ABOUT PRASAC 2 Vision and Mission______3 Background______4 Our Challenges______6 Business Objectives______7 Clients and Client Highlights______8 Financial Products and Eligible Criteria______11

OWNERSHIP AND GOVERNANCE 12 Organizational Structure______13 Shareholders______14 Board Committee______15 Board of Directors______16 Management______18

Operational HIGHLIGHTS 22 Remark From Chairman______23 Remark From General Manager______25 Financial Performance Highlights______28 Operational Highlights______30 Staffing and Capacity Building______32 Internal Control and Risk Management______34 Marketing and Social Activities______36

Audited Financial Statements 40 Report of the Board of Directors______41 Report of the Independent Auditors______46 Balance Sheet______47 Income Statement______48 Statement of Changes In Equity______48 Statement of Cash Flows______49

Contact US 50 Office Network with Contact Address______51 Outreach Highlights with Operational Map______62

1 ABOUT PRASAC

VISION AND MISSION 3

FINANCIAL PRODUCTS BACKGROUND AND ELIGIBLE CRITERIA 4 11

OUR CLIENTS CHALLENGES AND CLIENT HIGHLIGHTS 6 8

BUSINESS OBJECTIVES 7

2 VISION

To improve the living standards of the rural people contributing to sustainable economic development by being a financially viable microfinance institution.

MISSION To provide sustainable access to financial services for rural communities and micro-enterprises.

3 BACKGROUND

PRASAC was a former credit component of PRASAC’s project funded by the European Union and implemented by three ministries of the Royal Government of Cambodia.

The project started in 1995 to rehabilitate and support agricultural sector in six provinces around Phnom Penh i.e. Kompong Cham, Kompong Chhnang, Kompong Speu, Takeo, Prey Veng, and Svay Rieng. PRASAC’s project phased out in December 2003.

To ensure the access to financial services to rural communities and micro-enterprises,PRASAC’s Project Steering Committee made a strategic decision to transform its credit component into a licensed MFI. In March 2002, the transformation was started by creating PRASAC Credit Association as credit operator registered with the National Bank of Cambodia (NBC).

In 2003, a trust fund called Cambodia Rural Development Foundation (CRDF) and PRASAC Staff Company were established to facilitate the transformation. With two initial shareholders, PRASAC was established by registering with the Ministry of Commerce as a private limited liability company in August 2004 and got its license from the NBC in November 2004 to legally provision financial services to rural communities and micro-enterprises.

To finalize its transformation, PRASAC started to identify and negotiate with investors since 2005 in order to replace the temporary shareholders i.e. CRDF. In 2007, PRASAC completed its transformation by replacing CRDF with new five shareholders such as BIO (Belgian Investment Company for Developing Countries), DGC (Dragon Capital Group Limited), FMO (The Netherlands Development Finance Company), LOLC (Lanka ORIX LEASING Company Ltd), and Oikocredit. Particularly, PRASAC received a permanent license from NBC in December 2007.

4 MILESTONE

1995 - 1999: PRASAC I, three EU funded rural 2005: The credit fund was transferred from EC to development projects in six provinces, with three the government and finally to PRASAC MFI Ltd as different credit components. Subordinated Debt.

2000 - 2003: Extension as PRASAC II, combined to 2006: The commercialization process was to seek for one project, one credit component. equity investment participation from commercial and social investors. 2000: First strategic decision to create a sustainable institution beyond the closure of PRASAC II 2007: PRASAC completed its transformation by project. replacing CRDF with new five shareholders, BIO, DGC, FMO, LOLC, and Oikocredit. And, PRASAC 2001: HO and branch offices separated from received a permanent license from NBC in December PRASAC II, with separate management but still as a 2007. part of the project. 2008: PRASAC increased its capital to 15 billion 2002: Creation of PCA (PRASAC Credit Association), riels from six shareholders. PRASAC was extending registered with the NBC in March 2002 as Rural its financial services throughout the country. Credit Operator. 2009: PRASAC selected Oracle FLEXCUBE 2003: Two initial shareholders were created, a Trust Universal Banking to modernize its MIS to build Fund called CRDF created by PRASAC II and competitive advantages, offer more diversified ranges PRASAC Staff Company created by staff members. of products and prepare for the next level.

2004: Registered as PRASAC MFI Ltd with Ministry of Commerce as a private limited liability company and received license from NBC.

