Agro Padi-i Salam facility helps paddy farmers finance rice cultivation operations

Agrobank has introduced Agro Padi-i Salam, a Sharia-compliant financing facility specifically designed to assist paddy farmers in managing their cultivation operational costs more systematically, sustainably, and inclusively. This innovative product is Malaysia's first Sharia-compliant trade contract facility based on Bai' Salam.

The Bai' Salam contract allows financing to be disbursed to farmers to cover their operational expenses before the harvest yields are obtained. Datuk Tengku Ahmad Badli Shah Raja Hussin, Group President and CEO of Agrobank, stated that this financing reflects the bank's commitment to leading financial solutions that meet the genuine needs of the agricultural sector while expanding access to Sharia-compliant financing for the farming community.

"Through Agro Padi-i Salam, we hope to help farmers gain easier access to financing to manage cultivation operational costs, thereby increasing their productivity and income," he said in a statement. "This initiative also reflects Agrobank's commitment to strengthening the nation's rice and paddy ecosystem to ensure sustainable food supply for Malaysians."

“

Through Agro Padi-i Salam, we hope to help farmers gain easier access to financing to manage cultivation operational costs, thereby increasing their productivity and income.

The product is available to farmers within and outside the main paddy granary areas who have organized paddy field management systems. This includes those selling their produce to Padiberas Nasional Berhad (BERNAS), Pertubuhan Peladang Kawasan (PPK), Kilang Padi Komersial (KPK), or third-party buyers. Farmers can obtain financing ranging from RM1,000 to RM50,000, depending on the cultivated area and actual cultivation costs. The financing period is up to six months per planting season, with the facility renewable for up to five years.

Notably, the financing does not require collateral or individual guarantors, simplifying access for eligible farmers aged 18 to 70. This facility addresses the financing gap faced by farmers by enabling them to secure working capital earlier, based on their future harvest. Ultimately, it supports the continuity of paddy cultivation and strengthens the nation's food security.

“

This initiative also reflects Agrobank's commitment to strengthening the nation's rice and paddy ecosystem to ensure sustainable food supply for Malaysians.