MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Loan up to $10m to Prasac of Cambodia for On-Lending to Agricultural Micro-, Small, Medium-sized Enterprises (MSMEs)

The International Finance Corporation (IFC), a member of the US-based World Bank Group that offers financial services to businesses and governments in developing countries with the aim of increasing economic growth, recently announced that it has opened a long-term credit line of up to USD 10 million to Prasac Microfinance Institution Limited, a Cambodian microfinance institution (MFI). The purpose of the loan is to contribute to the financing of micro-, small and medium-sized enterprises (MSMEs) that operate in the agricultural sector in the country’s rural areas. The borrowing is part of an effort by Prasac to expand its loan portfolio of USD 580.3 million as of 2014 to USD 900 million by the end of 2019.

Mr Adel Meer, the manager of IFC’s Financial Institutions Group for East Asia and the Pacific, said, “IFC is committed to supporting commercially viable microfinance institutions in Cambodia to help them attract more long-term funding to scale up their operations and meet the growing demand for financing”[1]. He added that “our investment in Prasac helps elevate its business to the next level, enabling the company to lend to more households and enterprises so that businesses can grow and more jobs can be created in Cambodia”[1]. Mr Sim Senacheert, Prasac’s CEO, added that “this is the fourth loan IFC gave to Prasac over the past 3 years, further supporting Prasac’s continued efforts to offer financing to micro- and smaller businesses, and low-to-middle income borrowers as well”[1].

IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013. As of 2013, Prasac reported total assets of USD 452 million, return on assets of 4.8 percent and return on equity of 38.9 percent. As of 2014, the organization reported a gross loan portfolio of USD 580.3 million serving 251,000 borrowers and 370,000 depositors with accounts totaling USD 305 million.

By Alíz Crowley, Research Associate

About International Finance Corporation

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance 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 income of USD 1.4 billion and return on assets of 1.8 percent.

About Prasac Microfinance Institution Limited

Prasac was originally founded as a credit component of an agriculture support program in Cambodia that was funded by the European Union and implemented by the Royal Government of Cambodia. It was registered in 2004 with the Cambodia Ministry of Commerce as a private limited liability company and is licensed by the National Bank of Cambodia (NBC) to offer financial services. As of 2013, Prasac reported total assets of USD 452 million, return on assets of 4.8 percent and return on equity of 38.9 percent. As of 2014, the organization reported a gross loan portfolio of USD 580.3 million serving 251,000 borrowers, 370,000 depositors with deposits amounting to USD 305 million. As of 2015, 85 percent of Prasac’s borrowers are women.

Sources and Additional Resources

[1] International Finance Corporation, News, IFC Invests in Cambodia’s PRASAC Microfinance Institution Ltd. to Expand Lending for Micro and Smaller Businesses

MicroCapital, April 19, 2015, 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

MicroCapital, March 26, 2015, International Finance Corporation (IFC) Acquires 19.9% Equity Stake in Cambodian Microfinance Institution Amret for $15m

MicroCapital, November 12, 2014, Symbiotics Issues Bonds Totaling $9.3m to Prasac of Cambodia, AccessBank Azerbaijan

MicroCapital Universe Profile: International Finance Corporation

MicroCapital Universe Profile: Prasac Microfinance Institution Limited

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