Annual Report

2014 “SUSTAINABLE GROWTH” ANNUAL REPORT

CONTENTS

01 BoD Chairman’s Message 03 President and CEO’s Message 05 Vision and Mission 06 Corporate Profile 07 Cambodia Key Economic Indicators 08 Key Financial Performance Indicators 09 Social Results 10 Social and Environmental Protection 15 Organizational Chart 16 Shareholders 17 Board of Directors 19 Committees of the Board 21 Executive Committee 23 Management Committee 25 Financial Services 29 Operational Performance Highlights 31 Financial Performance Highlights 39 Capacity Building 40 Marketing Activities 42 Risk Management and Internal Control 43 Balance Sheet 44 Income Statement 45 Statement of Changes in Shareholders’ Equity 46 Cash Flow Statement 47 Clienteles and Client Highlights 55 Branch Office Network BoD CHAIRMAN’S MESSAGE

“THE BUSINESS IS DRIVEN TO BE THE BEST FINANCIAL INSTITUTION WHICH PROVIDES EXCELLENT SERVICES AND GREAT CONVENIENCE TO OUR CLIENTELE”

CAMBODIA ECONOMY 2014 Cambodia's economic growth is forecasted to reach 7.2% in 2014 and 7.5% next year according to World Bank. The Cambodia's garments continues to be the key engine of growth, followed by construction. Poverty rate continued to fall to 18.6% in 2012; but the pace of poverty reduction has slowed down from 2004-2011, while higher rice prices propelled growth.

The banking sector has stabilized with rising foreign direct investment and private sector deposits. But the growth could be at risk, if labor unrest, floods, a further drop in rice prices, and potential regional political uncertainty flared up.

Key challenges for the Cambodia economy will be on how to stimulate agriculture, tourism and manufacturing sectors. Measures to increase investment interest in farm advisory service, seed development and irrigation infrastructure can increase agricultural productivity; and also business shall benefit from the removal of key constraints such as high electricity costs and intransparent practices.

FINANCIAL SECTOR IN CAMBODIA The National Bank of Cambodia (NBC) continues to actively support the government’s policies and maintain macroeconomic stability by implementing flexible and prudent monetary policy to support economic growth and in accordance with prevailing domestic, regional and global economic conditions. NBC has maintained price and exchange rate stability. Inflation rate has been within the manageable range of 4%.

The National Bank of Cambodia continues to improve payment systems to be more effective, secure and reliable in order to reduce the operation costs and facilitate the growth of economy and financial operations. Retail payment system is being developed to ease the payment via ATM or POS, mobile phone and internet.

As stated in banking and microfinance institute regulation, NBC has a supervisory role and issues licenses of banks and MFIs. Furthermore, this regulatory body oversees all operations of commercial banks, specialized banks, MFIs and credit operators. Public confidence in the financial sector has increased, which is led by NBC through the issuance of a number of Prakas and regulations designed to bring more order, better supervision and strengthening of the financial institutions.

1 Annual Report 2014 LONG TERM STRENGTHENING AND STABILITY GROWTH Over the last decade, PRASAC has multiplied double business size, customer base and number of employees. We have delivered strong and consistent long-term interest of shareholders. We have learned a lot from the challenges of the past several years that made PRASAC become a strong and stable institution for more than 20 years of sustainable growth. Our responsibility is to ensure the trust of our customers is ingrained in PRASAC’s culture.

ACHIEVEMENTS IN 2014 With remarkable economic growth and maintaining political stability, safety social security, and macroeconomic stability especially stability in financial sector, PRASAC has achieved excellent results: Profit after-tax of USD 30 million Return on Equity (RoE) 45% Return on Assets (RoA) 5.2% Maintaining very low Non-Performing Loan (NPL) 0.21% Total Assets USD 701 million Loan portfolio reaching USD 581 million with a total of 251,112 borrowers Balance of savings and deposits USD 305 million with a total of 360,349 depositors Expanding office networks up to 176 branches Installing 82 ATMs Employing 4,100 staff members. PRASAC’s mission is beyond commercial as it holds the responsibility toward enhancing its clients’ living standard which contributes to the country’s economic development, especially rural areas well-being enhanced. PRASAC has constructed 9 library buildings for public primary and high schools in Prey Veng, Kampong Cham, Kampong Thom, Siem Reap and Kampong Speu.

A FUTURE OF GROWTH OPPORTUNITY We are confident that PRASAC’s culture will remain intact and that it will evolve and strengthen over time to meet the challenges in the years ahead. PRASAC is in good hand of the leadership of Mr. Senacheert Sim, President and CEO, who has a deep under- standing of banking with more than 20 years of experience across financial sectors. He is supported by a great management team and experienced in banking system. We believe that PRASAC is exceptionally well positioned in the future.

On behalf of the board of directors, I wish to thank PRASAC’s management and staff for their hard work, dynamism and strong dedication to grow the business along with customers’ growth in harmony.

I also wish to thank the board of directors, shareholders, customers, partners, suppliers, the Royal Government of Cambodia (RGC) and especially the National Bank of Cambodia (NBC) for their continuous support and advice. We wish you all the best in the coming years and grow together with TRUST.

Ranjit Michael Samuel Fernando BoD Chairman

2 PRESIDENT AND CEO’S MESSAGE

“PERFORMANCE OF 2014 WAS AN EXCELLENT AND WILL CONTINUE TO PROVIDE EXCELLENT FINANCIAL SOLUTIONS. IT WAS THE IMPORTANT MILESTONE OF BECOMING THE BEST FINANCIAL INSTITUTION”

PRASAC has been receiving strong support from our shareholders, board of directors, customers, key stakeholders, regulators and employees. These supports make it clear that PRASAC is widely considered as a strong financial institution with excellent opportunities for growth.

Our strategy is clear and well understood. Our customers appreciate the knowledge, expertise, service and commitment of our management and staff especially they have strong confidence with our institution.

In 2014, PRASAC not only maintained the position as the market leader with the largest branch networks, high profitability, and loan portfolio, but also proved a record of sustainable growth. Here are some notes on key operational highlights: Total assets at year-end were USD 701 million, an increase of 55% compared to the end of 2013 Total loan portfolios was USD 581 million increased by 53% with the total of 251,112 borrowers PRASAC maintained its leading position in loan portfolio quality in the sector with the Non-Performing Loan (NPL) at 0.21 % By end of 2014, deposits outstanding balance reached USD 305 million with the total of 360,349 depositors Profit after-tax increased by 78% from USD 16.8 million to USD 30 million in 2014 Return on Equity (RoE) was 45% and Return on Assets (RoA) was 5.2%.

BUILDING ON OUR STRENGTHS TO GROW OUR BUSINESSES Our businesses advancements and the change in technology and expectations have transformed business models and redefined the competitive landscape. Meanwhile, the regulatory environment for financial sectors will continue to evolve.

Our financial strength gives us the flexibility to effectively manage regulatory changes while investing in our businesses growth. We have digitized and simplified processes to lower operation costs, deliver faster services and invest in our technology and innovation to shape the future with new products and services. For instance, this year we have invested in a new version of core banking system (Flexcube) which allowed us to customize our products and services to be more flexible based on demand of clients.

3 Annual Report 2014 CREATING OPPORTUNITIES FOR OUR EMPLOYEES Our staff’s commitment is to help clients succeed. They represent our brand with pride. We are particularly proud of how much our employees care about doing what’s right. Our employees, culture and brand are the key differentiations for our business. We enable success by fostering a culture of respect and inclusion where everyone can contribute and achieve their potential. The diversity of our workforce brings different ideas and abilities which plays a crucial role in serving our clients and driving productivity, innovation and growth.

BRINGING THE BEST OF PRASAC TO OUR CLIENTS AND STAKEHOLDER Sustainable growth has been key to PRASAC since its foundation, as reflected in our core values, taking the interests of all our stakeholders into account. We have noticed that an increasing number of clients are looking for a long-term, customized talent strategy and we continue to build relationships with our customers and deliver value to our shareholders. Our common vision is to become the first choice of our clients. Therefore, we regard customers’ demands as the center of our operation.

DELIVERING EXCELLENT SERVICES PRASAC positioned itself as the leading financial institution with strong infrastructure and platform to offer financial services to both rural and urban clients. For instance, PRASAC has a nationwide office network covering 25 provinces/cities through 176 branches of which 168 are online with real time transactions, 82 ATMs and operating in 12,839 villages equal 82% of total villages with 4,100 staff members. PRASAC partnered with various institutions to support education and financial education. As part of its corporate social responsi- bilities, PRASAC has constructed 9 library buildings for public primary schools and secondary schools in Prey Veng, Kampong Cham, Kampong Thom, Kampong Speu and Siem Reap. This is one of PRASAC’s programs of corporate social responsibility and community involvement; and we have more than 6,300 children instilling their reading habit and contributing to the positive change in the society. Although, PRASAC achieved the best performance in 2014, but there are still challenges for improvement and provide excellent and diversified products and services to its clients in 2015. PRASAC has strategic priorities as the following: Diversification of products and services Provision of excellent customer service Delivering sustainable growth Ensuring compliance and strengthening risk management and internal control Ensuring compliance human resource policy and strengthening code of conducts Enhancement of positive social and environment impact.

On behalf of PRASAC Management, I would like to thank the management team and staff members for their efforts and commitment, the Board of Directors for their supports and advices, and the Royal Government of Cambodia, regulatory bodies, the National Bank of Cambodia, and local authorities, for their continuous supports.

We are committed to delivering high quality growth, industry leading returns and long-term value. I am enormously proud of what PRASAC has achieved and extremely excited for the opportunities to achieve more in the future.

Senacheert Sim President and CEO

4 VISION AND MISSION

Our Vision Our Mission To improve the living standard of rural people and To provide sustainable access to financial services for rural contribute to sustainable economic development communities and micro-enterprises. by being a financially viable microfinance institution. CORPORATE PROFILE

PRASAC started in 1995 with funding from the European a microfinance deposit taking institution (MDI) license to allow Union as a development project. The credit component of the the head office to receive deposits. PRASAC project was implemented by three ministries of the Royal Government of Cambodia. The project aimed at With both a permanent license to conduct microfinance and a rehabilitating and supporting the agricultural sector in 6 MDI license, PRASAC is now focusing on strengthening its provinces around Phnom Penh namely Kampong Cham, operations and processes to take on a larger role in the Kampong Chhnang, Kampong Speu, Takeo, Prey Veng, and country’s financial development by providing financial services Svay Rieng. The project concluded in December 2003. to rural communities and micro-enterprises.

To ensure access to financial services for rural communities In July 2011, PRASAC was rated by a reputable international and micro-enterprises, PRASAC project steering committee rating agency, Planet Rating, which specializes in rating microf- decided to transform its credit component into a licensed MFI. inance businesses around the globe. PRASAC was graded In March 2002, the transformation was started through the “A-” with a “stable” outlook. The previous rating was “BBB+” by creation of the PRASAC Credit Association as a credit opera- Microfinanza Rating in July 2009. tor registered with the National Bank of Cambodia. In 2012, PRASAC increased its registered capital from KHR In 2003, a trust fund called the Cambodia Rural Development 15.4 billion to KHR 80 billion after Oikocredit divested. The Foundation (CRDF) and PRASAC Staff Company were estab- shares of Oikocredit were distributed among the existing five lished to facilitate the transformation. With two initial share- shareholders. The Belgium Investment Company for Develop- holders, PRASAC MFI Ltd. was established. It registered with ing Countries (BIO), the Dragon Capital Group (DCG), the the Ministry of Commerce (MoC) as a private limited liability Netherlands Development Finance Company (FMO), and the company in August 2004. In November 2004 it received its Lanka ORIX Leasing Company (LOLC) hold 22.25% each, and license from the NBC to provide financial services to rural PRASAC Staff Company (PSCo) holds 11%. PRASAC is communities and micro-enterprises. aiming to be the largest MFI in Cambodia with the largest branch network, profitability, and loan portfolio as well as To finalize the transformation, PRASAC began to identify sustainable growth. In 2012, it achieved another milestone by investors in 2005 and negotiate with them in order to replace becoming the first MFI to have ATMs, foreign exchange, money its temporary shareholders namely CRDF. In 2007, PRASAC transfer and payroll services in Cambodia. It also opened a new completed its transformation by replacing CRDF with five new eco-friendly head office. shareholders such as Belgian Investment Company for Developing Countries (BIO), Dragon Capital Group (DCG), In 2013, PRASAC achieved another milestone by receiving the Netherlands Development Finance Company (FMO), Lanka Outstanding Innovative Microfinance Product Award 2013 from ORIX Leasing Company Ltd (LOLC), and Oikocredit. International Data Group (IDG) and also received “Pricing PRASAC received a permanent license from the NBC in Transparency Award” from MFTransparency. December 2007. In 2014, PRASAC increased its registered capital to KHR 188 PRASAC engages primarily in the provision of microfinance billion which is roughly equivalent to USD 47 million. PRASAC services to the rural population of Cambodia through its head- is the best financial institution in the Kingdom of Cambodia. quarter in Phnom Penh and various provincial and district offices. The Ministry of Commerce and the National Bank of Cambodia certified the amended memorandum and articles of association for shareholder changes on 14 October 2008 and 06 November 2008 respectively.

