MICROCAPITAL BRIEF: IFAD, Cambodian Government, Private Sector Investing $60m in Microfinance, Infrastructure Program to Help 15k Farming Families Expand Operations

The government of Cambodia recently announced it has commenced the first phase of a project intended to aid 15,000 small-scale farming families in growing their operations by “building infrastructure to help farmers, and offering special microfinance deals.” Of the USD 60 million budgeted for the project, USD 36 million is on loan from the UN’s International Fund for Agricultural Development (IFAD), USD 8 million has been committed by the Cambodian government and the remainder is “coming from the private sector.”

Among the goals of the program, which is scheduled to run until 2023, is to reduce the nation’s agricultural trade imbalance by “improv[ing] Cambodian farmers’ competitiveness, especially internationally.” One of the strategies for accomplishing this is facilitating farmers’ access to loans from three participating microfinance firms, Amret, Lanka Orix Leasing Company (LOLC) and Prasac.

Amret was established in 1991 as a project of French NGO Groupe de Recherche et d’Echange Technologiquess under the name Ennetean Moulethan Tchonnebath, which translates to “rural credit.” Amret became a private limited company in 2000 and as of 2016 reports to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 659 million, a gross loan portfolio of USD 565 million and approximately 294,000 borrowers. As of the same date, the company reported USD 287 million held in approximately 294,000 deposit accounts.

LOLC (Cambodia), which was founded in 1994 as Thaneakea Phum by US-based NGO Catholic Relief Services, is a unit of Sri Lanka’s LOLC, which is a member of the Japanese conglomerate Orix. LOLC (Cambodia) is 37-percent owned by US-based Developing World Markets and 3-percent by staff of the institution as of 2017. As of 2015, it reports a gross loan portfolio of KHR 1.88 trillion (USD 46 million) to a client base of approximately 220,000.

Prasac was founded in 1995 as the credit component of an EU-funded agricultural support program of the Cambodian government. It was registered in 2004 as a private limited liability company and is licensed by the National Bank of Cambodia to offer financial services including credit, bill payment, funds transfer, payroll services and savings. As of December 2016, Prasac reported total assets of USD 1.25 billion and a gross loan portfolio of USD 1.03 billion outstanding to 347,000 borrowers. As of the same month, Prasac reported USD 619 million held for 572,000 depositors and net annual profit of USD 54 million. As of 2016, 85 percent of Prasac’s borrowers are women.

Established in 1977, IFAD is dedicated to eradicating rural poverty in developing countries. IFAD disbursed new commitments of USD 823 million during 2016, bringing its portfolio of ongoing projects to approximately USD 10 billion. IFAD operates in approximately 100 countries as of 2016.

By Jacob O’Driscoll, Research Associate

Sources and Additional Information

Government Launches $60 Million Project to Help Small Farmers
http://phsarpp.com/threads/government-launches-60-million-project-to-help-small-farmers.19870/

Amret
https://amret.com.kh/

IFAD
https://www.ifad.org/

LOLC
http://lolc.com/

Prasac
https://www.prasac.com.kh/

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