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 SOURCES OF FUNDS
 


Sesame Farm

 SOURCES OF FUND

ASDF

AFD GRANT

  IFAD Loan  
  ADB Loan  
  BIDC Loan

  CDB Loan

  RDB Funds  
     

 


Rural Development Bank's Financial Resources Agriculture Support and Development Funds Special loan from the Government The amount of USD36,000,000.00






According to the highest recommendation of Samdech Akeakmohasenapadey Dacho Hun Sen Prime Minister of the Kingdom of Cambodia and following the care from the Ministry of Economy and Finance and Supreme National Economic Council, RDB is responsible for implementation the special loan provided by the government included the counterpart fund of RDB as a working capital to the Rice Miller Associations and Rice Market in the purpose of purchasing paddy during the harvest season, preventing paddy outflow and enhancing domestic recycle, increasing value added, increasing the number of stock for national food security, and the rice market competition both price and quality, especially, transforming the paddy exporting to the rice exporting. This financing has been started since 2005 in the amounts of USD 2 Million and increased to USD 4 Million in 2006, USD 6 Million in 2007 and up to USD 16 Million in 2008. As the result, this project is taking part in pushing the rice price in Cambodia to the lower rate growth
comparing to the neighboring countries and world market.

1-TARGET CLIENT

  1. Trader, entrepreneur, investor that has business related to agri. and agro-industry  
  2. Associations or Communities that has business related to agri. and agro-industry
  3. Others are pointed by the government

2- ELIGIBILITY CRITERIA FOR LOANS

  1. Legal personality: Individual or legal entities under Cambodia Law own a business.
  2. Track record: Experience and knowledge.
  3. Accounting system: Book keeping record
  4. Owned Capital: At least 20% of business project value.
  5. Account opening: Must open current or saving account at Rural evelopment Bank.
  6. Collateral: Fixed asset
  7. Profitability: Net income increasing every year

3- PRODUCT
3.1-Short Term Loan: purchase paddy and stock for processing with the criteria as follows:

  1. Max. Loan size: 20% of RDB’s networth
  2. Term: less than 1 year.
  3. Interest Rate:  6%-9% per annum.
  4. Service Charge: 0.5% of loan amount.
  5. Collateral: Cost of fixed assets must be valued more than twice of the loan proposed amount.

3.2-Medium and Long Term Loan: (1)Medium term: Purchase or rent production equipment, increase capacity of warehouse and processing.  (2)Long term: Purchase heavy machinery equipment, build manufactory, production office building for Agro-Industry crops.     

  1. Max. loan size: 20% of RDB’s networth
  2. Term: over than 1 year with 1 year grace period
  3. Interest Rate:  7-10% per annum
  4. Service Charge: 0.5% of loan amount
  5. Collateral: Cost of fixed assets must be valued more than twice of loan proposed amount.

 

 




Rural Development Bank's Financial Resources Support Family Rubber Plantation Farmers Grants fund from AFD The amount of USD1,000,000.00



The French government has provided a grant to the Royal Government of Cambodia through the Ministry of Economy and Finance to support  micro finance activities in Cambodia with the ultimate goal to alleviate rural poverty and to raise the  living standards of the rural population.. So far, the French government has provided funds to support micro finance in Cambodia through Agence Française de Développement (AFD) amounting to 10 million Euros.

1-TARGET CLIENT
Farmers who plant rubber in Kompong Cham province

2- ELIGIBILITY CRITERIA FOR LOANS

1- Legal personality: must be farmers who live in Kompong Cham province

2- PRODUCT

Long-term loan to farmers for planting the rubber.

  • Loan size: $1000 or KHR 2,920,000 per hectare
  • Term: 20 years with up to 10 years grace period
  • Interest Rate: 7-9% per annum
  • Collateral: Rubber Plantation Land

www.afd.org


Rural Development Bank's Financial Resources Support Microfinance Borrowing from IFAD The amount of USD 1,230,000.00




The main objective of International Fund for Agriculture Development (IFAD) project is to increase food and income security for 60,500 households in target villages, communes and districts of the four provinces (Pursat, Battambang, Banteay Mean Chey and Siem Reap). The project consists of three components, such as agricultural development; rural micro-finance; project support and co-ordination.

The IFAD project is six years (2000-2005), with total project costs of USD 11.55 million: USD 8.6 million loan from IFAD, USD 1.78 million grant for technical assistance from AusAid and UNDP, and USD 1.17 million from the Government and beneficiaries.

IFAD provided to Royal Government of Cambodia (RGC) through Ministry of Economy and Finance (MEF) a loan amount of US$ 8.6 million with 40 years of repayment and 10 years of grace period. Interest will be 0.75% per annum.

