The project will provide
funds through the Rural Development Bank (RDB) for eligible Non-Government
Organizations (NGOs) to on-lend to members of IFAD's target group.
Participating
NGOs will need to meet the following eligibility criteria to receive loans from
RDB under the project: (i) at least two years experience of providing credit in
the rural areas, with high rates of on-time repayment (> 95%) and adequate loan
loss provisions (4%); (ii) willingness to deliver savings and credit services to
the IFAD target group and operate in the project areas if not already operating
there; (iii) a good accounting system, audited accounts, satisfactory audit
reports (RDB will assess the systems in place) and ability to produce separate
financial reports for their credit activities; (iv) a good management structure,
including a board of directors, a chief executive, all with experience of
micro-credit operators; (v) a programme to mobilize savings from the members of
the groups; and (vi) registered at the National Bank of Cambodia (NBC).
Participating NGOs will
provide savings and credit services to households living in the communes
targeted by the AIP. The NGOs will follow their own approach for the delivery of
savings and credit services but this would include: (i) working with groups and
village banks; (ii) targeting members of the IFAD target group who would
participate in the project's programme of agricultural demonstrations and
extension; and the NGO will follow its own procedures in relation to group
formation, savings mobilization, interest rates (loans and savings) and loan
ceilings.
There are three groups of
activities for which potential borrowers from the IFAD target group would
require credit: (i) crop and livestock production; (ii) agro-industry and
manufacturing; and (iii) trading and other services.
