Japan International Cooperation Agency (JICA) and Sumitomo Mitsui Banking Corp’s (SMBC) Singapore Branch on May 27 penned a $135 million facility agreement with ACLEDA Bank Plc to funnel more loans into agriculture, according to the locally-owned lender.
Speaking at the signing ceremony, ACLEDA Bank president and group managing director In Channy said the two Japanese institutions’ long-term finance scheme would provide a significant avenue for the local bank to lend a hand to micro-, small- and medium-sized enterprises (MSME) nationwide in need of financing for agricultural production or to better manage their revenues.
He took the occasion to tout the value of the bank’s assets and extent of its domestic branch network, pointing out that they were number-one in Cambodia.
“Cambodian people in all segments of the communities, in particular those [living] in rural areas can access financial services of the ACLEDA Bank, including loan[s] in agriculture,” Channy said.
He said the $135 million facility would “promote access to finance, even more actively in rural areas, … for further lending to agriculture … to promote agriculture production and socio-economic development”.
Agriculture is a major linchpin of the Kingdom’s economy, which according to JICA accounts for about 20 per cent of gross domestic product (GDP) and 30 per cent of employment.
“On the other hand, access to finance in the agricultural sector is limited to about nine per cent of the total amount of loans in the country, and more than half of farmers do not have any access to finance,” the Japanese government’s overseas development arm said.
“About 90 per cent of Cambodia’s poor live in rural areas, where about 80 per cent of the population is engaged in agriculture, and the income in these areas is only around 50-60 per cent of that in urban areas, creating an economic disparity.
“This loan will contribute to improving access to finance for these rural farmers through ACLEDA Bank, the financial institution with the largest loan balance in the agricultural sector in Cambodia. The loan aims to contribute to sustainable economic growth in Cambodia by supporting the expansion of lending to the agricultural,” JICA added.
ACLEDA Bank reported that as of March 31, total assets stood at $8.16 billion, total credit portfolio $5.79 billion, and total deposits $5.90 billion, and that the number of customers had passed 3.44 million.