The loan is to promote financing to rural and micro businesses, especially those in the agriculture sector, according to a press release. The $110 million loan consists of a $40 million financing package from IFC’s own account, $20 million from GAFSP’s Private Sector Window, $30 million from the Singapore branch of Japan’s Sumitomo Mitsui Banking Corporation through IFC’s syndicated loan program and $20 million through the IFC managed co-lending portfolio program.
ACLEDA Bank, a commercial bank and the largest bank by assets in Cambodia, will use the loan to increase its lending mainly to agribusiness, which represents only 9.7 percent of Cambodian banks’ entire loan portfolio. Agribusiness makes up a third of all small and medium enterprises (SME) in the country and accounts for about half of total SME financing needs, according to IFC.
“Extending financial services to micro borrowers and smaller businesses is a pillar of ACLEDA Bank’s growth and expansion strategy,” said In Channy, president and group managing director of ACLEDA Bank, in a statement. “We appreciate IFC’s support in mobilising other international lenders to provide much-needed long-term funding for us to realise our strategy.”
In 2014, IFC invested $4 billion across the agriculture value chain globally. Its agribusiness strategy is to “promote inclusive growth and environmental and social sustainability in agricultural supply chains”, reads the statement.
Earlier this week, the World Bank approved a loan of $50 million to improve food security in Mozambique, the second in a series of three agriculture loans that support operations financing agricultural reform there.
The loan will boost Mozambique’s efforts to increase access to food and better nutrition for its people, and to promote market-based agriculture and private sector investment, according to the World Bank.
“Agriculture in Mozambique employs over 70 percent of the workforce and contributes to more than 25 percent of the country’s GDP,” said Jan Joost Nijhoff, senior agriculture economist and task team leader for the operation, in a statement. Nijhoff said stronger agricultural competitivenes, would potentially spur growth in exports and reduce Mozambique’s import bill for agricultural commodities, while increased productivity would enhance food security among rural households.
The World Bank has set goals to end extreme poverty by decreasing the percentage of people living on less than $1.25 a day to no more than 3 percent and by fostering the income growth of the bottom 40 percent for every country by 2030.