The International Finance Corporation (IFC), a member of the World Bank Group, on June 30 announced that it has arranged a syndicated loan of US$65 million to help Cambodia's PRASAC Microfinance Institution Limited. - the country's biggest microfinance provider - increase its lending to micro, small, and medium rural and agricultural enterprises, most of which are owned by women.
The syndication comprises US$20 million each from Thai banks Kiatnakin Bank, Siam Commercial Bank and TMB Bank, and US$5 million from ING Bank. This syndication supplements IFC's US$10 million own-account loan made in April to support PRASAC's continued expansion of its micro loan portfolio.
"Expanding lending to micro borrowers and smaller businesses is a focus of PRASAC's growth and expansion strategy," said PRASAC CEO Sim Senacheert. "We appreciate IFC's support in mobilizing other international lenders to provide much-needed long-term funding for us to realize our strategy."
Long-term funding will enable PRASAC to extend more loans to small businesses and low-to-middle-income borrowers, 85% of whom are women.
The loan marks the first time that a group of Thai banks has made a syndicated loan of this size to Cambodian borrowers.
Demand for loans from micro and small businesses is high in the country, where an estimated 40% of the population lives on less than US$2 per day. By investing in and mobilizing funding for Cambodian microfinance institutions, IFC aims to expand microfinance lending beyond the 845,000 borrowers that it currently reaches through its support of four microfinance lenders in the country.
"The syndicated loan for PRASAC exemplifies our continued support to Cambodian financial institutions that are the conduits to business creation and growth, to employment, and to higher standards of living," said Adel Meer, IFC's financial institutions group manager for East Asia and the Pacific. "IFC is committed to helping its clients in emerging markets increase their access to long-term financing."
IFC's syndicated lending programme has mobilized over US$50 billion from more than 500 financial institutions for over 1,000 projects in more than 110 emerging markets since the programme was established in 1957. As of December 30 2014, IFC's syndicated loan portfolio under management totaled US$15.4 billion.