For agricultural development and project support and co-ordination, RGC/MEF provided USD 7.3 million to support ADESS program (ADESS – Agricultural Development to Support Seila) for training agricultural technique and fund for farmers in the target areas (PSP – Production Start-up Programme and AIP – Agricultural Improvement Programme).

In the same time, RGC/MEF lent to Rural Development Bank (RDB) about US$ 1.3 million for the implementation of Rural Micro-finance component, in 15 years loan period with 7 years grace period. Interest rate is 3% per annum in USD and 6.8% per annum in KHM (Khmer Riel).

RDB funded the Micro-finance Institutions (MFIs) and Non-Government Organizations (NGOs) which are registered at the National Bank of Cambodia (NBC). RDB lent to MFIs/NGOs for the period up to 10 years with 5 years grace period based on their performance. Interest rate is 7% per annum in USD and 11-12% per annum in KHR. Then, MFIs/NGOs shall on-lend to target group/farmers based on the prevailing market rates.

There are three groups of activities for which potential borrowers from the IFAD target group might require credit: (i) crop and livestock production; (ii) agro-industry and manufacturing; and (iii) trading and other services. Based on the available information, a total of 12 activities within the above categories are: (1) crop production (paddy and other crops); (2) small-scale pig production; (3) small-scale poultry production (chickens and ducks); (4) palm sugar collection; (5) weaving floor mats; (6) small rice mill; (7) general trading (e.g. groceries, fruit and vegetables, agricultural inputs and outputs, etc.); (8) rattan furniture making; (9) construction of oxcarts; (10) repair workshops: pumps, motorcycles, radios and televisions; (11) transportation, including animal-drawn carts and motorcycles; and (12) small-scale irrigation.

Now, there are 6 MFIs/NGOs which are participating in this project in four provinces (Pursat, Battambang, Banteay Mean Chey and Siem Reap). Each target province has at least 2 MFIs/NGOs that are providing credit to farmers.

1-TARGET CLIENT

  1. Licensed Microfinance Institutions
  2. Credit operators or NGOs

2- ELIGIBILITY CRITERIA FOR LOANS

  1. Legal personality: Licensed MFIs, Registered MFIs, and credit operators operated in 4 provinces such as; Pursat, Battambang, Banteay meanchey, and Siem Reap provinces.
  2. Track record: At least 2 year successful lending experience in microfinance.
  3. Board of Directors: Credible and competent.
  4. Operating systems: MIS and Accounting.
  5. Viability: Net income increasing every year

3- PRODUCT

Term Loan: This primary lending window provides loans to MFIs that on-lend funds directly to their end-borrowers.

  1. Loan size: Not more than 20% of RDB’s networth
  2. Term: 10 years
  3. Mode of payment: Monthly interest payment
  4. Interest Rate: 7% per annum
  5. Collateral: Loan Agreement, and Promissory Note with assignment of promissory notes of new sub-borrowers.
 

 


Rural Development Bank's Financial Resources Support Microfinance Borrowing from ADB The amount of USD5,000,000.00



ADB Loan No. 1741-CAM (SF): Rural Credit and Savings is one of the 20 loans approved by ADB's Board of Directors on April 27, 2000. The loan project was signed between the Ministry of Economy and Finance of the Royal Government of Cambodia and the Asian Development Bank, dated July 7, 2000. After that, the loan became effectiveness on March 29, 2001. The objective of Asian Development Bank (ADB) project is to develop effective financial services in the rural areas, which will provide poor households with better access to rural finance. The project scope will include the provision of credit lines to finance income-generating activities of the rural poor, support for rural credit and savings schemes of Licensed Financial Institutions (LFIs). The project will cover the operations of LFIs throughout Cambodia.  The project will contribute substantially to the national goal for poverty reduction through the provision of income-generating activities and sustainable savings facilities for households in the rural areas, where about 85% of the poor people are living. During the implementation period, the project expected to directly benefit approximately 65,000 rural households. More than 50 percent of the subborrowers are expected to be rural women, households and can enhance their access to other social services being provided by the prospective LFIs. The project consists of seven components, such as agricultural production; retail trading; pig raising; rice milling; silk weaving; brick making; and small-scale irrigation.

ADB provided to RGC through Ministry of Economy and Finance (MEF) with a loan amount of US$ 5 million for 32 years, with 8 years grace period at 1% of interest rate per annum during the grace period and 1.5 % per annum thereafter.

ADB project is five years (2001-2005), with total costs of USD 6.64 million. The ADB loan is USD 5 million.  The balance of US$ 1.64 million will be financed by the Royal Government of Cambodia (RGC) and LFIs. The Government provided Rural Development Bank (RDB) with lines of credit of US$ 4.8 million under a subsidiary loan agreement, which covers a period of 20 years with a repayment schedule similar to that between the RGC and ADB. The credit lines is provided to RDB at rates, not less than LIBOR six-month deposits in dollars on the Dow Jones Telerate Service, 30 November 2001, which rate shall be reviewed and revised every year.

