ME&A Evaluation Provides Recommendations to Increase Access to Credit in Cambodia – ME&A
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ME&A Evaluation Provides Recommendations to Increase Access to Credit in Cambodia

ME&A Evaluation Provides Recommendations to Increase Access to Credit in Cambodia

How to modernize and harmonize Cambodia’s secured transactions regime to incorporate international best practices was the focus of a recent ME&A evaluation under the Institutional Support for Development Credit Authority (DCA) Credit Guarantee Programs task order.

To spur economic growth and contribute to a country’s economic and social goals, businesses need access to reasonably priced credit of appropriate duration. In emerging markets, small businesses find it extremely difficult, and in some cases impossible, to access the credit they need to expand operations and create jobs. USAID implements DCA guarantees in select developing markets using risk-sharing agreements to mobilize local private capital to fill this financing gap as well as demonstrate the long-term commercial viability of lending. In Cambodia, this involves a multi-year facility facilitating credit by providing guarantees to companies offering loans and financial leases to a predominantly female client base.

The ME&A evaluation resulted in a set of recommendations for additional security under these regimes for creditors to promote increased credit availability, lower interest rates, improved loan terms, and financial product innovation. Both public and private stakeholders expressed strong support for USAID’s assistance in the reform of Cambodia’s secured transactions regime during the evaluation.

Ms. Jamie Bowman, J.D., International Economic Legal Consultant, conducted the evaluation consisting of a desk review of pertinent policies and legislation as well as a legal diagnostic of the existing legal framework as compared to “international best practices”; two 10-day visits to Phnom Penh, which took place in December 2018 and August 2019; and follow-up communication needed for preparation of the final report in October 2019.

USAID awarded ME&A the Institutional Support for DCA Credit Guarantee Programs task order in September 2016 under the GSA Federal Supply Schedule 874 PSS/MOBIS Contract providing a full range of professional business services and related support products for consulting, facilitation, training, and program and project management. Under the task order, ME&A provides technical assistance and institutional support to USAID’s Bureau for Economic Growth, Education, and Environment (E3) to identify, design, and prepare DCA guarantees.