ADB provides $30.7M to Cambodia’s livelihoods, microfinance program

Microfinance Focus, Dec. 10, 2009: The ABD will assist Cambodia develop microfinance institutions and rural livelihood service providers in Cambodia’s Tonle Sap Basin region by providing $30.7 million in loans and grants program to aid a new Cambodia new initiative to boost income and food security in the region.

Two of ADB’s development partners in Cambodia, the International Fund for Agricultural Development (IFAD), and the Government of Finland will also contribute a further $19.1 million. The project will spur agricultural productivity and increase incomes for up to 2.5 million people in 630,000 households in the poor Tonle Sap Basin provinces of Banteay Meanchey, Kampong Cham, Kampong Thom and Siem Reap.

It will fund new or upgraded infrastructure, which is likely to include small-scale waterworks for irrigation and flood control systems, and improved farm-to-market roads. In addition the project will help to establish commune-based livelihood improvement groups that will provide revolving funds to members to buy agricultural supplies such as seeds and fertilizers. Support will be given to build up the capabilities of microfinance institutions and rural service agencies, to train farmers in modern agriculture technologies, and to boost access to information through internet centers or e-kiosks that can be utilized by commune members.

“The project will deliver a broad range of benefits including increased crop productivity and output, improved post-harvest management, market access and prices, greater access to rural financial services, and increased knowledge of agriculture technologies, all of which will help raise living standards, boost incomes, and provide livelihood opportunities for poor households,” said Ian Makin, Senior Water Resources Management Specialist with ADB’s Southeast Asia Department.

It is also part of a broader ADB-led initiative to develop the Tonle Sap Basin, and complements the work of other development partners in the agriculture sector, including IFAD. The project is strongly focused on providing grass roots support for individual communities, who will be fully involved in identifying priority investments that reflect their specific needs, the ABD said in a statement.

It also includes a gender action plan to ensure women are able to participate fully and to benefit equitably from the project. Cambodia’s economy has grown between 6%-10% in recent years, driven by the construction, garment and tourism industries. However, growth in the agriculture sector, which provides livelihoods for up to 85% of the population, has been uneven because of weak infrastructure, low productivity, a lack of access to markets and poorly developed rural financial services.

The result is persistently high levels of rural poverty and food insecurity, with almost a third of rural households lacking sufficient food during each year. The Ministry of Agriculture, Forestry and Fisheries is the executing agency for the project, which is due for completion around August 2017.