RDB shall make loan to LFIs (Commercial Banks, Specialized Banks, and Licensed Micro-finance Institutions [MFIs]). RDB lent fund to LFIs with an interest rate of the LIBOR 6 month plus 4% per annum in USD and plus 6% per annum in KHR (Khmer Riel) for the period of 3 to 5 years with review of 18 months.

The participating LFIs shall make loan from this fund to end-borrowers with the interest rate of 30%-40% per annum or 2.5%-3% per month. In addition, LFIs shall only finance subprojects for the income generating activities of sub-borrowers, which contribute to agriculture and rural development. Sub-loan made by any LFI shall not exceed the equivalent of 10% of its networth.

Up to Now, there are 6 LFIs which are participating in this project.

1-TARGET CLIENT

  1. Commercial and Specialized Banks
  2. Licensed Microfinance Institutions

2- ELIGIBILITY CRITERIA FOR LOANS

  1. Legal personality: Licensed Financial Institutions (LFIs)
  2. Track record: At least 2 year successful lending experience in microfinance.
  3. Board of Directors: Credible and competent.
  4. Operating systems: Presence of MIS, Accounting and Internal Control Systems (preferable if there is written, updated Manual of Operations).
  5. Viability: Net income increasing every year
  6. Debt servicing: No loans in arrears with other creditors, no history of bouncing checks for the last 2 years.

2- PRODUCT
2.1-Term Loan: This primary lending window provides loans to MFIs that on-lend funds directly to their end-borrowers.

A- Loan size: Not more than 20% of RDB’s networth
B- Term: 3-5 years with 18 month-review.
C- Mode of payment: quarterly
D- Interest Rate: LIBOR 6 months + 4%
E- Service Charge: 1% of loan amount.
F- Collateral: Loan Agreement, and Promissory Note with assignment of promissory notes of new sub-borrowers.

2.2-Credit Line: This primary credit facility is for MFIs that have developed a sound microfinance loan portfolio from their own sources of funds and desire to further expand lending.

A- Loan size: Not more than 20% of RDB’s networth
B- Term: 3-5 years with 18 month-review.
C-Mode of payment: Full payment of the amount of each drawdown within 12 months.
D- Interest Rate: LIBOR 6 months + 4%
E- Service Charge: 1% of loan amount.
F- Collateral: Loan Agreement, and Promissory Note with Assignment of promissory notes of sub-borrowers of eligible loan portfolio.

2.3-Secondary Loan:       This secondary lending window provides loans to secondary lenders that wholesale the funds to secondary borrowers that in turn retail the funds to end-borrowers.

A- Loan size: Not more than 20% of RDB’s networth
B- Term: 3-5 years with 18 month-review.
C-Mode of payment: Quartely.
D- Interest Rate: LIBOR 6 months + 4%
E- Service Charge: 1% of loan amount.
F- Collateral: Loan Agreement, and Promissory Note with Assignment of assets.

2.4-Institutional Credit: Institutional Credit is provided to finance the institutional development and capacity-building programs of the MFIs to strengthen their organizational capability.

A- Loan size: Not more than 20% of RDB’s networth
B- Term: 3-5 years with 18 month-review.
C-Mode of payment: Quarterly payment. One year grace on the principal.
D- Interest Rate: LIBOR 6 months + 4%
E- Service Charge: 1% of loan amount.
F- Collateral: Loan Agreement, and Promissory Note with Assignment of assets.

 

 



Rural Development Bank's Financial Resources Support Purchase Paddy and Processing Borrowing from BIDC, Candia Bank and FTB The amount of USD 23,000,000.00



1- TARGET CLIENTS

  1. Rice miller entrepreneurs           
  2. Paddy & Rice traders

2- ELIGIBILITY CRITERIA FOR LOANS

  1. Legal personality: must be legal entity registering at the Ministry of Commerce and/or others relevant authorities
  2. Track record: at least 2 years successful experience in business
  3. Accounting: Cambodia’s accounting standard
  4. Owned Capital: at least 20% of​​​​ project cost
  5. Collateral: Fixed assets and third party guarantee
  6. Profitability: Net income increases every year

3- PRODUCTS
Short-term loan​ for purchasing paddy and processing with the following criteria.

  1. Loan size: 20% of RDB’s networth
  2. Term: Less than 12 months.
  3. Interest Rate: 10% per annum.
  4. Service Charge: 1% of loan amount.

