22.69 million) for microentrepreneurs, while new microentrepreneurs and young entrepreneurs will each receive a financing distribution of RM50 million (US$11.35 million). The funds allocates RM300 million (US$68.08 million) for poultry, RM200 million (US$45.39 million) for ruminant (cattle and goats) and RM100 million for vegetable crops.
“This program offers a competitive financing period of up to 8.5 years at a profit rate of as low as 3%. In the first six months, Agrobank will automatically grant a moratorium at a profit rate of 0%. Customers will start being charged a profit rate as low as 3% only in the seventh month of financing and onwards,” Tengku Ahmad added.
The program is in line with the bank’s 2021–25 strategic business plan which covers the short-term and long-term strategic development of the MAFI for the agro-food sector as stipulated by the latest National Agro-Food Policy. The bank continues to support the strategic objectives formulated under the national agricultural development policies, which drive the strategic direction of agro-food and agricultural commodity development.
The nation is currently facing severe food security issues with the government implementing an export ban on poultry to curb record-high prices. According to the National Statistics Department, food inflation in Malaysia recently rose to a new high of 5.2% in June 2022, the highest since November 2011.