In order to meet requirements and serve as a platform for future growth and diversification, PRASAC adopted Oracle FLEX- CUBE Universal Banking as its core banking system to ease banking transactions, build a competitive advantage, help us better serve targeted customers across Cambodia, and effectively manage the information system. On 27 August 2010, PRASAC obtained from the National Bank of Cambodia

6 CAMBODIA KEY ECONOMIC INDICATORS

INDICATORS 2010 2011 2012 2013 2014

Gross domestic product (GDP)

Nominal GDP (bn USD) 11.2 12.8 14.1 15.2 16.9

Real GDP (% change) 6.0 7.1 7.3 7.4 7.0

GDP per capita (USD) 795 897 945 1,036 1,139

Government budget

Revenues (%GDP) 17.0 15.6 14.4 14.9 15.4

Expenditures (%GDP) 19.9 19.6 19.7 20.3 19.0

Government balance (%GDP) (7.5) (7.4) (5.3) (5.4) (5.5)

Foreign trade and BoP (bn USD)

Trade balance (1.5) (1.4) (1.9) (1.9) (3.1)

Exports 3.9 5.2 6.0 6.9 7.8

Imports 5.4 6.7 7.9 9.0 10.1

Foreign direct investment 0.76 1.33 1.41 1.45 1.62

Financial market

Outstanding loans in the banking lending (bn USD) 25.4 33.6 35 25.2 16.2

Deposits in the banking system (bn USD) 26.3 19.4 29 1.32 -

Domestic credit (%) 35.3 37.7 34.0 28.0 25.0

Short-term interest rate (% p.a.) 15.0 15.0 13.7 13.0 13.5

Exchange rate (KHR per USD) 4,053 4,039 3,995 3,995 4,075

Note: bn = billion, BoP = Balance of payment

7 Annual Report 2014 KEY FINANCIAL PERFORMANCE INDICATORS

KEY FINANCIAL PERFORMANCE INDICATORS 2010 2011 2012 2013 2014

Profitability and efficiency Operating Expense Ratio 11.1% 9.6% 8.1% 6.6% 5.7% Average disbursed loan size (USD) 1,225 1,568 2,073 2,381 2,868 Number of loans per Credit Officer 156 166 134 161 131

Number of loans per staff member 72 78 60 68 59

Profitability Return on Assets (RoA) 3.7% 6.5% 5.7% 4.8% 5.2% Return on Equity (RoE) 26.5% 45.7% 39.5% 38.9% 45.0%

Coverage Area Province 24 24 24 24 25 District 164 182 186 189 193

Commune 1,398 1,453 1,499 1,548 1,577 Village 9,396 10,265 10,874 12,107 12,839

8 SOCIAL RESULTS INDICATORS 2010 2011 2012 2013 2014 Governance Number of board members 6 6 6 6 6 Loan Product Productivity loan portfolio (USD) 88,207,146 124,387,538 169,765,445 283,421,473 415,504,606 Social loan portfolio (USD) 16,745,625 26,852,143 45,092,149 95,651,955 165,039,159 Deposit Product Savings balance (USD) 940,316 2,583,948 6,619,023 16,633,180 32,816,626 Term deposit balance (USD) - 4,591,168 50,592,730 121,986,224 272,347,179 Client Outreach Number of borrowers in rural area 106,309 114,409 120,028 174,211 223,130 Number of borrowers in urban area 6,563 10,718 14,118 22,695 27,982 Number of borrowers as women 67,402 89,379 104,476 168,118 217,059 Number of group borrowers 14,557 13,252 9,509 13,876 15,086 Number of individual borrowers 98,315 111,875 124,637 183,030 236,026 Number of borrowers as MSMEs 38,279 61,809 105,867 184,885 249,373 Number of new borrowers 73,793 59,735 53,995 96,923 106,966 Portfolio Outreach by Lending Methodology Percentage of group lending 12.90% 10.59% 7.09% 7.05% 6.01% Percentage of individual lending 87.10% 89.41% 92.91% 92.95% 93.99% Percentage of MSMEs lending 39.01% 54.83% 77.72% 95.48% 99.29% Human Resource Management Total staff 1,440 1,501 2,135 2,765 4,100 Number of staff as women 292 332 586 795 1,145 Number of management 56 56 62 64 85 Number of management as women 2 2 6 8 10

Number of loan officers 702 745 953 1,166 1,844 Number of staff trained 2,336 3,103 5,440 7,965 11,335 Benefits Medical Program, Health and Accident Insurance, Maternity Benefit, etc. Social Responsibility to Client Smart Campaign’s Client Protection Principles Application of 7 Client Protection Principles Social Responsibility to Environment and Social Environmental policy Environmental policy for clients and institution is in place Library project - Project study 2 buildings 6 buildings 9 buildings

Student outreach in person - - 2,046 4,496 6,300 Client Satisfaction and Loyalty Client retention rate 51.33% 60.10% 65.31% 79.37% 76.45% Network Number of branch offices 142 161 167 173 176 Number of ATMs available for services - - 24 60 82

9 Annual Report 2014 SOCIAL AND ENVIRONMENTAL PROTECTION

PRASAC stands at the top rank among the financial industry. It originated from the joint development project between Royal Government of Cambodia and European Union with a mission to provide sustainable access to financial services for rural communities and micro-enterprises.

PRASAC is strongly committed to contributing to sustainable economic development through achieving its double bottom-line. It also includes ensuring the viable financial returns occur along with the environmental, social and community protection.

On top of participating in social and environmental protection, PRASAC develops its strategy and implementation of operations based on the Universal Standard of Social Performance Management (USSPM) and Smart Campaign’s 7 Client Protection Princi- ples (CPPs), local laws and regulations, international treaty, etc.

S&E VISION AND MISSION

PRASAC intends to promote growth, both of the company and society with clearly and carefully screening clients against the E&S exclusion list, while ensuring that it is in line with the applicable Cambodian environmental legislative requirements and international best practices.

PRASAC will educate its customers and the community in evaluating the environmental and social impact, mitigation and management of those risks. Monitoring will be done regularly to ensure effectiveness of this policy and implementation.

KEY INDICATORS OF E&S PROTECTION

PRASAC ensures effective social and environmental management practices in all its activities with a special focus on the following: Environmental Protection Social and Community Protection  Compliance with laws and regulations  Equal employment opportunity, no discrimination  Healthy workplace  Employee’s organization  Electricity and water usage  Retrenchment  Office material consumption  Staff grievance mechanism  Workplace communications  Child labor  Forced labor  Occupational health and safety  Customer service  Client complaint resolution

ENVIRONMENTAL PROTECTION PRASAC has developed its environmental and social protection policy and guideline to accelerate the implementation within each department. All steps in the loan process are built-in with the prohibition of giving credit to any clients who fall in the sectors of exclusion list. PRASAC has also assigned one staff member to be in charge of the participation and design of S&E training, coaching and monitoring and to measure the performance of environmental and social activities. Below is the PRASAC’s S&E exclusion list:

 Production or activities involving harmful or exploitative forms of forced labor/harmful child labor  Production or trade in any product or activity deemed illegal under host country laws or regulations or international conven- tions and agreements  Production or trade in weapons and munitions  Production or trade in alcoholic beverages (excluding beer and wine)  Production or trade in tobacco  Gambling, casinos and equivalent enterprises  Trade in wildlife or wildlife products regulated under CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora)

10  Production or trade in radioactive materials  Production or trade in or use of unbounded asbestos fibers  Purchase of logging equipment for use in primary tropical moist forest  Commercial logging operations for use in primary tropical moist forest  Production or trade in wood or other forestry products from unmanaged forests  Production or trade in products containing PCBs  Production or trade in pharmaceuticals subject to international phase outs or bans  Production or trade in pesticides/herbicides subject to international phase outs or bans  Production or trade in ozone depleting substances subject to international phase out  Production, trade, storage, or transport of significant volumes of hazardous chemicals, or commercial scale usage of hazardous chemicals  Drift net fishing in the marine environment using nets in excess of 2.5 Km in length  Production or activities that impinge on the lands owned or claimed under adjudication, by indigenous peoples, without full documented consent of such peoples  Businesses involved in the production, processing or distribution of illegal drugs  Pornography or the provision of products or services of a substantially similar nature

UTILITY CONSUMPTION

CATEGORY 2010 2011 2012 2013 2014

Energy Electricity and water in average per staff (USD) 119 124 125 165 158 Fuel in average per staff (USD) 372 360 284 261 241

SOCIAL AND COMMUNITY PROTECTION With the slogan “Growing Together”, PRASAC has built a culture of fair treatment for all types of staff, clients and communities as the whole. The PRASAC environmental and social protection policy is clearly stated and implemented towards clients, employees, communities and concerned stakeholders. PRASAC Human Resources policy puts in place 100% transparency for both internal and external parties.

CATEGORY 2010 2011 2012 2013 2014

Employment Number of staff 1,440 1,501 2,135 2,765 4,100 Number of female staff 292 332 586 795 1,145 Staff Capacity Building Number of new recruits trained 312 246 832 893 1,912 Number of existing staff trained 1,490 2,670 3,924 6,761 8,771 Number of interns 35 groups 27 groups 13 groups 20 groups 8 groups Number of volunteers 25 31 32 41 51 Corporate Social Responsibility Number of libraries - Project study 2 buildings 6 buildings 9 buildings Student outreach - - 2,046 4,496 6,300

11 Annual Report 2014 CATEGORY 2010 2011 2012 2013 2014 Loan Outreach Number of bio-gas loans 1,193 1,454 1,288 741 768 Number of housing loans 5,680 8,134 11,137 22,049 35,472 Number of SMEs financed 2,414 3,836 5,925 12,943 14,795

PRASAC has developed its educational loan product with the purpose of giving more chances to students to finish their under- graduate degrees. At the same time, PRASAC provides house improvement loans to help clients to fulfil family needs. With a clear direction, PRASAC together with its partner, the National Biodigester Program (NBP), work in promoting environmental protection, sanitation and social well-being. The library project was launched in 2011 with an aim to promote a reading culture among pupils, students and contribute to the Rectangular Strategy of the Royal Government of Cambodia to achieve Cambodia’s Millennium Development Goals (CMDG). As of 2014, PRASAC already built up 9 library buildings and has handed them over to schools for use. In addition, PRASAC with its partner Room to Read and the Ministry of Education Youth and Sport still provides coaching for the school in managing the library. Aside from the library project, PRASAC contributes to the school by giving stationery to students and other competitions such as “the Dream Comes True” with initiation of the National Bank of Cambodia in the occasion of Global Money Week. Together with Operation Smile Cambodia organization, PRASAC has contributed in funding to the surgery and treatment of rural poor kids who faced the disease of cleft lips and palate. So far, more than 3,000 cleft lip Cambodian children have a beautiful smile.

In the year of 2014, PRASAC received Platinum grade award on social and environmental protection after the GIIRS (the Global Impact Investment Rating System) rating. This rating shows the recognition of good modelling in business application of PRASAC to respond to business impacts, communities, social and environmental protection, employees and good governance. Beyond these activities, PRASAC has participated in the promotion of good health through cycling event and football. In matches towards Cambodia Microfinance Association (CMA) Champion, PRASAC football team got the champion and the winning prize. PRASAC has allocated its winning prize by purchasing the sport stationary for the 9 libraries financed by PRASAC.

12 PRASAC Goes BeyondPRASAC Financial Goes Return, Beyond Paying Financial Back to Return, Society Paying Back to Society

ORGANIZATIONAL CHART

Shareholder Assembly Meeting

Board of Directors

Remuneration Audit Committee Risk Committee Remu. Committee Committee

Chief Executive Officer

Internal Audit Risk Management Executive Committee

Asset and Liability Credit Other Management Committee Committee Committee

Operations Financial Business Marketing HR BP & Strategies Management Management Management Management Management

Regional Regional Regional Regional Regional Regional Regional

Branches Branches Branches Branches Branches Branches Branches

15 Annual Report 2014 SHAREHOLDERS

The registered share capital of the company 2014 is KHR 188 billion equivalent to USD 47 million distributed among the five shareholders: Belgian Investment Company for Developing Countries (BIO), Dragon Capital Group (DCG), Netherlands Development Finance Company (FMO), Lanka ORIX Leasing Company (LOLC), and PRASAC Staff Company (PSCo). Details of the shareholders are as follows:

Belgian Investment Company for Developing Countries (BIO) is a member of EDFI, the Association of European Development Finance Institutions. BIO partici- pates in European Financing Partners/EFP, a co-financing facility established by 10 of the EDFI members. Its purpose is to facilitate the financing of private sector projects in the African, Caribbean, and Pacific states in collaboration with the Europe- an Investment Bank.

Dragon Capital Group (DCG) is an integrated investment group centered around the emerging financial markets of frontier Asia, notably Vietnam. The firm is known both for its position in asset management and proprietary investing.

IT Committee

The Netherlands Development Finance Company (FMO) supports the private sector in developing countries and emerging markets in Asia, Africa, Latin Ameri- ca, and Central and Eastern Europe. It does this with loans, participation, guaran- tees, and other investment promotion activities.

Lanka ORIX Leasing Company Plc (LOLC) was incorporated in 1980 as the pioneering leasing company in Sri Lanka by a consortium led by ORIX Corpora- tion Japan. Today, it is a leading conglomerate operating in eight sectors: financial services, agriculture, plantation, leisure, construction, renewable energy, trading and manufacturing. With over 106 companies under management, LOLC is truly positioned as the number one conglomerate to facilitate the growth economy of Sri Lanka.

PRASAC Staff Company (PSCo) was established under the law and general provisions of the Kingdom of Cambodia and has the following objectives: to make equity investments in PRASAC MFI Ltd. and to manage the investments in accordance with high ethical and professional standards, transparency and good governance. The company may engage in other capital and asset management, investment, and trading as well as financial or other activities and services which relate directly or indirectly to the above objectives or similar purposes, and are characteristic of the development of the company’s operations.

16 BOARD OF DIRECTORS

RANJIT MICHAEL SAMUEL FERNANDO CHAIRMAN Ranjit is Team Leader ICT Capacity Building Program, implemented by the Government of Sri Lanka and funded by the World Bank. He is also a team leader in consultancy assign- ment funded by the World Bank for the setting up of the Housing Finance Corporation in the Maldives. He is an expert in Project/SME/Microfinance Financing Specialist, Development Banking, Legal Aspects relating to Credit and Banking, Institutional Development and Strategic Planning, and Corporate Governance. He holds Attorney at Law (1st Class Honours), Ceylon Law College, Sri Lanka; Bachelor of Laws (Hons), University of Sri Lanka; Fellow of the Chartered Institute of Bankers, United Kingdom; Fellow of the Chartered Institute of Management Accountants, United Kingdom.

JOSEPH HOESS MEMBER Hoess is a Director of Dragon Capital Clean Development Investments Ltd. He previously worked as a career expatriate for ABN AMRO Bank NV from 1991-2006. While with ABN AMRO, he held senior management positions in both commercial and investment banking capacities while posted in the United States, Europe, Brazil, China and Thailand.

Mr. Hoess received his B.A. in History with honors from Northern Illinois University in 1988 and an MBA from the University of Illinois at Chicago in 1992. He is a Graduate of the Australian Institute of Company Directors and was a member of the Board of Directors of ACLEDA Bank Plc. from 2005-2010.

HANCO HALBERTSMA MEMBER Hanco is currently the Managing Director of Priority Project Limited. He has more than 20 years of experience in the financial sector. He served more than 16 years in ING in various capacities across different regions including Europe and Asia.

He specialized in consulting service to banks, insurance companies and other financial institutions in different areas such as strategy, organization, credit, treasury, risk management, HRM, operations/IT and Finance. Hanco received several diplomas from Dutch Banking Institute. He graduated with a Master Degree in Business Administration from the University of Groningen, The Netherland (1988).

17 Annual Report 2014 ISHARA C. NANAYAKKARA MEMBER Ishara is the Deputy Chairman of Lanka ORIX LEASING Company Ltd. He is the Manag- ing Director of Ishara Traders, the pioneering importer of reconditioned motor vehicles in Sri Lanka.

Having obtained a diploma in Business Accounting from Australia, he worked in Japan for two years with the largest exporter of reconditioned motor vehicles Yamagin Corporation, Tokyo. Ishara is a Director of Ishara Plantations (Pvt) Ltd, and Ishara Property Development (Pvt) Ltd. Mr. I C Nanayakkara also serves as a board of director of all LOLC subsidiaries.

SAM OEUN OUM MEMBER Samoeun holds MBA of Banking and Finance and he obtained a Diploma in Accounting and Commerce in 1988 and holds a Bachelor degree in Business Management. Since 1995, he has attended several training courses related to microfinance operations and management. He is also an accredited Micro Finance Training of Trainer certified by ADBI, TLDC of the WB, and UNCDF. He used to work as Chief Accounting Officer in Takeo province commerce department. Since 1995, he has worked with PRASAC credit program. He was promoted as Deputy General Manager of PRASAC MFI in early 2007. He currently holds the position of Execu- tive Vice-President & Chief Operations Officer. He was elected as Chairman of Board of Director of PRASAC Staff Company (PSCo., Ltd) since 2003, and he was re-elected as the Chairman PSCo., Ltd until now.

TOUCH PHAI MEMBER Touch has years of working experiences at all corporate levels, educational backgrounds and continuous professional development. He is working as a Business Analyst/CAE for Daun Penh Cambodia Group. He spent time almost two decades worked in different industries for both non-profit and profit organizations as an Internal Audit Director, Finance Manag- er, Independent Board Member, Credit Administrator, Finance Operations Executive, Consult- ant, Internal Audit Supervisor, and with UNTAC and US Embassy. He earned MBA (Finance) from Charles Sturt University, Australia; MBA (Accounting) from MUM, IOWA, USA; and Doctor of Business Administration from Preston University and other certificate LCCI, UK. Overseas Main Cashier, Foreign Service Institute, Washington D.C. U.S.A , Good Governance and Effective, Shorecap Exchange, IFC, Washington D.C. and other numerous overseas and local trainings for the corporate level.

