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H.E Dr. SON Koun Thor Advisor to Samdech Prime Minister Hun Sen,

Plenary Session VI : Poverty, Development Gap, and the MDGs Where do we go from here?. The 6 th Asia Economic Forum : “ Maximizing Asia’s Strategic Roles in the World: Opportunities, Challenges and Future Prospects ˮ. H.E Dr. SON Koun Thor Advisor to Samdech Prime Minister Hun Sen,

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H.E Dr. SON Koun Thor Advisor to Samdech Prime Minister Hun Sen,

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  1. Plenary Session VI : Poverty, Development Gap, and the MDGs Where do we go from here? The 6th Asia Economic Forum :“ Maximizing Asia’s Strategic Roles in the World: Opportunities, Challenges and Future Prospects ˮ H.E Dr. SON Koun Thor Advisor to Samdech Prime Minister Hun Sen, Vice-Chairman of Supreme National Economic Council, Vice-Chairman of Council for Agricultural and Rural Development Chairman and CEO of Rural Development Bank of Cambodia

  2. Introduction Royal Government of Cambodia has introduced two principal key mechanisms for poverty alleviation: 1-Public Investment Programs for rehabilitation and strengthening of infrastructures and expansion of service of social development. 2-Supporting and strengthening Microfinance services and MSMEs in rural areas.

  3. I- Continuing Government’s Policy Measures for Global Financial Crisis Impact 1- Macroeconomic Policy: 1-1 Monetary and financial policy: ensure the solvency and the strength of commercial banks and MFIs. 1-2 Fiscal policy: management of inflation and effectively mobilize additional resources 1-3 Policy to mobilize and increase disbursement of ODA: In 2009, RGC mobilized approximately USD 1 billion

  4. 2- Measures related to Structural and Sectoral Reforms: 2-1 Garment sector: Samdech Hun Sen Special Funds amount of USD 6 Million is to train around 40,000 workers. 2-2 Tourism sector: Ensuring peace, security, political stability, social order, tourist safety, and building more infrastructures …etc 2-3 Agriculture sector: RGC has provided RDB the “Agriculture Support and Development Funds” for purchasing, stockpiling and processing Cambodian rice.

  5. II- RDB’s Roles in Supporting Rural Economy • RDB is a key mechanism to support & strengthen micro-finance service in rural areas, develop, promote & finance SME especially to rice millers, • Play a leading role to negotiate with donors to attract funding and TA, • RDB and partners extended operations, as priority step, to border & remote areas which are economic potential areas for agriculture & agro-industry. • RDB is the vital mechanism to implement the Project of the Government. • RDB also provides training to microfinance and SMEs if they request.

  6. 1-Microfinance • Microfinance in Cambodia is considered by national and international observers as a key sector contributing to Cambodian poverty reduction in line with the Rectangular Strategy of the Royal Government. • By the end of 1991, there were only: - 4,000 borrowers - Loan outstanding: USD100,000 • As at June 2009: • Loan amounts: ~ USD 282 Million • 870,000 borrowers • Deposit amounts: ~ USD 7.5 million • 159,000 depositors

  7. 2-SMEs Support • With the vision of Samdech Hun Sen, Prime Minister of the RGC “Transform Cambodia become White gold exporter-rice” and my experience “ Linkage of Microfinance and SME “. • RGC has provided the “Agri. Support and Development Fund” to RDB for supporting private sector, especially small and medium enterprises, on a number of targets including :

  8. Providing short-term credit for collecting paddy/rice from farmers at appropriate price to maintain price stability and ensure food security. • Providing medium-term credit to rice millers to increase capacity in stockpiling, drying and processing. • Providing medium and long-term credit to support agricultural products for local consumption and export beside paddy/rice.

  9. III-Cooperation and Relationship • RDB is going to cooperate with BIDV/BIDC PLC., Canadia Bank PLC. and FTB PLC. for on-lending to the rice miller in order to purchase paddy from the farmers. • On Jan 07, 2010 RDB signed MOU for mutual cooperation between Cambodia , Laos, and Vietnam.

  10. IV-Challenges: • Interest rate is still high due to high cost. • Unfair Competitiveness in rural credit. • Lack of knowledge and information on market. • Poor logistic network

  11. V-Recommendations • RDB is continuing to develop the Microfinance and SME Integration in all provinces if possible. • RDB’s partners should reduce the lending interest rate. Because RGC has built many infrastructures in the rural areas. • RDB is trying to attract more funds for microfinance and SME in order to help reducing the lending interest rate to the rural people. These sources of funds would be from the new scheme is guarantee by development partner (i.e. ADB) • Capacity building to microfinance operators and SMEs is needed. • Establishing Credit Sharing System for microfinance in order to reduce credit risk and reduce investment.

  12. Thanks for your attention Contact Address: Rural Development Bank of Cambodia #9-13, St.07, Chaktomuk, Daun Penh, Phnom Penh, Cambodia. P.O Box: 1410, Phnom Penh, Cambodia. Phone: 855 23 220 810/811 Fax: 855 23 224 628 website: www.rdb.com.kh email: rdb@online.com.kh

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