 

 


Rural Development Bank's Financial Resources Support Agriculture Sector Borrowing from China Development Bank The amount of USD8,000,000.00



1- TARGET CLIENTS

  1. Trader, entrepreneur, investor that has business related to agri. and agro-industry  
  2. Associations or Communities that has business related to agri. and agro-industry
  3. Others are pointed by the government

2- ELIGIBILITY CRITERIA FOR LOANS

  1. Legal personality: Individual or legal entities under Cambodia Law own a business.
  2. Track record: Experience and knowledge.
  3. Accounting system: Book keeping record
  4. Owned Capital: At least 20% of business project value.
  5. Account opening: Must open current or saving account at Rural Development Bank.
  6. Collateral: Fixed asset
  7. Profitability: Net income increasing every year

3- PRODUCT :
(1)Medium term: Purchase or rent production equipment, increase capacity of warehouse and processing.  (2)Long term: Purchase heavy machinery equipment, build manufactory, production office building for Agro-Industry crops.    

A- Max. loan size: 20% of RDB’s networth
B- Term: 3-5 years
C- Interest Rate:  there are 2 options:

  1. Fixed rate is 9% per annum.
  2. Floating rate is LIBOR 6 month + 4.75% + 3% per annum

D-Service Charge: 1% of loan amount

E-Collateral: Cost of fixed assets must be valued more than twice of loan proposed amount.

 

 


Rural Development Bank's Financial Resources Supporting Cooperatives, Association, RuralCommunities, and SMEs RDB's Capital from the Government The amount of USD 20,000,000.00





1-TARGET CLIENT

  1. Cooperatives, Associations, and Rural Communities
  2. Small and Medium Enterprises

2- ELIGIBILITY CRITERIA FOR LOANS
2-1-Cooperatives, Associations and Rural Communities

  1. Legal personality: Individual or legal entities under Cambodia Law.
  2. Track record: At least 1 year experience.
  3. Accounting system: Bookkeeping record.
  4. Owned Capital: At least 20% of the proposed loan amounts, and have saving mobilization program for members.
  5. Account opening: Must open current or saving account at Rural Development Bank.
  6. Collateral: Fixed asset or guarantee letter or mutual guarantee among members.
  7. Debt redemption: Sufficient cash flow to repay debt.

2-2-Small and Medium Enterprises

  1. Legal personality: Individual or legal entities under Cambodia Law. SME can be entrepreneur, traders, investors etc...
  2. Track record: At least 2 years experience.
  3. Accounting system: At least bookkeeping record.
  4. Owned Capital: At least 50% of the project cost.
  5. Account opening: Must open current or saving account at Rural Development Bank.
  6. Collateral: Fixed asset or third party guarantee.
  7. Viability: Net income increasing annually

3- PRODUCTS
3-1-Cooperatives, Associations and Rural Communities

i)Short-term Loan:

A- Loan size: Maximum 20% of RDB’s net worth
B- Term: less than 12 months
C- Interest Rate:  12% per annum
D- Service Charge: 1% of loan amount
E- Collateral: Fixed assets or guarantee letters or mutual guarantee among members

ii)Long-term Loan:

A- Loan size: Maximum 20% of RDB’s networth
B- Term: less than 20 years with grace period
C- Interest Rate:  6-10% per annum
D- Service Charge: 1% of loan amount
E- Collateral: Fixed assets or guarantee letters

iii)Overdraft loan:

A- Loan size: Maximum 20% of RDB’s networth
B- Term: less than 18 months
C- Interest Rate:  12% per annum
D- Service Charge: 1% of loan amount
E- Collateral: Fixed assets or guarantee letters

iv)Credit line:

A- Loan size: Maximum 20% of RDB’s networth
B- Term: less than 36 months
C- Interest Rate:  12% per annum
D- Service Charge: 1% of loan amount
E- Collateral: Fixed assets or guarantee letters  

3.2- Small and Medium Enterprises

i)Short-term Loan or working capital:

A- Loan size: Maximum 20% of RDB’s net worth
B- Term: 6 - 18 months
C- Interest Rate:  12-16% per annum
D- Service Charge: 1% of loan amount
E- Collateral: Fixed assets or guarantee letters

ii)Long-term loan or Investment Capital:

A- Loan size: Maximum 20% of RDB’s networth
B- Term: 18 months – 20 years
C- Interest Rate:  10-14% per annum
D- Service Charge: 1% of loan amount
E- Collateral: Fixed assets or guarantee letters

iii)Overdraft loan:

A- Loan size: Maximum 20% of RDB’s networth
B- Term: 1 – 6 months
C- Interest Rate:  12 – 16% per annum
D- Commitment fee: 4% on unused balance
more than 20% and 1% on unused balance less
than 20%
E- Service Charge: 1% of loan amount

F- Collateral: Fixed assets or guarantee letters

 

 

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