18 COMMITTEES OF THE BOARD

AUDIT COMMITTEE To ensure the quality and meet the business objectives in 2014, Audit Committee has done the jobs as predefined calendar including report review, system and policy setting and other compliance check. Audit Committee has performed similar work from quarter to quarter, but the scope is updated continuously to ensure that 360-degree aspect of the business is covered. Among the jobs that Audit Committee has done including: Reviewed annual internal audit report for the year end 2013. Reviewed external audit report for the year end 2013. Reviewed and recommended findings of on-site inspection of National Bank of Cambodia (NBC). Reviewed IT audit report. Reviewed special case audit report. Reviewed report on loan portfolio quality for the rapid growth branches. Reviewed report on Laws and Regulations Compliance. Reviewed and approved Internal Audit Manual and Internal Audit Charter. Reviewed and approved Annual Audit Plan 2015.

RISK MANAGEMENT COMMITTEE During 2014, the Risk Management Committee worked closely with the Risk Management Department and the Board of Directors to revise or implement new Risk Management Policies as follows:  Anti-money Laundering Policy  Assets and Liabilities Management Policy  Credit Policy Statement and Credit Policy  Information and Communication Technology and Security Policy  Operational Risk Management Policy  Risk Management Policy  Whistle Blowing Policy In addition, Risk Management competed PRASAC’s first ever Business Continuity Plan in case one of its major facilities may incur a force majeure and developed a new risk dashboard monthly report for the Board of Directors.

In the area of operational risk, the PRASAC Risk Management Department performed a detailed operational risk assessment in conjunction with the IT and Core-Banking Departments in 2014. This type of operational risk assessment will eventually be rolled-out and encompass the work of all Departments.

The PRASAC Credit Policy was revised to update and expand portfolio management tools and limits, establish a risk rating system and ensure appropriate authorization approval for risk being assumed. Besides the revision to the Credit Policy, the Risk Manage- ment Department worked with Frankfurt School and the Risk Management Committee to craft a detailed SME loan application and train credit staff on SME loan analysis.

The Assets and Liabilities Policy was established in 2014 to guide Treasury Department in managing PRASAC’s day to day financial market risks. It establishes the measures to monitor these risks and sets limits in accordance to both regulatory requirements and PRASAC’s, often more conservative, tolerance level as determined by the Board of Directors.

REMUNERATION COMMITTEE In 2014, Remuneration Committee conducted one meeting. The committee advised management regarding the latest developments:

 Steep increase of staff numbers: up by 48% in 2014, from 2,765 to 4,100 staff members.  Improved recruitment policies and procedures.  Implementation of a new information technology tool for human resource management.  Execution of an extensive training program.  Salary increase and bonus pool for the company’s staff.

19 Annual Report 2014 Show ATM Card to Get Discount Anywhere with this Sign

Discount EXECUTIVE COMMITTEE

SENACHEERT SIM PRESIDENT & CEO Senacheert holds Master and Bachelor Degrees in Business Administration and obtained Diploma in Accounting and Finance in 1994. Since 1995, he has attended several training courses related to microfinance operations and management. He is also an accredited Microfinance Training of Trainer certified by ADBI, TDLC of the WB, and UNCDF.

He used to work in banking sector, and he started working with PRASAC since 1995 as Credit Officer and was promoted to various positions such as Accountant, Branch Manager, MB Trainer and Supervisor, Finance Manager. From mid-2002, he used to hold positions of Branch Manager, Operations Manager and Deputy CEO with another MFI before joining PRASAC as General Manager in late 2003. He is currently holding the position of President & Chief Executive Officer.

SAM OEUN OUM EVP & CHIEF OPERATIONS OFFICER Samoeun holds MBA of Banking and Finance and he obtained a Diploma in Accounting and Commerce in 1988 and holds a Bachelor degree in Business Management. Since 1995, he has attended several training courses related to microfinance operations and management. He is also an accredited Micro Finance Training of Trainer certified by ADBI, TLDC of the WB, and UNCDF.

He used to work as Chief Accounting officer in Takeo province commerce department. Since 1995, he has worked with PRASAC credit program. He was promoted as Deputy General Manager of PRASAC MFI in early 2007. He currently holds the position of Execu- tive Vice-President & Chief Operations Officer.

SOPHAN OUM EVP & CHIEF FINANCIAL OFFICER Sophan holds Master Degree in Business Administration and holds Bachelor's Degree in economics, specializing in banking and finance.

Before joining PRASAC's team, Sophan had many years of experience in the field of Accounting Management; Banking and Finance Management and CFO position of other MFI, Commercial Bank and NBC as well as private companies. He joins PRASAC as Deputy General Manager and Chief Finance Officer in 2007.

21 Annual Report 2014 VANTHAN SOU SVP & CHIEF HUMAN RESOURCE MANAGEMENT Vanthan holds MBA and holds Diploma in Banking in 1988. He is also a certified TOT on Principles of MFIs and Delinquency Management certified by CGAP & EDA Rural Systems Pvt Ltd,. Since1982 he has attended several training courses related to banking operations management, microfinance operations management and human recourse management. Vanthan had more than 20 years of experience in various positions with PRASAC project, NBC and other MFIs by starting from Credit Officer, Accountant, Micro Banker and Teller, Internal Auditor and Field Supervisor, District Bank Manager, Provincial Credit Coordinator, Vice Credit Department Manager, Branch Manager, Area Manager, and Regional Manager. Vanthan rejoined PRASAC in 2009 as Human Resource Manager. He was promoted to be a Senior Vice-President & Head of Human Resource Division in 2010.

SOKHIM NEANG SVP & CHIEF BUSINESS MANAGEMENT Sokhim is an Accredited Micro Finance Training of Trainer certified by ADBI, TLDC of the WB, and UNCDF. He holds Master Degree in Business Administration and obtained bachelor Degree of Science in Agronomy in 1997.

He has attended many courses related to microfinance operations and other courses. He started working in microfinance sector in 1998 as Credit Officer then was promoted to be a Junior Internal Auditor, Senior Internal Auditor, Deputy Operations Manager, Deputy Credit Manager, Credit Manager. He was promoted to be a Senior Vice-President & Head of Business Management Division in 2010.

SONY SAY SVP & CHIEF MARKETING MANAGEMENT Sony is an accredited trainer of trainers in microfinance certified by ADBI, TDLC of the WB, and UNCDF. He holds a Master's Degree in Business Administration and a Bachelor's Degree in Marketing Management. He has attended numerous local and international training courses in Asia and Europe related to microfinance operations, product development, client management, and marketing management. He has more than 13 years of experience in Marketing Management, Product Development and Management in the social and private sectors. He joined PRASAC MFI in early 2005 as Chief of Marketing and was promoted to Marketing Manager in 2007. He was promoted to be a Senior Vice-President & Head of Marketing Management Division in 2010.

22 MANAGEMENT COMMITTEE

ASSET AND LIABILITY MANAGEMENT COMMITTEE

The Asset and Liability Management Committee (ALCO) met 11 times on a monthly basis and here were 5 main activities in 2014: Revisited and endorsed Asset Liability Management (ALM) policy and tool for the second version. Endorsed new funding proposals of USD 121 million; and renewal funds of USD 19 million. Determined ALM strategies and set actions to minimize financial risk including interest rate risk, foreign exchange risk, liquidity level improvement and capital adequacy ratio enhancement. Approved counterpart limit on overnight balance, short-term investment and foreign exchange settlement. Approved the first version of Contingency Funding Plan policy.

CREDIT COMMITTEE In 2014, the credit committee upgraded the structure and work-flow based on expert’s recommendations. The objective was to strengthen the loan quality and provide faster service to clients. Client growth rate was approximately 28% in 2014, growing from 196,906 in 2013 to 251,112 borrowers with portfolio growth of about 53%. The solid experience and competency of the credit committee in both branches and head office allows PRASAC to deeply analyse its client situation and maintain good loan quality. The Non-Performing Loan (NPL) rate is 0.21% at the end of 2014. It means that PRASAC can be classified as the leading microfinance institution in Cambodia in terms of loan portfolio and loan quality.

The small loan size is still the main area for PRASAC to grow for both total loan portfolio, number of client and reduced exposure size. The average loan outstanding per client was USD 1,925 in 2013 and USD 2,312 in 2014.

23 Annual Report 2014

FINANCIAL SERVICES

CREDIT PRODUCTS

Group Loans

PRASAC grants group loans to low income households in both rural and urban areas. The majorities of the clients’ occupa- tion are related to rice production, farming activities and other income-generating activities such as selling and service-pro- vided businesses. The amount of the group loan is up to USD 500 per group member or equivalent to Khmer Riel and Thai Baht per member, with flexible repayment modes and in a short-run period of up to 24 months. The annual interest rate varies from 31.2% to 33.6%.

Micro Loans

Micro loans are offered to micro-enterprises where a large majority of which are family-owned businesses, operated mainly by family members and normally located in market centers, nearby district or provincial centers with no more than 10 employees. The clients’ business activities include trade, agriculture, production, and other legitimate income-generating activities. The amount of such loan is up to USD 1,500 or equivalent to Khmer Riel and Thai Baht. Annual interest rate is from 28.8% to 33.6% with loan term up to 48 months and with flexible repayment modes.

SME Loans

SME loans refer to loans offered specifically for small and medium enterprises where enterprise clients, whose business activities are in agribusiness, trade, manufacturing and services sector, having 10 to 100 employees with assets from USD 50,000 to USD 500,000. The business sites should be in provincial cities and capital of Phnom Penh. The loan size is up to USD 100,000 or equivalent to Khmer Riel and Thai Baht. Annual interest rate is from 14.4% to 21.6% with loan term up to 60 months with flexible repayment modes.

Personal Consumption Loan

PRASAC provides personal consumption loans to clients to purchase personal consumption materials or for personal expenses, including furniture, equipment, wedding receptions or other materials. The loan size is up to USD 50,000 or equivalent to Khmer Riel or Thai Baht, with loan term up to 60 months with flexible repayment modes. The annual interest rate is from 15.6% to 31.2%.

Education Loan

PRASAC offers loans to students who need money to pay for school fee. The loan is designed on the goal of social development with the interest rate of just 14% annually. The loan size is USD 500 with 12 months term and no collateral required.

25 Annual Report 2014 Emergency Loan

PRASAC offers loans to clients who have suffered from natural disasters and fires to restore the client’s business activities and immediately re-building up their household. The annual interest rate is 24% with a loan size of USD 500 or equivalent to Khmer Riel or Thai Baht, with loan term up to 12 months with flexible repayment modes.

Home Improvement Loan

To improve clients’ lifestyles, PRASAC has developed one type of loan for clients’ existing houses renovation. A client can borrow up to USD 50,000 or equivalent to Khmer Riel or Thai Baht. The loan term is up to 60 months with flexible repayment modes and an annual interest rate is from 15.6% to 31.2%.

Motor Loan

PRASAC has developed loans for clients to buy motorbikes. The client can borrow up to USD 2,500 with a term up to 36 months with flexible repayment modes, annual interest rate is from 21.6% to 31.2%.

Bio-Gas Loan

In collaboration with the National Biodigester Program (NBP) and in light of the need to reduce poverty and protect environment, PRASAC has developed bio-gas loans for people in rural areas who can collect animal waste and use it to produce bio-gas. The loan is up to USD 1,000 with the loan term up to 24 months, the annual interest rate of 14.4% and flexible repayment modes.

Invoice Discounting

PRASAC has developed invoice discounting loan in the form of short-term borrowing. It is used to increase clients’ working capital and cash flow. It allows clients to withdraw money against sale invoices before their customers have paid. The maximum amount is available up to 70% of sales invoices with maximum amount of USD 50,000. The loan term is up to 90 days; the annual interest rate is from 24% to 30%.

26 BANKING SERVICES

Savings Accounts

PRASAC makes significant efforts to mobilize deposits to broaden outreach and diversify its banking products. PRASAC deposits cater to all segments of the population in particular to the poor. The initial opening balance is as low as USD 1 and minimum maintenance balance is only USD 1. The interest rate for savings account is 2.5% per annum for Khmer Riel and 2% per annum for US dollar or Thai Baht. Withdrawal, transfer and payment are convenient; depositors can make transactions at PRASAC offices during working hours or through ATMs 24/7.

Unfixed Deposit Accounts

Unfixed deposit accounts are offered in response to the needs of those clients looking for higher interest rates on their saving balances. The initial opening balance and minimum maintenance balance is as low as at USD 100. The interest rate for unfixed deposit accounts is 4% per annum for Khmer Riel and Thai Baht and 3% per annum for US dollar. Withdrawal, payments or transfers is convenient; depositors can make transactions at PRASAC offices during working hours or via ATMs 24/7.

Retirement Accounts

Retirement accounts are offered to corporate client (legal entities) for managing pension and retirement fund for their employees. The accounts can be opened in Khmer Riel or US Dollar with an interest rate of 8.5% and 7% per annual for Khmer Riel and US Dollar respectively. All funds will be transferred from the savings account of the employer into savings accounts of employees according to the terms and conditions agreed by both employer and employees.

Term Deposit Accounts

PRASAC offers an attractive interest rate for term deposit accounts. This is an optimum investment for the clients, having high security and return. The interest rate is fixed for the whole term of the deposit. Interest is accumulated daily and it can be paid monthly or by maturity. The minimum deposit balance is USD 50 to open an account. Renewal of term deposit accounts can be made automatically or on pre-notification.

Domestic Transfer

Clients who have or do not have savings accounts with PRASAC can transfer fund to other recipients who have or do not have accounts with PRASAC. Inter-bank transfer is available for the corresponding banks in Cambodia. Clients can transfer fund from any branches or ATMs throughout the country. With an increasing number of office networks in Cambodia, the domestic fund transfer provides PRASAC’s clients with a competitive advantage, high convenience and security.

27 Annual Report 2014 Foreign Exchange

PRASAC’s foreign exchange service is established to provide clients with currency conversion with competitive exchange rates. Foreign exchange service is offered to general public, since PRASAC was granted a foreign exchange license in 2012 from the National Bank of Cambodia. The service is available in 3 currencies: Khmer Riel, US Dollar and Thai Baht.

Automatic Teller Machines (ATM)

PRASAC introduced ATM service in 2012. This service provides convenience for our clients since they can perform transactions by themselves. PRASAC ATMs are available at 24/7 a week in all provinces/cities. By 2014, we have installed 82 ATMs in Cambodia.

Clients can perform many transactions via PRASAC ATM including withdrawal, balances inquiry, PIN code change, bill payment, mobile top up and fund transfer to both accountholders and non-accountholders. There is no issuance and maintenance fee. Cash withdrawals and transfers limit are up to USD 1,000 for VIP Card, USD 2,000 for VIP Plus Card and USD 2,500 for VIP Plus Chip Card.

Payroll Service

The payroll service is designed to help corporate clients in managing salary to their employees. This allows employer to pay salary directly into employees’ account with high security, confidentiality, efficiency, and productivity for both employers and employees.

