New Financial Product Help Businesses Accelerate Growth

Through Harvest II’s grant, AMK introduces supply chain financing to help address MSME’s financial constraint.

Access to finance is critical for business growth, increasing working capital, improving production, and strengthening the supply chain. Many businesses find themselves unable to expand as they cannot access financing in a timely manner, consequently restricting the effective planning and managing of cash flow.

In January 2020, Feed the Future Cambodia Harvest II “Harvest II” awarded a grant to AMK Microfinance Institution to pilot supply chain financing (SCF) for horticulture MSMEs. SCF is a type of working capital designed to address a company’s short-term financing needs and is a fairly new financial product for AMK.

AMK promoted its SCF model, introducing the customized financing products and services to 26 SMEs (including five women entrepreneurs). As a result, AMK approved the financing of $1.5 million to four market actors including an exporter and input firms in the vegetable and longan subsectors.

Mr. Yim Bunthoeun, a longan exporter in Battambang was one of the actors who qualified for the loan. AMK approved loan  to Bunthoeun to use as working capital to increase his longan purchases. Bunthoeun uses this money to promptly pay farm owners for maintaining the longan farms before flowering and harvesting, and repays AMK after the product is sold. Bunthoeun said, “This loan is important for me as I can expand my purchasing and increase the amount of fresh longan export.”

Yim Bunthoeun collects fresh longan from farmers ready to export to Thailand.

To support Bunthoen on quality production, Harvest II linked the exporter to input firms Khmer Angkor Farmer (KAF) and Drone Khmer Technology (DKT) to receive technical production training and access quality inputs to boost longan yield. In addition, Harvest II supported the General Directorate of Agriculture (GDA) in delivering Cam-GAP training to 422 longan producers.  Forty of these producers applied for Cam-GAP certification, aiming to receive premium pricing for their quality products.

Harvest II assisted Bunthoeun access new markets by connecting him with the safe food mart of KCCV Company in Phnom Penh. The market is currently sourcing 100 kgs of fresh longan per week from Bunthoeun. Harvest II hosted a visit for the exporter to visit and learn about the processing lines of the processing company CSL Enterprise in Phnom Penh, as he would like to set up a longan drying facility to add value to longan. The project also connected him with various processors during business matching events, aiming to increase access to export markets and explore new business opportunities.

Harvest II organizes a business matching event for 16 longan actors to discuss collaboration opportunities.

Bunthoeun said, “I want to expand my export markets not just to Thailand. This is a great opportunity for me to connect with other business partners. Thanks to Harvest II, I have increased not just supply and quality but also access to new potential markets.”

AMK also approved and disbursed supply chain financing to Azaylla in the amount of $20,000. Azyalla used the entire financed amount for expansion of their working capital to a double increase of sales to retail markets such as Chip Mong and Grocerdel in Phnom Penh.

Through Harvest II’s grant program, the project supports various actors including processors, exporters, financial institutions, businesses and farmer associations not just improving production and supply chains, but also accessing new opportunities that help them grow and expand beyond their limits.