MICROCAPITAL BRIEF: International Finance Corporation (IFC), Global Agriculture and Food Security Program, Sumitomo Mitsui Banking, Managed Co-Lending Portfolio Program to Loan $110m to Cambodia’s Acleda for Agricultural Lending

The International Finance Corporation (IFC), a member of the World Bank Group; the Global Agriculture and Food Security Program (GAFSP), a multilateral mechanism established by the G20 group of 20 large economies; Sumitomo Mitsui Banking Corporation (SMBC), a Tokyo-based subsidiary of Sumitomo Mitsui Financial Group; and the IFC Managed Co-Lending Portfolio Program, a platform that allows institutional investors to participate in IFC’s senior-loan portfolio, recently announced that they will be loaning a total of 110 million to Acleda Bank (Acleda), a Cambodian commercial bank. USD 40 million will be provided by IFC, USD 20 million by GAFSP, USD 30 million by SMBC and USD 20 million through the IFC Managed Co-Lending Portfolio Program. The loan primarily will be used for lending to small and medium-sized agricultural businesses with a target of providing roughly USD 250 million to 60,000 agribusinesses by 2019.

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

As of June 30, 2014, Acleda reported total assets of USD 2.7 billion, loans and advances to customers of USD 1.6 billion and deposits of USD 1.7 billion. As of March 31, 2014, SMBC reported total assets of JPY 136 trillion (USD 1.3 trillion) and deposits of JPY 84 trillion (USD 706 billion). In June 2014, IFC reported net annual income of USD 1.4 billion, total assets of USD 84.1 billion, return on assets of 1.8 percent and total investment mobilization of USD 38.1 billion. As of November 30, 2014, GAFSP has received the equivalent of USD 1.37 billion from ten donors.

By Ananya Tiwari, Research Associate

About Acleda Bank Public Limited Company (Plc)
Acleda Bank is a public limited company based in Phnom Penh, Cambodia. It was originally founded in January 1993 as the Association of Cambodian Local Economic Development Agencies, a non-governmental organization aiming to raise the standards of living of poor people by promoting economic activities ranging from self-employment to medium-sized business. It was licensed by the National Bank of Cambodia as a “specialized bank” in October 2000 and as a “commercial bank” in December 2003, when it was renamed Acleda Bank (Acleda). It provides a range of banking services including deposits, loans, cash management and trade services. Acleda also works commercially in Laos through a subsidiary, Acleda Bank Laos (ABL), and has microfinance operations in Myanmar through a subsidiary, Acleda Microfinance Myanmar (AMM). As of June 30, 2014, in its unconsolidated, unaudited quarterly financial statement, Acleda reported total assets of USD 2.7 billion, loans and advances to customers of USD 1.6 billion and deposits of USD 1.7 billion.

About Global Agriculture and Food Security Program (GAFSP)
GAFSP is a multilateral mechanism established to assist in the implementation of the pledges made at the 2009 meeting in Pittsburgh, Pennsylvania, USA, of the Group of 20 (G20), an association of financial officials from 19 countries and the EU. The aim of GAFSP is to address the first UN Millennium Development Goal, which is to cut global poverty and hunger in half by 2015, through public-sector and private-sector avenues. The public-sector office of GAFSP mobilizes grant funding for country-and regional-led agricultural development efforts. The private-sector office, which is managed by the World Bank Group’s International Finance Corporation, provides loans, credit guarantees and equity to support agricultural development and improve food security. As of November 30, 2014, GAFSP has received the equivalent of USD 1.37 billion from ten donors: Australia (public sector), Canada (public and private sector), Ireland (public sector), Japan (private sector), Korea (public sector), Netherlands (private sector), Spain (public sector), United Kingdom (public and private sectors) and the United States (public and private sectors). This figure accounts for 93 percent of the amount pledged.

About International Finance Corporation (IFC)
The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments and advisory and risk mitigation services to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2014, IFC has 184 member countries that drive its policies and approve disbursements. In June 2014, IFC reported total assets of USD 84.1 billion, net annual income of USD 1.4 billion, return on assets of 1.8 percent and USD 38.1 billion in investments mobilized.

About Sumitomo Mitsui Banking Corporation (SMBC)
Headquartered in Tokyo, Japan, Sumitomo Mitsui Banking Corporation (SMBC) was established in 2001 upon the merger of Sakura Bank Limited and Sumitomo Bank Limited. The Sumitomo Mitsui Financial Group (SMFG) was established in 2002, when SMBC became a wholly-owned subsidiary of SMFG. In 2003, SMBC merged with Wakashio Bank Limited. In May 2013, SMBC purchased a 40-percent stake in Bank Tabungan Pensiunan Nasional (BTPN) for USD 1.5 billion. As of 2014, SMBC offers a range of corporate and investment banking services including lending, foreign exchange services, trade finance, structured finance, project finance, syndicated lending, cash management and securities services. As of March 31, 2014, SMBC had approximately 22,900 employees and a network of 439 domestic and 16 overseas branches. As of March 31, 2014, SMBC reported total assets of JPY 136 trillion (USD 1.3 trillion), deposits of JPY 84 trillion (USD 810 billion) and “loans and bills discounted” of JPY 63.4 trillion (USD 610 billion).

Sources and Other Resources

[1] The Financial, http://finchannel.com/index. php/business/item/42408-ifc- helps-expand-financing-for- rural-enterprises-and- agribusinesses-in-cambodia

MicroCapital, April 10, 2015, “Bank Tabungan Pensiunan Nasional (BTPN) of Indonesia Borrows $300m from Sumitomo Mitsui Banking Corporation (SMBC), International Finance Corporation (IFC) for Microenterprise Lending,” https://www.microcapital.org/ microcapital-brief-bank-tabungan-pensiunan-nasional-btpn-of-indonesia-borrows-300m-from-sumitomo-mitsui-banking-corporation-smbc-international-finance-corporation-ifc-for-microenterprise-lend/

MicroCapital, August 23, 2014, “Government of Canada, International Finance Corporation (IFC) Support Small, Medium-sized Agricultural Enterprises in Ukraine,” https://www.microcapital.org/microcapital-brief-government-of-canada-international-finance-corporation-ifc-support-small-medium-sized-agricultural-enterprises-in-ukraine/

MicroCapital, March 1, 2014, “Acleda Bank Plans to Open 12 New Branches in Myanmar, 4 in Laos,” https://www.microcapital.org/microcapital-brief-acleda-bank-plans-to-open-12-new-branches-in-myanmar-4-in-laos/

MicroCapital, February 10, 2014, “Triodos Revealed as Source of Shares of Cambodia’s Acleda Bank Purchased by Orix,” https://www.microcapital.org/microcapital-brief-triodos-revealed-as-source-of-shares-of-cambodias-acleda-bank-purchased-by-orix/

MicroCapital Universe Profile: Global Agriculture and Food SecurityProgram (GAFSP), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Global+Agriculture+and+Food+Security+Program+%28GAFSP%29

MicroCapital Universe Profile: Acleda Bank, https://www.microcapital.org/ microfinanceuniverse/tiki- index.php?page=Acleda+Bank

MicroCapital Universe Profile: Sumitomo Mitsui Banking Corporation (SMBC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sumitomo+Mitsui+Banking+Corporation+%28SMBC%29

MicroCapital Universe Profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

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