Maybank Money Express

Currently clients can transfer money from Malaysia to districts in all provinces and cities in Cambodia by using PRASAC networks and the Maybank Money Express service. In collaboration with Maybank, PRASAC, in late 2012, introduced this distinctive type of service to meet the clients’ needs; especially Cambodians who are working abroad and who wish to send money to their families in Cambodia. In just a few minutes, money which is transferred from abroad can be withdrawn at PRASAC’s office with more than 168 online offices throughout the country.

Bank Confirmation

PRASAC offers a bank confirmation service to clients who maintain accounts with PRASAC. Clients can request this service at any online branches to confirm their account balance transaction and history. The bank confirmation issued to customer will build more trust to their business partners or third parties.

28 OPERATIONAL PERFORMANCE HIGHLIGHTS

OPERATING AREA AND BRANCH NETWORK

DESCRIPTION 2010 2011 2012 2013 2014 Number of province 24 24 24 24 25 Number of district 164 182 186 189 193

Number of commune 1,398 1,453 1,499 1,548 1,577

Number of village 9,396 10,265 10,874 12,107 12,839

During 2014 PRASAC expanded to other 4 districts, 29 communes and 732 villages. As a result, PRASAC operated in 25 provinces, 193 districts, 1,577 communes and 12,839 villages at the end of 2014.

LOAN PORTFOLIO

CHANGE CHANGE DESCRIPTION 2010 2011 2012 2013 2014 (AMOUNT) (%)

Total loan 104,952,771 151,239,681 214,857,594 379,073,429 580,543,766 201,470,337 53.15%

Group loan 2,313,006 2,357,981 1,932,893 4,226,836 4,799,490 572,654 13.55%

Individual loan 102,639,765 148,881,700 212,924,701 374,846,594 575,744,276 200,897,682 53.59%

Loan in KHR 28,891,512 38,142,748 42,876,997 41,949,899 46,651,547 4,701,648 11.21%

Loan in USD 75,960,401 109,788,864 165,707,651 325,323,675 511,346,925 186,023,250 57.18%

Loan in THB 100,859 3,308,068 6,272,946 11,799,856 22,545,294 10,745,438 91.06%

Loans can be disbursed in Khmer Riel, US Dollar and Thai Baht currency. They are classified as group loans or individual loans. Individual loans represented 99.17% of the total portfolio. Group loans outstanding increased by 13.55% during the year, while individual loans increased by 53.59% or USD 200.9 million. Loans in Khmer Riel increased by 11.21%, loans in US Dollar increased by 57.18% and loans in Thai Baht increased by 91.06%.

BORROWERS

CHANGE CHANGE DESCRIPTION 2010 2011 2012 2013 2014 (AMOUNT) (%)

Total borrowers 112,872 125,127 134,146 196,906 251,112 54,206 27.53%

Borrowers as group 14,557 13,252 9,509 13,876 15,086 1,210 8.72%

Borrowers as individual 98,315 111,875 124,637 183,030 236,026 52,996 28.95%

Borrowers as woman 67,402 89,379 104,476 168,118 217,059 48,941 29.11%

Borrowers as man 45,470 35,748 29,670 28,788 34,053 5,265 18.29%

At the end of 2014, the number of active borrowers was 251,112, an increase of 27.53% over the previous year. Group loan borrowers increased by 8.72% and individual loan borrowers increased by 28.95%. Female borrowers increased by 29.11% and male borrowers increased by 18.29%.

29 Annual Report 2014 LOAN DISBURSEMENT

LOAN DISBURSEMENT In 2014, PRASAC disbursed loans totaling of USD 627,993,964, an increase of 42.20% over the previous year. The number 700,000,000 219,040 250,000 of loans was 219,040, an increase of 600,000,000 200,000 18.47%. The average disbursed loan size 500,000,000 184,883 627,993,964 was USD 2,867. 400,000,000 126,996 123,970 150,000 300,000,000 114,834 441,617,045 100,000 200,000,000 257,954,761 199,097,850 100,000,000 50,000 112,429,346 0 2010 2011 2012 2013 2014

Total Disbursed Amount (USD) Total Number of Loans Disbursed

LOAN PORTFOLIO QUALITY

CHANGE CHANGE PAR IN USD 2010 2011 2012 2013 2014 (AMOUNT) (%)

PAR Amount (30 days) 1,067,394 211,380 426,806 671,111 1,194,604 523,493 78.00%

Principle Past Due 982,561 180,985 264,846 392,360 744,738 352,378 89.81%

PAR Ratio (30 days) 1.02% 0.14% 0.20% 0.18% 0.21% 0.03% 16.67%

Repayment Ratio 96.48% 99.67% 99.67% 99.68% 99.58% -0.10% -0.10%

At the end of 2014, the Portfolio at Risk (PAR) ratio was 0.21% and the repayment ratio 99.58%. The high quality of the loan portfolio was very good due to good monitoring from all levels of staff, well-trained staff, especially Credit Officers, well-established credit policy and procedures, and clear loan recovery policy. In addition, the FLEXCUBE system can provide fast, accurate data and information to staff to monitor, follow up and analyze loans.

SAVINGS AND DEPOSITS

DEPOSITS A deposit product was launched on Febru- 400,000 360,349 350,000,000 ary 14, 2011 in 24 offices then increased 350,000 300,000,000 to 168 offices by December 2014. As of 302,917 300,000 305,163,807 December 2014, the number of depositors 250,000,000 250,000 was 360,349, an increase of 19% over the 200,000 200,000,000 previous year. The deposit balance was 131,920 150,000 138,619,404 150,000,000 USD 305,163,807, an increase of 120% over the previous year. 100,000 100,000,000 8,260 57,211,753 50,000 50,000,000 5,971,296 0 0 2011 2012 2013 2014 Total Deposit Balance (USD) Total Number of Depositors

30 FINANCIALFINANCIAL PERFORMANCE PERFORMANCE HIGHLIGHTS HIGHLIGHTS

20062005 2006 2007 2008 DESCRIPTION DESCRIPTION 2005 2007 2008 USD USDUSD USDUSD USDUSD USD

BALANCE SHEET BALANCE SHEET Assets Assets 2,813,587 Cash and banks Cash and banks 1,198,826 2,813,5871,198,826 2,745,719 858,3402,745,719 858,340 Net loan portfolio Net loan portfolio 10,794,520 21,668,86410,794,520 32,988,09021,668,864 57,950,55832,988,090 57,950,558

Other assets Other assets 694,749 1,641,100694,749 1,284,8231,641,100 1,963,9621,284,823 1,963,962

Total Assets Total Assets 12,688,095 26,123,55112,688,095 37,018,63226,123,551 60,772,860 37,018,632 60,772,860 Liabilities Liabilities Customers' deposits Customers' deposits 382,183 240,797382,183 253,721240,797 62,453253,721 62,453 Liabilities Liabilities 3,245,222 16,000,2583,245,222 22,109,81316,000,258 41,070,58822,109,813 41,070,588

Total Liabilities Total Liabilities 3,627,405 16,241,0553,627,405 22,363,53416,241,055 41,133,04122,363,534 41,133,041 Equity Equity

Registered capital Registered capital 60,577 61,63760,577 1,350,98761,637 3,774,3201,350,987 3,774,320 Reserves Reserves - - - - - 559,392 - 559,392

Retained earnings Retained earnings 598,205 1,271,877598,205 1,898,2711,271,877 4,118,2661,898,271 4,118,266 Subordinated debts Subordinated debts 8,401,908 8,548,9828,401,908 11,405,8408,548,982 11,187,84111,405,840 11,187,841

Total Equity Total Equity 9,060,690 9,882,4969,060,690 14,655,0989,882,496 19,639,81914,655,098 19,639,819

Total liabilities and EquityTotal liabilities and Equity 12,688,095 26,123,55112,688,095 37,018,63226,123,551 60,772,860 37,018,632 60,772,860

INCOME AND EXPENSESINCOME AND EXPENSES Interest & fee income Interest & fee income 3,307,258 5,344,2123,307,258 8,937,9525,344,212 13,857,8808,937,952 13,857,880

Interest & fee expensesInterest & fee expenses (85,223) (680,948)(85,223) (1,403,886) (680,948) (2,656,849) (1,403,886) (2,656,849)

Operation expenses Operation expenses (2,286,193) (3,643,278)(2,286,193) (4,834,313)(3,643,278) (7,133,942)(4,834,313) (7,133,942) (180,660) Non-Operation ExpensesNon-Operation Expenses (188,086) (180,660) (188,086) (306,726) (323,391) (306,726) (323,391)

Income Tax Expenses Income Tax Expenses (149,551) (169,962)(149,551) (494,939)(169,962) (928,030)(494,939) (928,030)

Profit After Tax Profit After Tax 598,205 669,364598,205 1,898,088669,364 2,815,668 1,898,088 2,815,668

KEY FINANCIAL PERFORMANCEKEY FINANCIAL INDICATORS PERFORMANCE INDICATORS Return on Assets (RoA)Return on Assets (RoA) 5.5% 3.4%5.5% 6.0%3.4% 5.8%6.0% 5.8% Return on Equity (RoE)Return on Equity (RoE) 12.9% 67.2%12.9% 82.8%67.2% 48.1%82.8% 48.1%

Yield on Portfolio Yield on Portfolio 33.3% 31.4%33.3% 31.7%31.4% 29.7%31.7% 29.7%

31 Annual Report31 2014 Annual Report 2014 2009 20092010 20102011 20122011 20122013 20142013 2014 USD USDUSD USDUSD USDUSD USD USD USD

31,321,060 5,032,741 5,032,7415,808,799 5,808,7992,443,699 31,321,0602,443,699 65,408,161 111,469,11865,408,161 111,469,118 62,730,901 102,474,76862,730,901 102,474,768148,842,567 211,508,052148,842,567 211,508,052373,141,585 571,187,994373,141,585 571,187,994

3,122,671 3,122,6713,945,810 3,945,8104,700,671 8,744,5294,700,671 13,343,5058,744,529 18,917,87713,343,505 18,917,877

70,886,313 112,229,37770,886,313 112,229,377155,986,937 251,573,641155,986,937 251,573,641451,893,251 701,574,989451,893,251 701,574,989

481,254 481,254184,931 5,971,296184,931 57,211,7535,971,296 138,619,40457,211,753 305,163,807138,619,404 305,163,807 48,503,397 48,503,39786,124,724 115,315,91686,124,724 148,010,279115,315,916 148,010,279235,038,891 235,038,891282,345,788 282,345,788

48,984,651 48,984,65186,309,655 121,287,21286,309,655 205,222,032121,287,212 205,222,032373,658,295 587,509,595373,658,295 587,509,595

3,694,651 3,694,6513,800,395 3,800,3953,813,568 19,685,0673,813,568 19,685,06719,685,067 47,000,000 19,685,067 47,000,000 1,251,241 1,251,2412,202,031 2,202,0313,126,594 3,809,5293,126,594 3,809,5294,698,399 5,482,6074,698,399 5,482,607

6,004,084 6,004,0848,652,165 16,455,3848,652,165 11,428,33316,455,384 11,428,33327,422,810 29,378,47427,422,810 29,378,474

10,951,686 10,951,68611,265,131 11,265,13111,304,179 11,428,68011,304,179 11,428,68026,428,680 32,204,31326,428,680 32,204,313

21,901,662 21,901,66225,919,722 25,919,72234,699,725 46,351,60934,699,725 46,351,60978,234,956 114,065,39478,234,956 114,065,394

70,886,313 112,229,37770,886,313 112,229,377155,986,937 251,573,641155,986,937 251,573,641451,893,251 701,574,989451,893,251 701,574,989

16,464,622 16,464,62220,913,689 20,913,68932,235,005 43,408,32832,235,005 43,408,32869,129,541 109,506,51069,129,541 109,506,510

(4,521,759) (4,521,759) (5,679,964) (5,679,964)(7,960,734) (11,678,092) (7,960,734) (11,678,092)(21,689,336) (35,668,040) (21,689,336) (35,668,040)

(8,131,017) (10,157,799)(8,131,017) (10,157,799)(12,825,550) (16,568,689)(12,825,550) (16,568,689)(23,132,695) (33,042,503)(23,132,695) (33,042,503)

(702,823) (283,667) (283,667)(758,040) (758,040) (557,152) (702,823)(557,152) (3,159,154) (3,131,325)(3,159,154) (3,131,325)

(851,781) (851,781)(926,668) (2,201,409)(926,668) (2,931,343)(2,201,409) (2,931,343)(4,265,009) (7,609,837)(4,265,009) (7,609,837)

2,676,398 2,676,3983,391,218 3,391,2188,690,160 11,527,3818,690,160 11,527,38116,883,347 30,054,80516,883,347 30,054,805

4.1% 4.1%3.7% 3.7%6.5% 5.7%6.5% 5.7%4.8% 5.2%4.8% 5.2% 27.6% 27.6%26.5% 26.5%45.7% 39.5%45.7% 39.5%38.9% 45.0%38.9% 45.0%

26.4% 26.4%24.6% 24.6%25.0% 23.5%25.0% 23.5%23.0% 22.6%23.0% 22.6%

32 32 Safe and Convenient PRASAC ATM VIP Plus Chip Card PRODUCTIVITY AND EFFICIENCY

GROSS LOAN PORTFOLIO AND PORTFOLIO QUALITY (USD) As of December 2014, gross loan portfolio 2.0% 700,000,000 massively increased to USD 580,543,766 1.66% 1.8% 580,543,766 600,000,000 in 2014 from USD 379,073,429 in 2013. 1.6% 500,000,000 Portfolio at Risk 30 days over the past 10 1.4% 379,073,429 years decreased from 0.51% in 2005 to 1.2% 400,000,000 1.02% 1.0% 214,857,594 0.21% in 2014. This showed a great sign 300,000,000 151,239,681 that PRASAC had a big increase in gross 0.8% 0.51% 0.6% 104,952,771 200,000,000 loan portfolio while portfolio at risk 0.4% 33,548,580 64,088,028 0.20% 0.21% 100,000,000 decreased. 58,905,772 0.18% 0.2% 22,045,426 0.14% 11,108,415 0.24% 0.22% 0.23% 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Gross Loan Portfolio Portfolio at Risk

CREDIT OFFICER PRODUCTIVITY The number of active loan clients significantly increased to 251,112 in 2014 while 350,000 400 325,106 there were only 196,906 borrowers in 336 314,829 350 300,000 2013. The portfolio per Credit Officer 288 300 250,000 256 225,454 decreased from USD 325,106 in 2013 to 215,135 250 200,000 187 USD 314,829 in 2014; but it did not effect 162 157,350 200 150,000 150 to PRASAC's performance since PRASAC 117,809 169 178 90,672 110,104 169 had rapidly increased its Credit Officers from 100,000 141 136 100 67,417 1,166 in 2013 to 1,844 in 2014. 50,000 45,156 50 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Portfolio per Credit Officer Active Borrowers per Credit Officer

34 DESCRIPTION DESCRIPTION 2005 20052006 20062007 20072008 2008

PRODUCTIVITY ANDPRODUCTIVITY EFFICIENCY AND EFFICIENCY

Exchange rate Exchange rate 4,127 4,1274,056 4,0564,003 4,0034,081 4,081 Gross loan portfolioGross (USD) loan portfolio (USD) 11,108,415 11,108,41522,045,426 22,045,42633,548,580 33,548,58058,905,772 58,905,772 (313,895) (376,562) Loan loss reserves Loan(USD) loss reserves (USD) (313,895) (376,562) (560,490) (560,490)(955,214) (955,214) Net loan portfolio (USD)Net loan portfolio (USD) 10,794,520 10,794,52021,668,864 21,668,86432,988,090 32,988,09057,950,558 57,950,558

