How Paddy-i Financing Can Help Rice Planting Activities

How Paddy-i Financing Can Help Rice Planting Activities

How Can Paddy-I financing help Increase Malaysia Paddy Production

Even if agriculture in Malaysia is promising, there are a lot of challenges that been avoiding the paddy industry in Malaysia reach its full potential. Due to this, the Malaysian government has been bringing a lot of incentives and schemes to aid farmers and help them turn agriculture into business financially. And among them is a financing scheme run by the Agro Bank, Paddy-i (Tawarruq). A must know scheme for the farmers and agriculture entrepreneurs in Malaysia; today we look at everything you will need to know about the paddy-I financing.

Paddy-I Financing: What Is It All About

Paddy-I financing an uncollateralized loan financing, run by Agro Bank Malaysia that has been providing funds and market to the farmers in Malaysia for rice planting activities in a certified paddy field. The financing has been based on tawarruq, and with this scheme, the farmers can get financial assistance from anywhere between RM1,000 to RM50,000. The tenor is from six months to five years, and the rate is 3.25% every season. This program isn’t only a scheme to address the current issue of paddy in Malaysia, but also a strategy to bring in more entrepreneurs in the rice industry in Malaysia.

How Paddy-i Financing Can Help Rice Planting ActivitiesConditions

Before you apply for the scheme, here are the conditions that you will have to accept.

  • The payment of the finance will be made directly through your paddy subsidies.
  • In case the payment from subsidies are not enough, you will have to repay it from other sources.
  • You will need to save 1% of the total financing every season, and this will have to be continued until the financing term.
  • In case of natural disaster or other damage, you will need to be liable if the financing is not enough to make reimbursements.
  • This is a Tawarruq transaction. So, related authority can execute akad. Also, to receive akad, you will need to reply to any e-mails or fax. Otherwise, you won’t benefit from it.
  • Rebates will also be made in case you settle the financing before the term.
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You may read more information about starting business on guide on start business in Malaysia.

Application Procedure

All you need to do contact the nearest Agro Bank branch and apply for the financing and prove that you are a Malaysian citizen working as a farmer. Also, you will need to fill the application form with an agreement to agree with the conditions. Legal actions might also be taken if you fail to fulfil the payments, you will need to keep an eye on that.

Also, there are some fees that you will need to pay depending on the amount of financing. The stamp duty is as per the Stamp Act 1949 (Revised 1989). For every successful tawaruqq transaction, you will need to pay RM15 for a million of commodity purchasing amount as the broker fee. The Wakalah fee depends on the amount of financing and could be anywhere between RM10 and RM50.


In case you have any further queries, you could visit the nearest Agro Bank branch or contact in this address.
Bangunan Agrobank, Leboh Pasar Besar
Peti Surat 10815, 50726 Kuala Lumpur
Tel: 1-300-88-2476
Fax: 603-2691 7790

Well, this was it for the article. Hope you make use of the Paddy-I Financing.