MFI Report

PRASAC MFI was a former credit component of PRASAC project funded by the European Union and implimented by three ministries of the Royal Government of Cambodia. The project started in 1995 to rehabilitate and support agricultural sectors in six provinces around Phnom Penh. The PRASAC project concluded in December 2003.
However, to ensure the access to financial services to rural community and microenterprises beyond the closure of the project in 2002, the PRASAC Project Steering Committee made on a strategic decsion to transform its credit component in a licensed MFI. In March 2002, the transformation started by creating PRASAC Credit Association as credit operator registered with the National Bank of Cambodia (NBC).
In 2003, a trust fund called Cambodia Rural Development Foundation (CRDF) and PRASAC Staff Company were established to facilitate the transformation. With two initial shareholders, PRASAC MFI Ltd was established by registered with the Ministry of Commerce as private limitted liability company in August 2004 and got its license from the NBC in November 2004 to legally offering financial services to rural community and microenterprises.

The challenges are: 1) to continue serving the rural poor under high professional and moral standards implementing transparency and good governance on all operational levels; (2) to avoid mission drift; (3) to reinforce credit discipline among the staff and clients by strengthening the internal control system; (4) to diversify loan portfolio and review financial products and services to be competitive and suit clients' demands, and (5) look for external funding of about 2.5 MUSD to safeguard funds its expansion plans.
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