Number of Credit OfficersNumber of Credit Officers 246 246327 327370 370 535 535 45,156 67,417 90,672 110,104 Portfolio per Credit PortfolioOfficers (USD)per Credit Officers (USD) 45,156 67,417 90,672 110,104 Number of active borrowersNumber of active borrowers 82,545 82,54594,264 94,26494,555 94,555100,116 100,116 Active borrowers perActive Credit borrowers Officer per Credit Officer 336 336288 288256 256 187 187 Portfolio at risk Portfolio at risk 0.51% 0.51%0.24% 0.24%0.22% 0.22%0.23% 0.23%

PROFITABILITYPROFITABILITY

DESCRIPTION DESCRIPTION 2005 20052006 20062007 20072008 2008

Yield on Portfolio Yield on Portfolio 33.3% 33.3%31.4% 31.4%31.7% 31.7%29.7% 29.7% Financial Expense RatioFinancial Expense Ratio 0.8% 0.8%3.5% 3.5%4.4% 4.4% 5.4% 5.4% Operating Expense Ratio 19.6% 15.9% 14.7% Operating Expense Ratio 22.6% 22.6%19.6% 15.9% 14.7% Administrative ExpenseAdministrative Ratio Expense Ratio 7.2% 7.2%6.3% 6.3%5.5% 5.5% 5.4% 5.4% Return on Assets (RoA)Return on Assets (RoA) 5.5% 5.5%3.4% 3.4%6.0% 6.0% 5.8% 5.8%

Return on Equity (RoE)Return on Equity (RoE) 12.9% 12.9%67.2% 67.2%82.8% 82.8%48.1% 48.1%

35 Annual Report35 2014 Annual Report 2014 2009 20092010 20102011 20112012 20122013 20132014 2014

4,075 4,169 4,1694,053 4,0534,039 4,0393,995 3,9953,995 3,9954,075 580,543,766 64,088,028 64,088,028104,952,771 104,952,771151,239,681 151,239,681214,857,594 214,857,594379,073,429 379,073,429580,543,766 (1,357,127) (1,357,127) (2,478,003) (2,478,003)(2,397,114) (2,397,114)(3,349,542) (3,349,542)(5,931,844) (5,931,844)(9,355,772) (9,355,772) 62,730,901 102,474,768 211,508,052 373,141,585 62,730,901 102,474,768 148,842,567 148,842,567211,508,052 373,141,585 571,187,994 571,187,994 1,844 544 544 667 667 703 703 953 9531,166 1,1661,844 117,809 117,809157,350 157,350215,135 215,135225,454 225,454325,106 325,106314,829 314,829

87,945 87,945112,872 112,872125,127 125,127134,146 134,146196,906 196,906251,112 251,112 162 162 169 169 178 178 141 141 169 169136 136 1.66% 1.66%1.02% 1.02%0.14% 0.14%0.20% 0.20%0.18% 0.18%0.21% 0.21%

2009 20092010 20102011 20112012 20122013 20132014 2014

26.4% 26.4%24.6% 24.6%25.0% 25.0%23.5% 23.5%23.0% 23.0%22.6% 22.6% 6.9% 6.9% 6.2% 6.2% 5.9% 5.9% 5.7% 5.7%6.2% 6.2%6.2% 6.2% 5.7% 12.4% 12.4%11.1% 11.1% 9.6% 9.6% 8.1% 8.1%6.6% 6.6%5.7% 1.9% 3.6% 3.6% 3.8% 3.8% 3.0% 3.0% 2.7% 2.7%2.5% 2.5%1.9% 4.1% 4.1% 3.7% 3.7% 6.5% 6.5% 5.7% 5.7%4.8% 4.8%5.2% 5.2%

27.6% 27.6%26.5% 26.5%45.7% 45.7%39.5% 39.5%38.9% 38.9%45.0% 45.0%

36 36 YIELD ON PORTFOLIO Yield on Portfolio had been in declined trend over the past years. However, PRASAC could maintain the small down- 35.0% 33.3% 30.0% 31.4% 31.7% 29.7% ward trend during these past few years. 26.4% 24.6% 25.0% The gradual decline was mainly due to 25.0% 23.5% 23.0% 22.6% 20.0% market competition and corporate segment 15.0% penetration. 10.0% 5.0% - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

FINANCIAL EXPENSE RATIO Financial Expense Ratio trend looked stable for the past 5 years even though PRASAC had widely expanded its opera- 7.0% 6.9% 6.2% 5.9% 6.2% 6.2% tion. This shows that all expenses were 6.0% 5.4% 5.7% effectively managed and controlled. 5.0% 4.4% 4.0% 3.5% 3.0% 2.0% 1.0% 0.8% - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

OPERATING EXPENSE RATIO Operating Expense Ratio had been going 25.0% down over past years and it still went down 22.6% 22.5% further in 2014. This showed that PRASAC 20.0% 19.6% had remarkably achieved efficiency in utiliza- 17.5% tion of assets to support the growth of earning 15.9% 15.0% 14.7% assets. 12.4% 12.5% 11.1% 9.6% 10.0% 8.1% 7.5% 6.6% 5.7% 5.0% 2.5% - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

37 Annual Report 2014 ADMINISTRATIVE EXPENSE RATIO Administrative Expense decreased from 2.5% in 2013 to 1.9% in 2014. Even 8.0% though it was just a slight decrease, it was 7.2% 7.0% still a good sign for PRASAC. 6.3% 6.0% 5.5% 5.4% 5.0% 3.8% 4.0% 3.6% 3.0% 3.0% 2.7% 2.5% 1.9% 2.0% 1.0% - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

RETURN ON ASSETS (RoA) Return on Assets (RoA) increased to 5.2% in 2014 from 4.8% in 2013. It has been increased due to the fact that PRASAC 7.0% 6.5% 6.0% 6.0% 5.8% 5.7% had increased its total assets to USD 701 5.5% 5.2% 5.0% 4.8% million in 2014 from USD 452 million in 4.1% 3.7% 4.0% 3.4% 2013 and changed earning asset structure 3.0% in order to meet Microfinance Deposit 2.0% Taking License Institution (MDI) and credi- 1.0% tors’ compliance. - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

RETURN ON EQUITY (RoE) Return on Equity (RoE) significantly increased to 45.0% in 2014 from 38.9% in 82.8% 80.0% 2013. This showed that PRASAC had 70.0% 67.2% more effectiveness in equity utilization. 60.0% 48.1% 50.0% 45.7% 45.0% 39.5% 40.0% 38.9% 30.0% 27.6% 26.5% 20.0% 12.9% 10.0% - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

38 CAPACITY BUILDING

STAFF TRAINING AND DEVELOPMENT

Staff training and development is a concrete function to support our business strategies. We build staff on corporate culture, knowledge and skills in serving our customers with the best.

In 2014, PRASAC grew the business in all perspectives and became the best institution in Cambodia. To support our operation growth, we organized 68 new staff training/orientation courses, participated by 1,912 participants.

To ensure the high staff quality, internal and external trainings for existing professional staff are the key approach in human resources development.

So far, 168 refresher/training courses were conducted to all staff. While 652 professional and technical staff have been trained by external, local and international. In average, individual staff gets at least 2 courses per year.

Most of the programs in 2014 mainly focused on customer services, internal control, policy, products knowledge and risk management concept. In conclusion, capacity building and staff development play a significant role in sustaining the growth of PRASAC.

INTERNSHIPS AND VOLUNTEERS Corporate Social Responsibility was done with various activities in 2014. Among those activities, internship and volunteer program are of great opportunities for students to learn about microfinance and bank operation.

Interns are encouraged to write project paper about PRASAC operations and best practices. Also, we have volunteer program which employed up to 51 students working in our offices.

39 Annual Report 2014 MARKETING ACTIVITIES

The key function of the Marketing Department is to ensure the complete satisfaction of customers with both products and services. Products are geared towards customers’ needs through market surveys and feasibility studies to ensure the right products are targeted and tailored to the right customers. There is also a strong connection between the Marketing Department and the Product Development Department to come up with good products and banking services. The marketing department is also involved in pilot-testing products and roll-out, as well as monitoring and evaluation to ensure that product development is effective and responsive to the market.

Many promotional activities and campaigns were implemented and communicated through mass media to ensure all related information and promotional messages effectively reaching the target markets. Moreover, PRASAC also communicates to the public directly through both branches and head office levels. Sale activation also conducted at the same time with mass media with the specific target areas and people in order to penetrate market and increase sale volume.

All management levels both head office, regional, and branches often conduct visits to build good relationships with clients including loan follow up, improvement of client businesses, and provide other financial solutions. All staff especially the front-line staff are well trained with technical support in daily customer service and communications while ensuring one language communication is made and delivered to clients. At the same time, business partnership promotion which is called P.Point, has also been developed for PRASAC ATM customers to receive extra benefits such as special discount and others.

CUSTOMER SERVICE IMPROVEMENT PRASAC has improved its customer service standard, strategic complaint management and loyalty program as the following:  Developed customer service policy, guideline and procedure for implementation.  Developed customer queue management.  Customer service branch spot check and coaching.  Trained and conducted refresher trainings to concerned people on customer service excellence to Teller, Customer Service Officer, Banking Service Advisor, Credit Officer, Call Center Officer and other implementers including Branch Manager and Regional Manager.  Answered all customer inquiries, handled customer complaints via telephone and other social networks such as email, Skype, Yahoo messenger and so on. At the same time, Call Center also supported clients with other two functions offered 24/7 such as ATM card blocking and reset wrong PIN.  Handled daily complaint via call center report to management level at head office, regional and branch.  Produced customer service dashboard, gathering customer feedback from all branches via 3 different channels including direct complaint, suggestion box and call center number.  Developed Frequently Asked Questions (FAQs) to support front-line staff.  Promoted call center number 023 999 911 via PRASAC mass media.  Developed two loyalty programs by preparing gift for potential depositors in Khmer New Year and during the birthday of depositors and borrowers.  Sent wishing and greeting message to depositors, borrowers, and potential stakeholders on special holiday, birthday, Chinese New Year, Khmer New Year, and International New Year as well as promotional message via automatically SMS.

40 EVENT HIGHLIGHTS February 2014 June 2014

 Rewarded clients with surprised gifts on the occasion of  PRASAC gained the Platinum Grade after the GIIRS PRASAC reached the number of 200,000 borrowers. Rating (the Global Impact Investment Rating System). PRASAC celebrates the success to thank to its clients This rating is shown the recognition of good modeling in and offer the special reward to the 4 lucky borrowers who business application of PRASAC to respond to business ranked in between the number of 199,999 to 200,002. impacts, community, social and environmental protection, Please note that the four lucky loan users all came from employee and good governance. different provinces.  For the development of human resource in Cambodia, March 2014 PRASAC participated in Eurocham career forum on June 21-22, 2014 to give awareness to students about their  PRASAC held the Global Money Week under the theme future career and financial industry. of "Dream Comes True" to celebrate the Global Money Week under initiation of the National Bank of Cambodia. October 2014  PRASAC increased its registered capital from USD 20  Football team of PRASAC became the winner of Cambo- million to USD 47 million distributed among 5 sharehold- dian Microfinance Association Football Cup 2014 after ers: BIO, DCG, FMO, LOLC, and PSCo. which was the competition among members of Cambodia Microfi- authorized by the National Bank of Cambodia on April nance Association. PRASAC also encourages staff to 10, 2014. join different sport activities for health and team building. In addition, PRASAC supports youth to harness from  PRASAC Donated KHR 20 million to Operation Smile various sport activities to improve the learning ability and Cambodia for the surgery and treatment of rural Cambo- building greater team spirit by granting sport equipment dian children, who have disease of cleft lips, palates, and financial support to school sport club. and other deformities, in Khmer-Soviet friendship Hospi- tal. This mission held on March 30, 2014 to April 04,  In the participation of PRSAC in the National Career Fair 2014 with free surgery and treatment. on October, 21-22, 2014 at Diamond Island Convention and Exhibition Center, PRASAC gave the floor to all PRASAC joined the career fairs on March 16, 2014 at  participants, especially students, for questions and the Institute Technology of Cambodia (ITC). PRASAC answers on how to get a job with PRASAC. aimed at providing employment opportunities and financial education for Cambodian professionals and November 2014 students who are qualified and willing to be on board  2 other library buildings was handed over to other 2 with PRASAC in the contribution of economic and social schools in Prey Veng and Kampong Cham namely Snay development. Pul primary school and Prek Tanong Khnong primary school. 2 libraries allow the students and community to May 2014 build up their knowledge and change their behavior as  PRASAC cooperated with 2 more companies including well. CADCOMMS for QB and Xinwei for CooTel to ease the top up transaction. Totally, PRASAC has four partners December 2014 including Smart, Cellcard, QB and CooTel for the conven-  th ient mobile top-up service via its nationwide ATM networks. The 9 library building in 2014 was held to Royiep primary school in Kampong Speu. The students and communi-  PRASAC goes beyond financial return through paying ty there expressed the happiness and commitment to back to society, especially in the field of human resource maximize the use of this library. They deeply thank to development. PRASAC inaugurated its library building, PRASAC for giving the great support to them. locates at Serei Mongkul primary school in Prey Veng on  PRASAC hosted the 20th anniversary of the successful May 02, 2014. milestones of reaching its 20 years in business of sustainable growth and set the direction becoming the Best MFI in Cambodia.

41 Annual Report 2014 RISK MANAGEMENT AND INTERNAL CONTROL

INTERNAL CONTROL IS FUNDAMENTAL TO THE SUCCESS Internal control is fundamental to successful day-to-day operation. It assists the institution in achieving its business objectives. Weak or ineffective internal control has caused losses in many financial institutions and contributed to the failure of others.

PRASAC has established a strong internal control system to safeguard assets, public deposits, and customer service improvement, to guard against intentional or unintentional errors, and to ensure staff adherence to policies and guidelines.

PRASAC’s policies and procedures are embedded in the internal control system to prevent risks. Proper segregation of duty and dual control means that one staff member cannot process the whole transaction. Every staff member takes responsibility to follow and apply the internal control policies. At the same time, they have to communicate upward on any problems of non-compliance or policy violations.

All employees have responsibility for managing PRASAC’s risks. Executive Management, Regional Managers, Branch Managers and staff implement internal controls and manage the risk occurring during day-to-day operations.

The Board of Directors determines PRASAC’s risk policies and monitors the effectiveness of PRASAC’s risk management framework.

The Internal Audit Department is supported by the Board Audit Committee in providing independent assurance on the effectiveness of internal control systems in addition to provide consulting services to improve the internal control systems.

To build effective internal controls, PRASAC’s Internal Audit Department was established in 2001 with clear roles and responsibili- ties for the independent evaluation and improvement of the internal control system. The department complies with rules and regulations of National Bank of Cambodia (NBC) related to organization and objectives of internal audit function.

In addition, the department conducts audits in accordance with the International Standards for the Professional Practice of Internal Auditing. Currently, the department has 56 professional staff that are strongly supported by the Board Audit Committee. Each branch has an Internal Auditor who regularly reviews the quality of loan portfolios, quality of customer services, cash management, deposit and withdrawal transactions and general expenses of the branch.

In 2014, internal auditors have conducted client home visits up to 11% of total loan accounts to assess the quality of outstanding loans and to confirm that loan disbursement complies with the prescribed policies and Client Protection Principles (CPP) and Universal Standards of Social Performance Management (USSPM).

