Cambodia Agribusiness Access to Finance Project

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The development objective of the Agribusiness Access to Finance Project for Cambodia is to increase the sustainable flow of credit to agribusinesses sector. There are two components to the project, the first component being Risk Sharing Facility (RSF). The project will establish a Risk Sharing Facility (RSF) that will partially guarantee a portfolio of newly-originated loans to agribusinesses. The objective of the RSF is to immediately accelerate commercial banks' lending to agribusinesses. The RSF structure will reimburse the Participating Financial Intermediary (PFI) for a fixed percentage (50 percent) of incurred losses, which is expected to provide them with the credit protection needed to mitigate the perceived high risk of agribusiness Small and Medium Enterprise (SME) lending. Finally, the second component is the International Finance Corporation (IFC) technical assistance. The program addresses a wide range of constraints hindering effective operations of agribusinesses and SME in Cambodia, including issues related to the risks involved in lending to this sector, while tackling also the broader policy, regulatory and institutional constraints that hamper the efficiency of SME business operations and their ability to access finance.