ASPIRE is a 7-year programme of the Royal Government of Cambodia.  The Programme became effective with the signing of the Financing Agreement between the Royal Government of Cambodia (RGC) and International Fund for Agriculture Development (IFAD) on 5th March 2015. The Programme Implementation Date is June 2015 and was officially launched on 8-9 October 2015. The Programme Completion Date is 31 March 2022 and the Financial Closing Date is 31 September 2022. The overall development goal of the ASPIRE Programme is to reduce poverty and to increase resilience of 144,000 poor and vulnerable smallholder farmers in Cambodia by increasing an average household agricultural production value by 20% and value of household assets by 25%.  The development objective is to establish an “enhanced Cambodia model of agriculture services which is demonstrated as effective for assisting a diversity of smallholder farmers to contribute to broad-based economic growth through profitable and resilience farm businesses and is adopted as policy by 2021”. The ASPIRE programme is implemented in 24 provinces of the country through the Provincial Sub-programme. To date ASPIRE has facilitated the development of more than 1,920 business clusters with almost 70,000 householder members. The programme also has been supporting more than 250 farmer organizations (FO) across the country and some of these business clusters are formed within FOs, based on specific crop/product or commodity.

In 2018, when PADEE, another RGC project funded by IFAD concluded after 4 years of implementation, the Improved Groups for Revolving Funds (IGRFs) formed under the PADEE were merged into ASPIRE as stated in the PADEE completion report where “a roadmap for the integration of PADEE activities (IGRFs) into the new IFAD programme ASPIRE was developed for the continuity of results”. In the ASPIRE midterm review, “support to existing (IGRFs)” was articulated.

Under PADEE, a total of 984 IGRFs were formed across 5 provinces, namely: Kandal, Takeo, Kampot, Prey Veng and Svay Rieng. Today most of the IGRFs are operational, providing credit to members for farming business and other needs with over 33,000 borrowers. Since the completion of the PADEE, the IGRFs have been operating relatively successful with the support from the contract PCG, where MFAs were recruited to provide monitoring and technical micro financial support to the groups. Each MFA is responsible for 30 groups. They work with the board members of the IGRFs to collection operation data to upload in the micro banking MIS managed by PCG. A comprehensive report then is produced monthly to provide to PDAFF in the five provinces. As of 24 December 2020, a total asset of the IGRFs is estimated about 77.3 Billion Riel (about $19.2 million) with a total equity of 67 Billion Riels (about $16.7 million), and total liability of 334,578,321 Riels. The total all IGRF’s Loan Outstanding (loan receivable) was recorded 53 Billion Riel (about $12.3 Million) and Cash in the in hand (bank) recorded at 26 billion Riels (about $6.5 Million). While the annual operational report for 2020 is yet to be completed, a projected income for 2020 for all IGRFs is estimated to be 13 billion Riels vs. an expenses of 3.1 billion Riels, thus anticipated a net profit of more of 9.9 billion Riels (about $2.2 million). For loan loss provision, it is estimated to be 3.3 billion Riels with portfolio at risk (PAR) about 7.4% ($1.3 million)- this is loan with late repayment of more than 30 days conduct an assessment of all the IGRFs’ performance, to assess feasible options to improve the revolving fund operation and to explore practical and formal options to consolidate and transform these small individual groups into a formal rural credit operation cooperative. It is expected that the feasibility assessment will provide practical recommendations with a road map to transform IGRFs into a formal registered- body that offers sustainable and affordable financial services to member farmers. The objectives of the proposed IGRF feasibility assessment are to:

• Complete a stock-taking of all the IGRFs in the five provinces to validate their operational performance, including loan portfolio and assets position;
• Provide strategic and practical recommendations/options for ASPIRE management and IFAD on a road map/formal steps to consolidate and transform the IGRFs into a farmer credit cooperative, with strong member ownership and options for mobilization of member savings and equity.
• Develop a clear blue print for the transformation including a three years’ business plan for the transformed institution.
• To articulate legal requirements and ownership structure of what rural member owned credit operator may entail.

Expected deliverables from the IGRF feasibility study are:

1. Inception report and desk Review
2. Field Survey and Assessment
3. Practical strategies and steps as road map to consolidate and transform IGRFs to become rural farmer credit cooperatives with clear recommendations to ensure member ownership and good governance. Feasibility of offering/facilitating holistic financial services – savings, credit (for production, marketing and other household needs), insurance, remittances etc., to the members. How IGRVs can be incentivized to transform needs to be spelt out.
4. Identify key legal requirements and formal processes to become rural credit operator
5. Develop a blue print for the transformation and systems requirement including organizational structure, governance, human resource requirement, MIS and software requirement, Financial and treasury management systems, Internal Controls etc.,
6. The feasibility report should project business plan and balance sheet for next three years. The report should also specify the budgets needed for the transformation.
7. Identify key risks that need to be addressed in the transformation.
8. IGRF Feasibility Study completion report in Khmer and English submitted to and approved by ASPIRE Secretariat Management.