In 2014, it was evaluated that branches performed their tasks well including internal controls. The audit results and annual achievements of PRASAC showed that loan delivery complied with the policies; and loan quality were very good.

42 BALANCE SHEET

2013 2014 USD KHR’000 USD KHR’000

ASSETS

Cash on hand 21,327,744 85,204,337 32,621,225 132,931,492

Balances with the Central Bank 23,221,811 92,771,135 59,148,975 241,032,073

Balances with banks and other financial institutions 20,858,606 83,330,131 19,698,918 80,273,091

Loans and advances to customers 373,141,585 1,490,700,632 571,187,994 2,327,591,076

Other assets 7,916,560 31,626,657 11,179,052 45,554,637

Intangible assets 1,209,715 4,832,811 1,654,490 6,742,048

Property and equipment 3,713,048 14,833,626 5,459,877 22,248,998

Deferred tax assets 504,182 2,014,207 624,458 2,544,666

Total Assets 451,893,251 1,805,313,536 701,574,989 2,858,918,081

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities

Deposits from banks and microfinance institutions 9,500,606 37,954,921 16,763,602 68,311,678

Deposits from customers 129,118,798 515,829,598 288,400,205 1,175,230,835

Borrowings 235,278,314 939,936,864 281,902,091 1,148,751,021

Other liabilities 9,050,790 36,157,906 12,169,992 49,592,716

Current income tax liabilities 3,861,933 15,428,422 6,738,740 27,460,366

Severance pay obligation 1,847,855 7,382,181 2,534,965 10,329,982

Total liabilities 388,658,296 1,552,689,892 608,509,595 2,479,676,598

SHAREHOLDERS’ EQUITY

Share capital 19,685,067 78,641,843 47,000,000 191,525,000

Reserves 4,698,399 18,770,098 5,482,607 22,341,624

Subordinated debts 11,428,679 45,657,577 11,204,313 45,657,577

Retained earnings 27,422,810 109,554,126 29,378,474 119,717,282

Total shareholders’ equity 63,234,955 252,623,644 93,065,394 379,241,483

Total liabilities and shareholders’ equity 451,893,251 1,805,313,536 701,574,989 2,858,918,081

43 Annual Report 2014 INCOME STATEMENT

2013 2014 USD KHR’000 USD KHR’000

Interest income 68,115,016 272,119,489 107,575,555 438,370,387

Interest expense (20,778,382) (83,009,636) (34,609,507) (141,033,741)

Net interest income 47,336,634 189,109,853 72,966,048 297,336,646

Fee and commission expenses (912,807) (3,646,664) (1,061,976) (4,327,552)

Other operation income 728,202 2,909,167 2,109,438 8,595,960

Personnel expenses (14,296,893) (57,116,088) (21,877,355) (89,150,222)

Depreciation and amortization charges (1,314,858) (5,252,858) (1,916,739) (7,810,711)

General and administrative expenses (7,648,705) (30,556,576) (9,333,094) (38,032,358)

Operating profit 23,891,573 95,446,834 40,886,322 166,611,763

Provision for bad and doubtful loans (2,822,706) (11,276,710) (3,441,488) (14,024,064)

Grant income 79,489 317,559 219,808 895,718

Profit before income tax 21,148,356 84,487,683 37,664,642 153,483,417

Income tax expense (4,265,009) (17,038,711) (7,609,837) (31,010,086)

Profit for the year 16,883,347 67,448,972 30,054,805 122,473,331

Attributable to equity holders of the Company 16,883,347 67,448,972 30,054,805 122,473,331

44 STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Share capital Reserves Subordinated Retained Total debts earnings USD USD USD USD USD

FOR THE YEAR ENDED 31 DECEMBER 2013

Balance as at 1 January 2013 19,685,067 3,809,529 11,428,679 11,428,333 46,351,608

Profit for the year - - - 16,883,347 16,883,347

Transferred to reserves - 888,870 - (888,870) -

Balance as at 31 December 2013 19,685,067 4,698,399 11,428,679 27,422,810 63,234,955

Equivalent in KHR'000 78,641,843 18,770,098 45,657,577 109,554,126 252,623,644

FOR THE YEAR ENDED 31 DECEMBER 2014

Balance as at 1 January 2014 19,685,067 4,698,399 11,428,679 27,422,810 63,234,955

Transferred to share capital 27,314,933 - - (27,314,933) -

Profit for the year - - - 30,054,805 30,054,805

Transferred to reserves - 784,208 - (784,208) -

Currency translation difference - - (224,366) - (224,366)

Balance as at 31 December 2014 47,000,000 5,482,607 11,204,313 29,378,474 93,065,394

Equivalent in KHR’000 191,525,000 22,341,624 45,657,577 119,717,282 379,241,483

45 Annual Report 2014 CASH FLOW STATEMENT

2013 2014 USD KHR’000 USD KHR’000 CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax 21,148,356 84,487,683 37,664,642 153,483,417

Adjustments for: Depreciation 1,156,411 4,619,862 1,590,367 6,480,746 Amortization 158,447 632,996 326,372 1,329,965

Provision for bad and doubtful loans 2,822,706 11,276,710 3,441,488 14,024,064 Net interest income (47,336,634) (189,109,853) (72,966,048) (297,336,646) Gain on disposal of property & equipment (13,426) (53,637) (6,744) (27,482)

Unrealised exchange gain on subordinated debts - - (224,366) (914,291)

(22,064,140) (88,146,239) (30,174,289) (122,960,227) Changes in: Loans and advances to customers (164,456,239) (657,002,675) (201,487,897) (821,063,180)

Reserve requirement (6,478,266) (25,880,673) (13,156,308) (53,611,955) Other assets (1,705,288) (6,812,626) (935,429) (3,811,874) Deposits from banks and financial institutions 3,588,621 14,336,541 7,262,996 29,596,709 Deposits from customers 77,819,030 310,887,025 159,281,407 649,071,734

Severance pay obligation 498,474 1,991,404 687,110 2,799,973 Other liabilities 1,640,753 6,554,808 (1,171,152) (4,772,444)

Cash used in operations (111,157,055) (444,072,435) (79,693,562) (324,751,265) Interest income received 66,238,662 264,623,455 105,254,419 428,911,757

Interest expense paid (18,181,786) (72,636,235) (30,319,153) (123,550,548) Income tax paid (3,118,462) (12,458,256) (4,859,215) (19,801,301) Cash used in operating activities (66,218,641) (264,543,471) (9,617,511) (39,191,357) CASH FLOWS FROM INVESTING ACTIVITIES Statutory capital deposit - - (2,610,994) (10,639,801) Purchases of property and equipment (2,047,500) (8,179,763) (3,357,916) (13,683,508) Purchases of intangible assets (65,960) (263,510) (771,147) (3,142,424) Proceeds from sales of property and equipment 50,351 201,152 27,446 111,842

Cash used in investing activities (2,063,109) (8,242,121) (6,712,611) ( 27,353,891) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 140,483,293 561,230,756 126,081,765 513,783,192 Repayments of borrowings (44,587,027) (178,125,173) (79,457,988) (323,791,301)

Cash generated from financing activities 95,896,266 383,105,583 46,623,777 189,991,891 Net increase in cash and cash equivalents 27,614,516 110,319,991 30,293,655 123,446,643 Cash and cash equivalents at the beginning of the year 25,303,486 101,087,427 52,918,002 211,407,418 Currency translation differences - - - 4,233,442

Cash and cash equivalents at the end of the year 52,918,002 211,407,418 83,211,657 339,087,503

46 CLIENTELES AND CLIENT HIGHLIGHTS

According to the vision and mission statements, PRASAC offers banking products to their customers both rural and urban households regardless the social status and micro small and medium scale entrepreneurs with various products based on the real needs. PRASAC is also offering its banking products to other institutions such as government bodies and non-government organizations who prefer to use PRASAC for savings and deposits, money transfer, payroll and other banking services to support daily operations.

VILLAGE HOUSEHOLDS Village households constitute nearly 90% of all households located in all provinces. The majorities of clients are involved in rice production and farming and have diversified income generating activities such as trading, services, transport and consumption. The cash income determines the debt capacity of a household to get a loan.

MICRO-ENTERPRISES The large majority of micro-enterprises are family businesses where family members help in running the business. They are mainly located in or nearby market centers such as district or provincial centers with some in rural villages. They mostly have less than 10 employees, usually the majority of which are family members.

SMALL ENTERPRISES Small enterprises are mainly located in or nearby market centers, still relatively have small number of employees usually from 10 to 50 persons.

MEDIUM ENTERPRISES This type of enterprise is usually based in or nearby market centers of district or provincial towns. They hire or own the charter and usually have 51 to 100 employees.

INSTITUTIONS This category includes legal institutions from private sectors, non-government organizations, and government agencies, clubs, associations and federations.

47 Annual Report 2014 Client : Touch Pheakdey Business: Grocery Seller Address : Ta Koam Village, Voa Sa Commune, Samrong Tong District, Kampong Speu

Pheakdey, 30 years old, lives in Ta Koam Village, Voa Sa borrow USD 500 from PRASAC to expand her business. Commune, Samrong Tong District, Kampong Speu Province; Pheakdey added that then she has borrowed money from most of villagers regard her as a good business woman. PRASAC 4 times already and the latest loan was USD 2,000.

Before using PRASAC’s loan, she faced a lot of difficulties Tep Samouern, her husband, runs the bicycle and motorcy- especially during the business start-up in 2009 including (i) the cles fixing service near the stall. He mentioned that he could stall was small and roofed by palm’s leaves, (ii) lack of capital renovate grocery stall for his wife and buy more goods for sale to purchase various products to respond to customers’ needs. with the USD 2,000 loan. Beside these businesses, his wife is also a tailor. In short, he is really thankful to PRASAC for The purchase from wholesaler was expensive while she did not giving loans to improve their living condition. have enough floating capital. These made her losing customers and opportunity to earn income. Solving these difficulties, she borrowed money from her relatives to invest in her business; but such a borrowing could not help much.

Pheakdey said that firstly she was reluctant to borrow from PRASAC but with her neighbors’ advices she decided to

48 Client : Chin Ra Business: Poultry, Duck and Swine Farm Owner Address : Tuol Srama Village, Sangkat Kambol, Khan Posenchey, Phnom Penh

Chin Ra has started his business as a small-scale poultry Chin Ra is a very good borrower, he always pays the loan on raiser. With the desire to expand his business and the need for time and often he pays off the loan earlier. Chin Ra is now additional capital in 2008, he consulted his relatives about the working with 2 big wholesalers at Bek Chan in selling the source of capital for his business expansion. From his relative’s poultry. experience in using PRASAC’s loan, he was convinced to choose PRASAC as his financial partner. Presently he has 5 employees working for him in order to have a quick respond to the need his customers. According to Chin Ra said, as of 2014, he has used loan from PRASAC for the plan, he would like to continue to use PRASAC’s loan to almost 10 times. First, he borrowed only USD 1,500 and has boost the capital for swine raising. continued to borrow with a bigger amount. The latest loan amount is USD 50,000 due to his business requirement.

He added, there are many different institutions approaching him to use their services but there is no reason to make him leave PRASAC because PRASAC provides appropriated interest rate, simple documentation requirements, good customer service, professionalism, ethics and friendliness.

49 Annual Report 2014 Client : Pech Leang Business: Engine Spare Parts Seller Address : Chroy Banteay Village, Chroy Banteay Commune, Prek Prasob District, Kratie

Pech Leang is an engine spare parts seller in which supported according to the reality of business and cash flow, conveni- by other business activities such as grocery and growing ence of document process and loan application, support cassava. Most of her customers are farmers, garage owners from staff with good relationship) offered by PRASAC is very and other villagers of Chroy Banteay Village. Pech Leang suitable to her in the success of her business. mentioned that her business is very small at the start with a small grocery shop and a small cassava farm. The generated Pech Leang said that “This is the first time that I have used income is only able to support her family for a short time. PRASAC’s loan. It’s a good experience in my business’s life.” She added that she intends to expand her business further Seeing the good demand and opportunity in the market, she and will continue choosing PRASAC as her financial partner. decided to seek help in finding more capital to enlarge her business to sell more engine spare parts. After getting advice from PRASAC’s staff and relatives and her comparison with other institutions, she decided to choose PRASAC to support in financing her extra capital for the business.

She is confident that the interest rate and other conditions (including various repayment modes with great flexibility

50 Client : Kray Sokea Business: Sugarcane & Mint and Herb Farm Address : Prek Teav Village, Prek Ambel Commune, Sa Ang District, Kandal

Along street 21, there is a village in which most of villagers The reason why she chooses PRASAC because the loan running farm production such as sugarcane, mint and herb, amount was fitted to the business and the flexible repayment banana, Sapodilla, taro, mango, beans, vegetables, fruits and methods based on the cash flow. rice farm, this is known as Prek Teav Village, Prek Ambel Commune, Sa Ang District, Kandal. Nowadays Sokea has approximately 13,000 bunches of sugarcane on 3 hectares of cultivated land and another 1 Kray Sokea is a PRASAC client; and currently she produces different hectare of land for mint and herb. kinds of mint, herb and sugarcane on her cultivated land. Sokea added "I would like to thank PRASAC a lots for She said that previously her family and most villagers produce supporting me and my family in starting the business to make our living better; and now my family can generate more rice; but there was not good at all. So they have changed to income that we can build a new house as a result.” produce sugarcane, mint and herb, beans, vegetables and other crops. Although these kinds of plantation is easier to produce and sell with better income. However, she still needs more capital to purchase seeds and spends on the operation itself. So that Sokea requests loan from PRASAC.

