The International Finance Corporation (IFC), a member of the World Bank Group, is providing a US$50 million financing package to Amret Co., a leading microfinance institution, to help the company increase lending to smaller businesses, especially those in the agriculture sector and rural areas, said a press release made public this afternoon.
The US$50 million syndicated loan will boost Amret's ability to support more than 400,000 micro-entrepreneurs, most of whom work in agriculture, by providing about US$900 million in loans over the next four years.
"With a wide network of branches in all 25 provinces across the country, we will continue our outreach to agricultural enterprises, providing them with reasonable and competitive financial products and services," said Chea Phalarin, CEO of Amret. "Thanks to IFC, Amret has been able to diversify our sources of funding and connect to internationallenders. This financing package will enhance our ability to mobilize additional long-term funding from private investors."
Agribusinesses make up one-third of Cambodia's small and medium enterprises and account for about half of all SME financing needs. These long-term loans will enable Amret, Cambodia's third-largest microfinance institution by gross outstanding loans, to help raise incomes, expand businesses, and create jobs throughout the country.
"IFC's continued support to Amret should allow the company to grow its operations across Cambodia," said Adel Meer, IFC's Financial Institutions Group Manager for East Asia and the Pacific.
Introducing international lenders to the MFI will also allow for greater diversity in Amret's funding base, he added.
According to the press release, IFC became a shareholder in Amret with 19.9 percent ownership in March 2015. In addition to its financial investment, IFC has continued to support Amret by providing it with advisory services in the field of risk management and corporate governance. Improvements in these two areas will help the institution realize its strategy of transforming into a commercial bank in the medium term.