Three local banks along with the World Bank's International Finance Corporation (IFC) and the Netherlands' ING Bank NV have granted syndicated loans worth a combined US$65 million to Prasac Microfinance Institution, Cambodia's largest microfinance lender.
Thailand's Siam Commercial Bank, TMB Bank and Kiatnakin Bank each provided US$20 million to the Cambodian microfinance lender, while ING loaned $5 million. The syndicated loan agreement, which was signed yesterday, was arranged by IFC.
The $65-million loan, with two terms loans of three and five years, will in turn be lent to micro enterprises and SMEs in the agricultural and other rural sectors.
IFC had earlier arranged a $10-million loan to Prasac for the same purpose, said Adel Meer, IFC's regional manager for East Asia and the Pacific.
The World Bank agency intends for the new $65 million to be extended to 845,000 borrowers or 48% of the number of borrowers served by microfinance lenders in Cambodia at present.
The country's microfinance sector has expanded rapidly, with annual growth of more than 30% in the last 20 years and more than 1.9 million borrowers served, but demand for credit remains huge.
Four Cambodian microfinance lenders are under IFC support. Prasac is the country's biggest one, with outstanding loans totalling $700 million.
The loan is expected to enable Prasac to accelerate growth of its lending portfolio to $900 million by the end of 2019.
Mr Meer said the $65 million was IFC's first syndicated loan to Prasac using Thai banks.
In the near future, IFC may arrange syndicated loans to Prasac in baht, he said.
Sim Senacheert, Prasac's president and chief executive, said interest in baht loans was strong, particularly from cross-border clients.
In recent years, baht-denominated loans have grown by 40-50% annually, in line with Cambodia's strong economic growth of about 7% per year, with this year expected to be the same.