51 Annual Report 2014 Client : Nhoem Bunthoeurn Business: Garment Enterprise’s Owner Address : Sangkat Stoeung Meanchey, Khan Meanchey, Phnom Penh

Bunthoeurn was experienced in working at Bridge Sky Compa- supply more dress up to 10,000 dozens in a month to whole- ny, specializing in garment and exporting products to abroad. salers in Phnom Penh and export to other countries including After 4 years working with the company, he got knowledge and the United States of America, Korea, Australia, Africa and experiences related to this sector. Bunthoeurn then resigned other countries. and started investing in his own business. This young entrepreneur has added that he would like to Bunthoeurn said that he firstly started the business in medium expand his business further and continue to grow with the size and met a lot of difficulties due to the lack of capital. support from PRASAC for his financial need. Bunthoeurn has visited many banks and microfinance institutions to find out an institution that can offer the best interest He also hopes that the business is not only for his family, but rate, conditions and document requirements. But those institu- also for helping Cambodians by the creation of more employ- tions could not offer him the best deal as wished. ment opportunities to contribute to the living standard improvement and overall economy development. In 2012, Bunthoeurn met PRASAC’s staff, aware of the terms and conditions of loan. Then he decided to apply for a loan to expand his business. As a result, it was very fruitful. He has three branches of operations that enable the business to

More ConvenientMore Convenient with Nationwidewith Nationwide Branch Branch and ATMand Network ATM Network BRANCH OFFICE NETWORK 176 3 82 23 Total number of New branches Total ATM New ATM branches in 2014 opened in 2014 in 2014 opened in 2014

HEAD OFFICE BAK TOUK BRANCH POCHENTONG BRANCH Building 212, St. 271, Sangkat Tuol Tumpung 2, St.169, Phum12, Sangkat Veal Vong, No. 28Eo, St. Sahakporn Russie, Phum Paprak Khan Chamkarmon, Phnom Penh Khan 7 Makara, Phnom Penh Choeung, Sangkat Kakab, Khan Posenchey, 023 220 102 023 456 7102 / 016 450 244 Phnom Penh [email protected] [email protected] 023 636 4023 / 016 200 695 [email protected] TUOL KORK BRANCH PHSAR DEPO BRANCH No.150G2, St.289, Group 13, Sangkat Boeng No.132EEo, St. 215 ,Village 6, Sangkat PHSAR HENGLY BRANCH Kak Muoy,Khan Tuol Kork, Phnom Penh Veal Vong, Khan 7 Makara, Phnom Penh St. 271, Phum 11, Sangkat Teuk La ak Bei, 023 6364 026 / 015 698 511 023 455 2326 Khan Tuol Kouk, Phnom Penh [email protected] [email protected] 023 456 7103 / 016 201 753 [email protected] PREK LEAP BRANCH CHAOM CHAO BRANCH No. 268D, National Road No.6A, Group 8, No.94, National road 4, Phum Prey Pring PREAK PNOV BRANCH Phum 3, Sangkat Chrouy Changvar, Khang Cheung, Sangkat Chaom Chao, Khan National Road No.5, Phum Kandal, Sankat Khan Ruessei Keo, Phnom Penh Por Sen Chey, Phnom Penh Prek Pnov, Khan Prek Pnov, Phnom Penh 023 456 7101 / 016 201 735 023 4567 104 / 016 690 933 016 201 731 / 023 639 0024 [email protected] [email protected] [email protected]

STEUNG MEANCHEY BRANCH MONIVONG BRANCH PHSAR DEI HUY BRANCH No. 101, St. Veng Sreng, Phum Damnak Thum No.406A, Preah Monivong Blvd, Phum 1, No.47/49, St 1019, Raong Chakr Village, Bei, Sangkat Steung Meanchey, Khan Meanchey, Sangkat Boueng Kengkang 1, Khan Chamkarmon, Sangkat Phnom Penh Thmey, Phnom Penh Phnom Penh Khan Sensok, Phnom Penh 023 640 6282 / 016 200 512 023 455 5788 / 015 532 333 023 510 5666 / 016 / 012 283 223 [email protected] [email protected] [email protected]

DANGKOA BRANCH PHSAR KANDAL BRANCH VIMEAN EKAREACH BRANCH No. A08,A09, St. 217, Phum Sambour, No.124, Norodom Blvd, Phum Buon, No.96, St.13, Phum 11, Sangkat Phsar Kandal Sangkat Dangkoa, Khan Dangkoa, Phnom Penh Sangkat Tonle Basak, Khan Chamkarmorn, Muoy, Khan Daun Penh, Phnom Penh 015 797 151 / 023 664 9111 Phnom Penh 023 456 7100 / 016 201 751 [email protected] [email protected] 017 567 763 [email protected]

PHSAR DAEUM THKOV BRANCH CHBAR AMPOV BRANCH KANDAL BRANCH No.457, St. 271, Phum 1, Sangkat Phsar Sleng National Road 1, No.575, Phum Daeum , No.234, National Road No.2, Krapeu Ha Village, Daeum Thkov, Khan Chamkarmon, Phnom Penh Sangkat Chbar Ampov, Khan Meanchey, Sangkat Prek Ruessei, Krong Ta Khmau, 023 6905 871 / 015 697 529 Phnom Penh Kandal [email protected] 023 455 2327 / 016 772 215 024 677 7773 / 015 697 408 [email protected] [email protected] 55 Annual Report 2014 ANGK SNUOL BRANCH ROKAR KAONG BRANCH KAMPONG CHAM BRANCH National Road No.4, Svay Chrum Village, Baek Rokar Kaong Viilage, Rokar Kaong Muoy National Road No.7, Group10, Phum 4, Chan Commune, Angk Snuol District, Kandal Commune, Muk Kampul District, Kandal Sangkat Veal Vong, Krong Kampong Cham, 024 690 1783 / 015 698 604 016 201 736 / 024 636 4029 Kampong Cham 042 633 3000 / 015 697 319 [email protected] [email protected] [email protected]

SAANG BRANCH LEUK DAEK BRANCH St. 21, Preaek Run Village, Preaek Koy National Road No.1, Ampil Teuk Village, PREY CHHOR BRANCH Commune, Sa Ang District, Kandal Kampong Phnom Commune, Leuk Daek Slaeng Village, Chrey Vien Commune, 024 677 7774 / 015 697 429 District, Kandal Prey Chhor District, Kampong Cham [email protected] 024 677 7779 / 015 697 138 042 648 3456 / 015 697 321 [email protected] [email protected] PREK KHLOUK BRANCH St. 110, Prek Balat Cheung Village, Trauy Sla SAMRAONG THUM BRANCH STEUNG TRANG BRANCH Commune, Sa Ang District, Kandal National Road No.1, St. 21, Steung Village, Boeng Daeng Village, Prek Kak Commune, 024 637 0007 / 016 201 611 Samraong Thum Commune, Kien Svay distric, Steung Trang District, Kampong Cham [email protected] Kandal 042 633 3222 / 015 697 304 016 201 665 [email protected] [email protected] KOH THUM BRANCH Kampong Svay Kraom Village, Preaek Thmei KANG MEAS BRANCH Commune, Koh Thum District, Kandal SAMPOV POUN BRANCH Peam Chi Kang Village, Peam Chi Kang 024 677 7772 / 015 697 461 Prek Kong Village, Sampov Pun Commune, Commune, Kang Meas District, Kampong Cham [email protected] Kaoh Thum District, Kandal 042 641 5511 / 015 697 351 024 677 7770 / 015 697 509 [email protected] [email protected] KAMPONG KONG BRANCH Kampong Kong Village, Kampong Kong THLOK CHROV BRANCH CHHEUR TEAL BRANCH Commune, Koh Thom District, Kandal Thlok Chrov Village, Khchao Commune, Chheur Teal Village, Chheur Teal Commune, 024 6 505 748 / 016 201 627 Kang Meas District, Kampong Cham Kien Svay District, Kandal 016 201 350 / 042 641 5522 016 201 669 / 023 690 0567 [email protected] KANDAL STEUNG BRANCH [email protected] Svay Ming Village, Barku Commune, Kandal Steung District, Kandal KROUCH CHHMAR BRANCH PREK AMBEL BRANCH 024 6777 778/015 697 451 Ti Pram Muoy Village, Svay Khlaing Commune, St. 21, Traeuy Troeng Village, Prek Ambel [email protected] Krouch Chhmar District, Tboung Khmum Commune, Sa Ang District, Kandal 016 201 697 / 042 666 4443 016 201 612 / 023 633 3034 [email protected] KIEN SVAY BRANCH [email protected] Kokir Village, Kokir Commune, Kien Svay District, Kandal SUONG BRANCH 024 677 7775 / 015 697 485 PREK TAKOV BRANCH Cheung Lang Village, Sangkat Suong, Leu Village, Svay Chrum Commune, [email protected] Krong Suong, Tboung Khmum Khsach Kandal District, Kandal 042 650 0006 / 015 698 030 016 690 632 / 024 655 5551 [email protected] MUK KAMPUL BRANCH [email protected] National Road No.6, Kraom Village, Preaek PONHEA KRAEK BRANCH Anhchanh Commune, Muk Kampul District, LVEA EM BRANCH Kandal Por Srok Village, Kaong Kang Commune, Teuk Khleang Village, Teuk Khleang Commune, 024 633 0025 / 015 698 615 Ponhea Kraek District, Tboung Khmum Lvea Aem District, Kandal [email protected] 042 650 0004 / 015 698 077 016 492 492 / 024 655 5554 [email protected] [email protected]

56 MEMOT BRANCH CHAMKAR LEU BRANCH KAMPONG SPEU BRANCH Memot Phsar Village, Memot Commune, Thnal Baek Kaeut Village, Svay Teab Commune, National Road No.4, Krang Pol Tep Village, Memot District, Tboung Khmum Chamkar Leu District, Kampong Cham Sangkat Roka Thum, Krong Chbar Mon, 042 662 3888 / 015 698 053 042 633 3444 / 015 697 372 Kampong Speu [email protected] [email protected] 025 633 3041 / 015 697 058 [email protected] DAMBAE BRANCH CHEUNG PREY BRANCH Sanh Chey Sen Village, Dambae Commune, Group 7, Bana Village, Soutip Commune, KONG PISEI BRANCH Dambae District, Tboung Khmum Cheung Prey District, Kampong Cham Tram Khnar Village, Snam Krapeu Commune, 042 6332 225 / 016 202 367 042 636 3664 / 015 697 336 Kong Pisei District, Kampong Speu [email protected] [email protected] 025 633 3042 / 015 697 085 [email protected] CHONG CHEACH BRANCH KAMPONG CHHNANG BRANCH Cheach Thom Village, Chong Cheach National Road No.5, Srae Pring Village, OUDONG BRANCH Sangkat Kampong Chhnang, Krong Kampong Commune, Dambae District, Tboung Khmum Bat Doeng Village, Khsem Khsan Commune, Chhnang, Kampong Chhnang 042 667 7272 / 016 202 282 Oudong District, Kampong Speu [email protected] 026 633 3040 / 015 697 924 025 639 0063 / 015 697 095 [email protected] [email protected] TRAPEANG RUESSEI BRANCH Trapeang Ruessei Village, Roka Porpram KAMPONG LEAENG BRANCH PHNOM SRUOCH BRANCH Commune, Tboung Khmum District, Tboung Khmum Kaengtasok Village, Kampong Hau Commune, Phsar Trapeang Kraloeng Village, Kiri Voan 042 644 4765 / 016 201 983 Kampong Leaeng District, Kampong Chhnang Commune, Phnum Sruoch District, Kampong Speu [email protected] 026 660 0004 / 016 201 378 025 690 0147 / 016 200 525 [email protected]

KAOH SOUTIN BRANCH KAMPONG TRALACH BRANCH Phsar Thmei Village, Peam Pra thnuoh Commune, Daeum Popel Village, Thma Edth Commune, BASETH BRANCH Kaoh Soutin District, Kampong Cham Kampong Tralach District, Kampong Chhnang Preah Mlob Village, Phearymeanchey 042 650 0007 / 015 698 129 026 636 3026 / 015 697 928 Commune, Baseth District, Kampong Speu [email protected] [email protected] 025 690 3249 / 015 697 088 [email protected]

SREY SANTOR BRANCH BARIBOUR BRANCH San Tey Village, Prek Pour Commune, Ponley Village, Ponley Commune, SAMRAONG TONG BRANCH Srey Santhor District, Kampong Cham Baribour District, Kampong Chhnang Trapeang Ampil Village, Trapeang Kong Commune, 042 631 6016 / 015 697 350 026 633 3041 / 015 697 828 Samraong Tong District, Kampong Speu [email protected] [email protected] 024 690 5667 / 016 200 346 [email protected]

OU RAING OV BRANCH TEUK PHOS BRANCH Lekh Bei Village, Ampil Ta Pok Commune, Srae Ta Chey Village, Akphivoadth Commune, THPONG BRANCH Ou Reang Ov District, Tboung Khmum Teuk Phos District, Kampong Chhnang Monourom Village, Monourom Commune, 042 650 0005 / 015 698 084 016 690 901 / 026 669 5999 Thpong District, Kampong Speu [email protected] [email protected] 025 6666 156 / 016 690 902 [email protected]

BATHEAY BRANCH PREY KRI BRANCH Ph’av Village, Ph’av Commune, Preykri Tboung Village, Prey Kri Commune, THNAL BAT BRANCH Kranhoung Village, Pour Angkrang Commune, Batheay District, Kampong Cham Chol Kiri District, Kampong Chhnang Baseth District, Kampong Speu 042 690 8235 / 015 697 345 016 201 311 / 026 652 9292 [email protected] 025 636 3914 / 016 201 458 [email protected]

57 Annual Report 2014 TRAENG TRAYUENG BRANCH RUMLONG BRANCH KAMPONG TRACH BRANCH Ti 5 Village, Traeng Trayueng Commune, Otumpor Village, Sralao Commune, Kampong Trach Ti Muoy Village, Kampong Phnom Srouch District, Kampong Speu Baray District, Kampong Thom Trach Khang Kaeut Commune, Kampong 025 635 5058 / 016 201 475 062 661 1188 / 016 200 357 Trach District, Kampot [email protected] [email protected] 033 639 9075 / 015 697 561 [email protected]

KRAING CHEK BRANCH SANDAN BRANCH Kraing Chongruk Village, Kraing Chek Commune, Teuk Mneang Village, Sandan Commune, ANGKOR CHEY BRANCH Oudong District, Kampong Speu Sandan District, Kampong Thom Pou Village, Phnum Kong Commune, 025 668 9111 / 016 200 739 062 646 9595 / 016 200 946 Angkor Chey District, Kampot [email protected] [email protected] 033 636 3076 / 015 697 803 [email protected]

PONHEALEU BRANCH PRASAT SAMBOUR BRANCH National Road No.5, Oudong Village, Veang Kampong Chheuteal Village, Sambour Commune, BANTEAY MEANCHEY BRANCH Chas Commune, Oudong District, Kampong Speu Prasat Sambour District, Kampong Thom National Road No.5, Kourothan Village, Sangkat 024 639 0024 / 015 698 606 097 622 2600 / 016 201 031 Ou Ambel, Krong Serei Saophoan, [email protected] [email protected] Banteay Meanchey 054 696 6668 / 015 698 130 KAMPONG THOM BRANCH [email protected] KAMPOT BRANCH National Road No.6A, Achar Leak Village, No.21, National Road No.3, Kampong Bay Sangkat Achar Leak, Krong Stueng Saen, Khang Tboung Village, Sangkat Kampong Bay, POI PET BRANCH Kampong Thom Krong Kampot, Kampot Kilou Lekh Buon Village, Sangkat Poi Pet, 062 6511 511 / 015 698 591 033 639 9072 / 015 697 587 Krong Poi Pet, Banteay Meanchey [email protected] [email protected] 054 630 0089 / 015 698 170 [email protected] STOUNG BRANCH Leap Tong Village, Kampong Chen Tboung BANTEAY MEAS BRANCH OU CHROV BRANCH Commune, Stoung District, Kampong Thom Prey Krala Khang Lech Village, Tuk Meas Lech Yeang Thmei Village, Kob Commune, 062 699 9909 /016 201 521 Commune, Banteay Meas District, Kampot Ou Chrov District, Banteay Meanchey [email protected] 033 639 9071 / 015 697 802 [email protected] 016 200 783 / 054 636 3242 [email protected] KAMPONG THMAR BRANCH Prey Ta Trav Village, Ballang Commune, CHHUK BRANCH Baray District, Kampong Thom Sat Pong Village, Sat Pong Commune, PREAHNET PREAH BRANCH 062 690 0789 / 015 698 924 Chhuk District, Kampot Chob Village, Chob Vari Commune, [email protected] 033 639 9073 / 015 697 895 Preahnet Preah District, Banteay Meanchey [email protected] 054 633 3088 / 015 698 134 [email protected] KRAVAR BRANCH Slakaet Village, Kravar Commune, CHUMKIRI BRANCH Baray District, Kampong Thom Trapaingveng Village, Trapaingraing Commune, THMAR PUOK BRANCH 062 637 5855 / 016 201 530 Chumkiri District, Kampot Kasen Village, Thmar Puok Commune, [email protected] 016 201 290 Thmar Puok District, Banteay Meanchey [email protected] 054 630 0090 / 015 698 662 [email protected] SANTUK BRANCH 7 Makra Village, Taing Krasaing Commune, Santuk District, Kampong Thom 062 672 1777 / 015 201 537 [email protected]