5 OUR CHALLENGES

1. To continue serving the rural poor under high professional and moral standards implementing transparency and good governance on all operational levels

2. To enforce credit discipline among staffs and clients by strengthening internal control system

3. To diversify loan portfolio and review financial products and services to be competitive and suit clients’ demands, and to look for external funding to safeguard funds and plan expansion

6 BUSINESS OBJECTIVES

The business objectives of the Company are to carry out activities of microfinance by providing financial services to rural households and small and medium enterprises, such as:

1. Credit services in the form of group and individual loans

2. Savings and money transfer services

3. To raise funds or borrow money in such manner as the company shall think fit and to secure the repayment of any money borrowed, raised or owed to creditors

4. Do all such other things as incidental or which the Company may think fit and conducive to the attainment of the above objectives.

The objectives shall be achieved by strict adherence of high professional and moral standards, transparency, and good governance.

7 CLIENTS AND CLIENT HIGHLIGHTS

a. PRASAC’s Client:

Rural Community Clients are the rural village households that have repayment capacity residing in rural areas outside the urban areas of all provincial towns.

Microenterprise Clients are microenterprises that have number of employees less than 11 and or assets less than USD50,000.

8 b. Client Highlight: Sorn Sokha, 38, Cake Baker, Pursat

MRS. DAM TOCH, 35, Raising Pig, Kampong Mrs. Sokha, 38 years old, a cake baker Speu living in Bambekleach village, Roleab commune, Sampov Meas district, Pursat province, MRS. DAM TOCH, 35 years old, is PRASAC’s described her business story that she’s been client who is successfulin her business with baking egg-powder cake for four years. Previously, PRASAC’s loan. Presently, she is living in Sdok her business was not running well due to the Slart village, Phnom Touch commune,Udong shortage of capital. Later , after discussing with district, Kampong Speu province. She spends her husband, in 2008 she decided to request for most of her daily time on raising pigs USD 5,000 loan for 24 months from PRASAC and doing housework. She and her husband, to buy more equipment and materials for MR. SENG THAN, a wine producer, wanted baking the cake. After seeing that her business to raise more pigs to extend their business. getting better with PRASAC’s loan, recently, she After getting advice from their sister, they was able to pay-off and request for USD 4,800 decided to request for USD 2,000 loan for 21 loan from PRASAC for the second time to buy months from PRASAC to support their limited an electronic oven so that she can increase her capital. After selling some pigs, Mrs. Dam Toch productivities to respond to her clients’ needs. had got better living standards and was able Mrs. Sokha said that, “I am very happy to repair her house and buy more furniture. that my business goes well. I also would like to Mrs. Dam Touch becomes our potential thank to PRASAC that provided me financial client; she repays regularly and will pay-off soon. resource to extend my business. Moreover, what She said with smiling face and hope that, “I’m I like the most is that PRASAC staffs are friendly really thankful to PRASAC that always provides and polite, and the loan assessment is also easy me both financial supports and motivation and and fast; that is the reason why I can trust in advice to do business so that I can get more PRASAC.” incomes.”

9 Mr. Lun Chhun Hort, 39, Brick Maker, Kratie

Mr. Lun Chhun Hort, 39, living in Russey Jar village, Thmoh Kreih commune, Chet Borey district, Kratie province, is another successful client of PRASAC. His main business is producing brick. Previously, he used to borrow money from other money lenders and institution, but since it was too difficult with their lending process and high interest rates, he decided to choose PRASAC as his business partner with financial support. He requested for USD8,000 loan from PRASAC for the first time in 2008 for 24 months by repaying every month. After seeing fast growth of his business, Mr. Hort made up his mind to pay off the first loan and requested for USD10,000 loan for second time to construct a new brick kiln so that he could increase his productivities to respond to his customers’ needs and increase more incomes. Nowadays, Mr. Hort’s business is growing bigger. He also bought a new truck for transporting his products, and his living standard also get improved. He said that, “PRASAC is a good business partner in which I can trust. PRASAC provides both good service and capital for doing business with low interest rate. In the future, I plan to borrow more money from PRASAC to extend my business.”

