IFC Helps Expand Financing for Rural Enterprises and Agribusinesses in Cambodia

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Apr 2015
Cambodia, April, 02 2015 - IFC, a member of the World Bank Group, together with the Global Agriculture and Food Security Program (GAFSP), is providing a syndicated loan of up to $110 million to ACLEDA Bank Plc. to promote financing to rural and micro businesses, especially those in the agricultural sector.

With IFC’s financing, ACLEDA Bank Plc. aims to provide more than $250 million in loans to about 60,000 agricultural enterprises by 2019.

The financing package comprises $40 million from IFC’s own account; $20 million from the GAFSP Private Sector Window, a donor-funded program managed by IFC; a $30 million loan provided by the Singapore branch of Japan’s Sumitomo Mitsui Banking Corporation through IFC’s syndicated loan program; and $20 million through the IFC Managed Co-Lending Portfolio Program, a new syndications platform that offers institutional investors the ability to passively participate in IFC’s future senior-loan portfolio.

The long-term loan will help ACLEDA Bank Plc., Cambodia’s largest bank by assets, increase its lending mainly to agribusinesses, which make up a third of all small and medium enterprises in the country and account for about half of total SME financing needs. Lending to the agricultural sector represents just 9.7 percent of Cambodian banks’ entire loan portfolio, according to IFC.

“Extending financial services to micro borrowers and smaller businesses is a pillar of ACLEDA Bank Plc.’s growth and expansion strategy,” said In Channy, President & Group Managing Director of ACLEDA Bank Plc. “We appreciate IFC’s support in mobilizing other international lenders to provide much-needed long-term funding for us to realize our strategy.”

ACLEDA Bank Plc. has been a longstanding IFC client since our initial equity investment in the bank in 2000. The partnership has enabled ACLEDA Bank Plc. to reach more than 300,000 of the poorest people in Cambodia and support micro and small businesses throughout the Mekong region.

“IFC shares ACLEDA Bank Plc.’s strong vision and commitment to providing financing to small and medium enterprises as well as individuals,” said Adel Meer, IFC’s Financial Institutions Group Manager for East Asia and the Pacific. “Access to long-term and affordable funding will help agribusinesses increase employment, improve export earnings and ensure food security for the Cambodian people.”

Globally, IFC invested $4 billion across the agricultural value chain in 2014. IFC’s agribusiness strategy aims to promote inclusive growth and environmental and social sustainability in agricultural supply chains.

Donor partners to the GAFSP Private Sector Window are Canada, Japan, the Netherlands, the United Kingdom, and the United States. This funding makes it possible for IFC to invest in riskier projects with strong potential to promote food security and reduce poverty.



Source : The FINANCIAL
 

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