On 28 June 2013 PRASAC, the leading micro finance institution in Cambodia, marked its debut in the syndicated loan market with a USD 62.5 million facility. The transaction is reported to be the single largest ever micro finance syndicated facility worldwide.
PRASAC’s extensive, large branch network combined with its rural focus ensures that proceeds are to finance a very large number of loans for micro, small and medium sized companies throughout Cambodia. This transaction will in general benefit private sector growth in Cambodia.
The multi-tranche A/B loan was led by Mandated Lead Arranger and Bookrunner FMO (the Netherlands Development Finance Company). FMO arranged USD 62.5 million of which USD 60 million has a five year tenor and USD 2.5 million a 2 year tenor. The senior unsecured issue has participations from seven investors from six different countries of which three are making their debut in Cambodia. These include Cordiant from Canada (USD 10m), the Development Bank of Austria OeEB (USD 10m) and Turkish Demir-Halk Bank (USD 2.5m). The others are known to the Cambodian market: Norfund from Norway (USD 10m), the Austrian based Opec Fund for International Development OFID (USD 10m), the Belgium Development Bank BIO (USD 7.5m) and FMO (USD 12.5m).
Linda Broekhuizen, Director Financial Institutions at FMO stated: “FMO is proud to be the Mandated Lead Arranger for this landmark transaction. Through this transaction, FMO further strengthens its relationship and shows its long-term commitment to PRASAC, long-lasting and well reputed client of FMO. In addition, FMO plays an important catalytic role by introducing Cordiant, Demir-Halk Bank and OeEB to a new market, Norfund and OFID to a new client and by enhancing the cooperation with exiting lender and shareholder BIO. All lenders are pleased to be significant contributors to the foster of the Cambodian private sector.”
“For OeEB this facility offers a unique opportunity to support micro-enterprises which constitute an essential pillar for Cambodia’s further economic development,” says Andrea Hagmann, member of the executive board of OeEB. “For many Cambodians micro business forms a significant part of household income. Providing funding for these activities is one of the main targets of OeEB.”
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PRASAC is the largest microfinance institution in Cambodia with a mission to provide sustainable access to financial services for rural communities and micro-enterprises in Cambodia. The company evolved from a project sponsored by the European Union and three ministries of the Cambodian government in 1995. Among its peers, PRASAC has the largest branch network that covers more than 75% of 14,000 villages in the country. PRASAC provides mainly individual loans (97%) to micro, small and medium sized companies. At the end of 2012 PRASAC had almost 2,000 employees and nearly 140,000 clients. The shareholders are BIO, Dragon Capital (Vietnam), Lanka Orix Leasing Company (Sri Lanka) and FMO. The PRASAC Staff Company owns 10%.
Oesterreichische Entwicklungsbank AG (OeEB) has been operating as the official Development Bank of Austria since March 2008. It specializes in the provision of long-term finance for the implementation of private sector projects in developing countries which create sustainable development. Additionally, OeEB provides Technical Assistance (Advisory Programmes) which can be used to enhance the developmental impact of projects. For more information, please visit www.oe-eb.at.
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of EUR 6.2 billion, FMO is one of the largest European bilateral private sector development banks.