58 SVAY CHEK BRANCH PHNOM PROEK BRANCH ANDONG TEUK BRANCH Rolous Village, Rolous Commune, Phnom Touch Village, Pech Chenda Commune, Andong Teuk Village, Andong Teuk Commune, Svay Chek District, Banteay Meanchey Phnom Proek District, Battambang Botom Sakor District, Koh Kong 054 690 2866 / 016 200 845 053 666 8844 / 015 698 094 035 694 7070 / 016 201 708 [email protected] [email protected] MONGKOL BOREI BRANCH Chamkar Tadok Village, Russei Kraok BANAN BRANCH KRATIE BRANCH Commune, Mongkul Borei District, Boeng Chaeng Village, Snoeng Commune, St. Preah Soramarith, Voat Village, Sangkat Banteay Meanchey Banan District, Battambang Kratie, Krong Kratie, Kratie 053 666 8833 / 015 698 641 054 677 7377 / 016 200 570 072 636 4067 / 015 698 664 [email protected] [email protected] [email protected]

SAMLOUT BRANCH SAMBOUR BRANCH MALAI BRANCH Ou Sngout Village, Ta Sanh Commune, Thmei Village, Malai Commune, Kaeng Prasat Village, Sambour Commune, Samlout District, Battambang Malai District, Banteay Meanchey Sambour District, Kratie 053 6660 033 / 016 201 140 054 653 5168 / 016 200 636 072 695 5500 / 016 201 686 [email protected] [email protected] [email protected]

THMAR KOUL BRANCH PHNOM SROK BRANCH Kak sekam Village, Ta Poung Commune, CHHLOUNG BRANCH Srah Chik Village, Srah Chik Commune, Thmar Koul District, Battambang Chrouy Thma Kraom Village, Chhloung Commune, Phnom Srok District, Banteay Meanchey 053 631 1707 / 016 201 070 Chhloung District, Kratie 054 646 0066 / 016 200 794 [email protected] 072 636 8168 / 015 698 690 [email protected] [email protected] SAMPOV LOUN BRANCH BATTAMBANG BRANCH Trapeang Bralit Village, Santepheap Commune, PREK PRASOB BRANCH National Road No.5, Rumchek Pram village, Sampov Loun District, Battambang Prek Prasob Kandal Village, Prek Prasob Sangkat Rotanak, Krong Battambang, 053 666 8822 / 016 201 094 Commune, Prek Prasob District, Kratie Battambang [email protected] 072 658 6555 / 015 698 657 053 698 5985 / 015 698 488 [email protected] [email protected] KAMREANG BRANCH Ou Da Leu Village, Boeng Raing Commune, SNOUL BRANCH MOUNG RUESSEI BRANCH Kamreang District, Battambang Kbal Snoul Village, Snoul Commune, Pou Pir Village, Kear Commune, Snoul District, Kratie 012 990 118 / 053 630 7152 / 016 201 228 Moung Ruessei District, Battambang [email protected] 072 666 6103 / 015 690 904 053 666 9669 / 015 698 857 [email protected] [email protected] KOH KONG BRANCH St.48, Phum Ti Muoy, Sangkat Smach Mean Chey, MONDULKIRI BRANCH KOAS KRALA BRANCH Krong Khemarak Phoumin, Koh Kong Kandal Village, Sangkat Spean Mean Chey, Toul Balang Village, Koas Krala Commune, 035 633 3095 / 015 698 771 Krong Saen Monourom, Mondul Kiri Koas Krala District, Battambang [email protected] 073 636 8099 / 015 698 087 053 650 0332 / 016 201 866 [email protected] [email protected] SRAE AMBEL BRANCH KEO SEIMA BRANCH Trapeang Village, Srae Ambel Commune, BAVEL BRANCH Ou Am Village, Srae Khtum Commune, Srae Ambel District, Koh Kong Dach Prat Village, Bavel Commune, Keo Seima District, Mondulkiri 035 633 3096 / 015 698 794 Bavel District, Battambang 073 666 6110 / 015 222 044 / 096 616 5698 [email protected] 053 636 4087 / 015 698 643 [email protected] [email protected]

59 Annual Report 2014 ODDAR MEANCHEY BRANCH PREY VENG BRANCH KAMPONG TRABAEK BRANCH Doun Kaen Village, Sangkat Samraong, National Road No.11, Phum Lek Buon, Kampong Trabaek Village, Kampong Trabaek Krong Samraong, Oddar Meanchey Sangkat Kampong Leav, Krong Prey Veng, Commune, Kampong Trabaek District, Prey Veng 065 633 3339 / 015 698 964 Prey Veng 043 666 6192 / 016 201 826 [email protected] 043 633 6051 / 015 697 115 [email protected] [email protected]

ANLONG VEAENG BRANCH PREAH SDACH BRANCH Ou Chenhchien Village, Anlong Veaeng Commune, SITHOR KANDAL BRANCH Prey Meas Village, Angkor Reach Anlong Veaeng District, Oddar Meanchey Prek Sandaek Village, Prek Chang Kran Commune, Preah Sdach District, Prey Veng 065 637 7779 / 015 698 863 Commune, Sithor Kandal District, Prey Veng 043 666 6936 / 015 697 128 [email protected] 043 663 6677 / 098 933 359 [email protected] [email protected]

TRAPEANG PRASAT BRANCH TAHUY BRANCH PEAM RO BRANCH Trapeang Prasat Village, Trapeang Prasat Tahuy Village, Kampong Prasat Commune, Prek Raing Village, Banlich Prasat Commune, Commune, Trapeang Prasat District, Peam Chor district, Prey Veng Peam Ro District, Prey Veng Oddor Meanchey 043 666 6871 / 016 201 835 043 635 2052 / 015 697 149 065 6666 609 / 016 201 956 [email protected] [email protected] PEARAING BRANCH Snay Poal Village, Roka Commune, PEAM CHOR BRANCH BANTEAY AMPIL BRANCH Pearaing District, Prey Veng Bang’aek Village, Svay Phluoh Commune, Kouk Morn Village, Kouk Morn Commune, 043 666 6053 / 015 698 622 Peam Chor District, Prey Veng Banteay Ampil District, Oddor Meanchey [email protected] 043 666 6115 / 016 201 803 012 725 635 [email protected] MESANG BRANCH KAMCHAY MEAR BRANCH Vaing Village, Chi Phoch Commune, PAILIN BRANCH Chour Ti Muoy Village, Kranhung Commune, Mesang District, Prey Veng Bar Din Niev Village, Sangkat Pailin, Kamchay Mear District, Prey Veng 043 666 6542 / 015 640 140 / 016 200 612 Krong Pailin, Pailin 043 655 6000 / 015 697 167 [email protected] 055 623 4567 / 015 698 623 [email protected] [email protected] SVAY ANTOR BRANCH KANCHRIECH BRANCH Svay Antor Pir Village, Svay Antor Commune, RATTANAKIRI BRANCH Pra Ngeuy Pir Village, Thmar Poun Commune, Prey Veng District, Prey Veng St.78, 7 Makara Village, Sangkat Labansiek, Kanhchriech District, Prey Veng 043 666 6149 / 016 202 337 Krong BanLung, Rattanakiri 043 666 6272 / 016 201 805 [email protected] 075 636 4098 / 015 698 660 [email protected] [email protected] KAMPONG POPIL BRANCH BAPHNOM BRANCH Kapong Popil Village, Kampong Popil BAR KEO BRANCH Chheu Kach Village, Chheu Kach Commune, Commune, Pearaing District, Prey Veng Ti Muoy Village, Laming Commune, Baphnom District, Prey Veng 043 666 6053 / 016 201 570 Bar Keo District, Ratanakiri 043 666 6221 / 015 697 189 [email protected] 075 699 3666 / 087 550 416 [email protected] [email protected] SVAY RIENG BRANCH KOR ANDOEUK BRANCH National Road No.1, Kien Sang Village, STEUNG TRAENG BRANCH Porn Vaut Village, Prasat Commune, Sangkat Svay Rieng, Krong Svay Rieng, Thma Leak Village, Sangkat Srah Ruessei, Kampong Trabaek District, Prey Veng Svay Rieng Krong Steung Traeng, Steung Traeng 043 654 0540 / 015 697 173 044 645 0333 / 015 697 262 074 636 4097 / 015 698 653 [email protected] [email protected] [email protected]

60 SVAY TEAB BRANCH KRONG BAVET BRANCH KAOH ANDAET BRANCH Prasoutr Ti Pir Village, Kandieng Reay Bavet Leu Village, Sangkat Bavet, Chambak Aem Village, Romenh Commune, Commune, Svay Teab District, Svay Rieng Krong Bavet, Svay Rieng Kaoh Andaet District, Takeo 044 651 3555 / 016 202 154 044 651 3666 / 016 202 243 032 633 3139 / 015 697 898 [email protected] [email protected] [email protected]

RUMDUOL BRANCH TAKEO BRANCH SAMRAONG BRANCH Chak Village, Kampong Chak Commune, No.172, National Road No. 2 and St. 21, Prey Toteung Village, Samraong Commune, Rumduol District, Svay Rieng Thnal Baek Village, Sangkat Roka Krau, Krong Samraong District, Takeo 044 651 3999 / 016 202 157 Doun Keo, Takeo 032 654 3555 / 016 690 903 [email protected] 032 666 6031 / 015 697 862 [email protected],kh [email protected] CHANTREA BRANCH ANGKOR BOREI BRANCH Toul Ampil Village, Sangkat Chrak Mtes PREY KABBAS BRANCH Kampong Loung Village, Angkor Borei Commune, Krong Bavet, Svay Rieng Prey Lvea keut Village, Prey Lvea Commune, Angkor Borei District, Takeo 044 690 1327 / 015 697 212 Prey Kabbas District, Takeo 032 634 4400 / 016 200 750 [email protected] 032 666 6036 / 015 697 941 [email protected] [email protected] KAMPONG ROU BRANCH ANG TA SAOM Svay A Nat Village, Nhor Commune, TRAING BRANCH Prey Romdeng Village, Ang Ta Saom Commune, Kampong Rou District, Svay Rieng Kampong Chrey Village, Smaong Commune, Tram Kak District, Takeo province 044 651 3444 / 016 202 241 Traing District, Takeo 032 666 6038 / 015 698 862 [email protected] 032 666 6033 / 015 697 932 [email protected] [email protected] ROMEAS HAEK BRANCH Kampong Trach Village, Kampong Trach PREAH SIHANOUK BRANCH KIRIVONG BRANCH Commune, Romeas Haek District, St. Ekreach, Phum Muoy, Sangkat 2, Kampong Village, Preah Bat Choan Chum Svay Rieng Krong Preah Sihanouk, Preah Sihanouk Commune, Kirivong District, Takeo 044 690 1996 / 015 697 214 032 666 6035 / 015 697 899 034 636 6658 / 015 698 971 [email protected] [email protected] [email protected]

CHANTREI BRANCH STEUNG HAV BRANCH Chantrei Village, Chantrei Commune, PHSAR KIRI BRANCH Dei Kraham Village, Prey Romdeng Commune, Pir Village, Ou Treh Commune, Romeas Haek District, Svay Rieng Kirivong District, Takeo Steung Hav District, Preah Sihanouk 044 651 3222 / 016 201 779 032 639 9935 / 016 201 859 012 802 414 / 098 595 006 [email protected] [email protected] [email protected]

SVAY CHRUM BRANCH BATI BRANCH PREY NOP BRANCH Thlok Village, Kraol Kou Commune, Smoa Khnhei Village, Trapeang Sab Commune, Natioal Road No.4, Boeng Veng Village, Sangkat Svay Chrum District, Svay Rieng Bati District, Takeo Veal Renh, Prey Nop District, Preah Sihanouk 044 651 3888 / 015 697 193 032 666 6037 / 015 697 848 034 639 9074 / 015 697 819 [email protected] [email protected] [email protected]

TASUOS BRANCH TRAMKAK BRANCH PURSAT BRANCH Ta Por Village, Ta Suos Commune, Trapaing Rompeak Village, Tramkak Commune, Svay Chrum District, Svay Rieng National Road No.5, Thnal Bambaek Village, Tramkak District, Takeo 044 651 3777 / 016 202 215 Sangkat Roleab, Krong Pursat, Pursat 088 558 8007 052 633 3111 / 015 698 809 [email protected] [email protected] [email protected]

61 Annual Report 2014 KANDEANG BRANCH KRALANH BRANCH PREAH VIHEAR BRANCH Boeung Kranh Village, Svay Luong Commune, Kampong Thkov Muoy Village, Kampong Andoung Pou Village, Sangkat Kampong Pranak, Kandeang District, Pursat Thkov Commune, Kralanh District, Siem Reap Krong Preah Vihear, Preah Vihear 016 201 875 063 638 3777 / 015 698 994 064 630 5987 / 015 698 864 [email protected] [email protected] KRAKOR BRANCH Phsar Village, Anlong Tnaot Commune, PUOK BRANCH KULEAEN BRANCH Krakor District, Pursat Kouk Thmei Village, Puok Commune, Kuleaen Tbong Village, Kuleaen Tbong Commune, 052 666 6389 / 015 698 838 Puok District, Siem Reap Kuleaen District, Preah Vihear [email protected] 063 691 1911 / 015 698 945 016 201 765 [email protected] [email protected] CHHEU TOM BRANCH Kapas Village, Chher Tom Commune, Krakor District, Pursat ANGKOR CHUM BRANCH CHEY SEN BRANCH 016 201 889 Doun Sva Village, CharChhuk Commune, Sa Ang Village, Sa Ang Commune, Angkor Chum District, Siem Reap Chey Sen District, Preah Vihear BAKAN BRANCH 016 644 411 / 092 979 079 097 707 1758 / 092 91 57 47 Khnach Romeas Village, Boeng Khnar [email protected] [email protected] Commune, Bakan District, Pursat 052 630 0083 / 015 698 834 SOUTR NIKOM BRANCH SRA AEM BRANCH [email protected] Dam Daek Thmei Village, Dam Daek Commune, Sra Aem Cheung Village, Sra Aem Commune, Soutr Nikom District, Siem Reap Choam khsan District, Preah Vihear KRAVANH BRANCH 063 6664 999 / 015 698 957 096 2255 995 Krouch Chhmar Village, Leach Commune, [email protected] [email protected] Phnum Kravanh District, Pursat 052 633 3080 / 015 698 830 CHI KRAENG BRANCH [email protected] Kampong Kdei Pir Village, Kampong Kdei Commune, Chi Kraeng District, Siem Reap TALOU BRANCH 063 666 4888 / 016 201 958 Talou Village, Talou Commune, [email protected] Bakan District, Pursat

052 633 3629 / 016 201 904 SREY SNAM BRANCH [email protected] Chrouy Neang Nguon Village, Chroy Neang Nguon Commune, Srey Snam District, Siem Reap OUTAPAONG BRANCH 063 690 9797 / 016 201 961 Outapaong Village, Outapaong Commune, [email protected] Bakan District Pursat 092 260 029 / 016 201 895 [email protected] SVAY DANGKUM BRANCH Group3, Vihear Chen Village, Sangkat Svay Dangkum, Krong Siem Reap, Siem Reap SIEM REAP BRANCH 063 675 2200 / 016 201 651 Banteay Chas Village, Sangkat Slor Kram, [email protected] Krong Siem Reap, Siem Reap 063 675 3300 / 015 698 939 [email protected]

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