MFI & SME Intergration Supporting Rice Millers

Micro-Finance and Small & Medium Enterprise Integration supporting Rice Millers Project in Battambang, Banteay Meanchey, and Takeo Provinces.

-Financial Input :		USD 2,500,000
	Federation Cambodia Rice Millers Association (FCRMA) :	USD 1,500,000
	- RDB'S Credit:	USD 1,000,000

	- Micro Finance :	20%
	- SME :	30%
	-Store paddy and rice for domestic consumer	50%
-Project Duration :		3 years: 2005-2007
-Target Areas :		14 Districts in 3 provinces: Battambang, Banteay Meanchey and Takeo provinces.
-Technical Assistance :		- Agronomy training to the farmer provided by Ministry of Agriculture, Forestry and Fishery (MoAFF)
		- Issuing policy guideline and regulation by National Bank of Cambodia (NBC)
		- Legal framework and market coordinated by Ministry of Commerce (MoC)
-Executive Agencies :		Federation Cambodia Rice Millers Association (FCRMA)
-Output :		-Providing job opportunity to the farmers, small traders and small rice millers.
		-Keeping the stability of the domestic paddy and rice price.
		-Gathering paddy and rice for national food security, using in emergency case and exporting rice to the worldwide.

Micro-Finance and Small & Medium Enterprise Integration supporting Rice Millers Project in Battambang, Banteay Meanchey, and Takeo Provinces.
Cambodia is an agricultural country; with the majority of its people are farmers. The country is located on the most suitable land for rice cultivation because the land is plain and nourish with water sources ( Mekong River and the largest lake in the region). Currently, Cambodia is continuously developing the agriculture field. Plant breeds were consistently improved so that farmers had the best rice breeds to cultivate. The irrigation system including dams and weirs were built to help increase products and farmers could cultivate more than once a year. Furthermore, agronomy training and microfinance services are granted to the farmer by Ministry of Agriculture Forestry and Fisheries/International NGOs. In addition, Ministry of Economy and Finance and National Bank of Cambodia help strengthen and support microfinance services to the farmers. However, rice product still heavily depends on nature which is the factor affected to the price of paddy and rice which fluctuated many times in a year. The Royal Government of Cambodia ( RGC) faces to gather and store paddy and rice for domestic food security and use in emergency cases. The Royal Government of Cambodia pushes the financial institutions to take part in financing to rice millers sector, in order to support the integration of micro-finance with small and medium enterprises.

Vision :
" Pushing SME in private sector is to take part in the national food security program " " Shifting the direction from ‹ expansionary › or ‹ extensive › agriculture to ‹ deepening › or ‹ intensive › agriculture " The vision of Samdech Hun Sen, Prime Minister of the Royal Government of Cambodia.

Objectives :
To create job opportunity in order to increase the living standard of the poor, prevent the lost of value adding in exporting the paddy and rice, and keeping stable price of paddy and rice and store for using in emergency case. Those activities are contributed to national economy development and against poverty.
Target areas :
In fourteen districts in three provinces (Battambang, Banteay Meanchey, Takeo). The project is focused on the areas which completely existed small irrigation system.
Project duration :
Duration: 3 years, starting from 2005 to 2007.
Project Funding :
Rural Development Bank had already provided the amount of USD 1,000,000.00 and Canadia Bank Plc. is still processing the loan amount of UDS 250,000.00
Executive agencies :
Federation Cambodia Rice Miller Association (FCRMA)
Technical Assistance :
Ministry of Agriculture, Forestry and Fishery (MoAFF). National Bank of Cambodia (NBC) Ministry of Commerce (MoC).
Beneficiary :
Farmers who live in the target area. Paddy & Rice traders and rice miller owners.
Input :
a. Technical input
MoAFF provides agronomy training to the farmer in the target area. National Bank of Cambodia supervises on micro-finance institutions operation by issuing policy guideline and regulation. Ministry of Commerce will coordinate on legal framework and market. FCRMA grants seed, fertilizer and loan funds to the target beneficiary and collects paddy during harvest season with domestic free market price.
b. Financial Cost Estimate :
Total estimate project cost is USD 6 million:
	1. USD 2 million for gathering paddy around 20,000 tones and storing for domestic food security & using in emergency case and keeping the price stable.
	2. USD 4 million for on-lending to rice millers and farmers.
c. Financial input :
Total fund amount of USD 2,500,000.00 in which:
	1. FCRMA owned fund the amount of USD 1,500,000.00
	2. RDB has financed to the project amount of USD 1,000,000.00:
		-Micro-finance:	20% of the RDB fund
		-Small & Medium enterprise:	30% of the RDB fund
		-Storing paddy and rice for domestic consumer:	50% of the RDB fund
	3. Canadia Bank Plc is processing the loan amount of USD 250,000 granting to FCRMA.
Output :
Providing job opportunity to the farmers, small traders and small rice millers. Keeping the stability of the domestic paddy and rice price. Gathering paddy and rice for national food security, using in emergency case and exporting rice to the worldwide.
Lesson learned :
	The importance role of the linkage between microfinance and small & medium enterprises is to stimulate the national economy.
Constraints :
Hard to build confidence and attract private commercial banks to join in the project. Insufficient small irrigation system in the rural areas. Lack of credit fund to cover the need of the project cost. Lack of investment to provide new modern equipment/ machinery.