10 FINANCIAL PRODUCTS AND ELIGIBLE CRITERIA

a. Financial Products b. Eligible Criteria

Group Loan: Group Loan: Group loan is used in which the group members - Group member: 2-5 members, and one is are self-selected between 2 to 5 members with selected as a group leader one group leader. Each member can borrow - One member from each amount of money ranging from household KHR 50,000 to KHR 1,000,000 - Permanent residents in the or village USD 15 to USD 250 - Similar loan purposes within 12 months loan period. (not homogeneous) - Age between 18 – 65 years

Individual Loan: Individual Loan: The target clienteles are micro andsmall​ - Permanent resident enterprises. The clients can borrow either in in the village Riel or Dollar with the amount ranging from - Aged between 18 – 65 years KHR 300,000 to KHR 100,000,000 - Have/show profitable business or - Contribute 20% of their own capital into USD 75 to USD 25,000 the business activity with the period up to 26 months. The monthly - Have physical collateral and interest rate is 2.7% to 1.6%. personal guarantee

11 OWNERSHIP AND GOVERNANCE

ORGANIZATIONAL STRUCTURE 13

MANAGEMENT SHAREHOLDERS 18 14

BOARD OF BOARD DIRECTORS COMMITTEE 16 15

12 ORGANIZATIONAL STRUCTURE

13 SHAREHOLDERS

The share capital of the Company as at December SHAREHOLDERS % SHAREHOLDING 2009 was KHR 15 Billion (Fifteen billion Khmer BIO 18% Riel) distributed among the five shareholders 18% DCG 18% each BIO, Dragon Capital Group (DCG), The FMO 18% Netherlands Development Finance Company (FMO), LOLC 18% Lanka Orix Leasing Company (LOLC), Oikocredit, Oikocredit 18% and 10% for PRASAC Staff Company (PS Co.). PSCo 10%

BIO is a member of EDFI, the Association of European Development Finance Institutions. BIO participates in European Financing Partners / EFP, a co-financing facility established by ten of the EDFI-members. Its purpose is to facilitate the financing of private sector projects in the ACP states in collaboration with the European Investment Bank.

Dragon Capital Group (DCG) is a diversified investment banking institution offering traditional financial products and services with an exclusive focus on Vietnamese capital markets. The firm is known both within Vietnam and international financial circles as one of the premier Vietnam focused financial institutions. Dragon Capital Group serves the investment banking needs of international and domestic businesses to enable them to realize their investment goals in Vietnam.

The Netherlands Development Finance Company (FMO) supports the private sector in developing countries and emerging markets in Asia, Africa, Latin America and Central and Eastern Europe. We do this with loans, participations, guarantees and other investment promotion activities. Lanka Orix Leasing Company strives to deliver financial services to its customers with both corporate and rural grass roots level, in every region where it operates in Sri Lanka. Since its inception in 1980, it has been working with small and medium size entrepreneurs, which represents over 80% of its client portfolio. The Company innovates continuously in providing adapted financial solutions such as leasing products, factoring services, savings and deposit products, small loans and insurance broking services.

Lanka Orix Leasing Company strives to deliver financial services to its customers with both corporate and rural grass roots level, in every region where it operates in Sri Lanka. Since its inception in 1980, it has been working with small and medium size entrepreneurs, which represents over 80% of its client portfolio. The Company innovates continuously in providing adapted financial solutions such as leasing products, factoring services, savings and deposit products, small loans and insurance broking services.

Oikocredit started as a pioneer in the field of development financing. Today, it is one of the largest financiers of the microfinance sector worldwide. Oikocredit is one of the few ethical investment funds, which finances development projects in the South benefiting disadvantaged and marginalized people. Privately owned, Oikocredit is a unique cooperative society, which encourages investors to invest their funds in a socially responsible manner.

PRASAC Staff Company (PSCo.) was established under the law and general provisions of Kingdom of Cambodia and has the following objectives: To make equity investments in PRASAC MFI Ltd and to manage the investments in accordance to high moral and professional standards, with transparency and good governance. The company might be engaged in any other capital and asset management, investment and trading and other 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. 14 BOARD COMMITTEE

Board of Director Committee: With full capacity of the Board of Directors, the two initial committees were created in order to support the management in operations.

Audit Committee: The audit committee comprises of two Board of Directors, i.e. Mr. Michael Temple and Mr. Ranjit Fernando and Internal Audit Department Manager. The duties of the audit committee are to review the report of the internal and external audit reports, monitor the integrity of the financial statements, compliance of the policies and procedures, review the internal control system and risk management of PRASAC, and provide recommendations for implementation. In addition, the non-executive members will meet the external auditors twice a year i.e. in September before the external audit starts and in March after the completion of the external audit assignment. The committee will meet at every three months.

HR and Remuneration Committee: The key role of this committee is to evaluate the performance of the top management and determine remuneration for the top management. The committee is composed of Mr. Stefan Harpe and Ms. Anne Demeuse.

15 BOARD OF DIRECTORS

MR. MichAel TEMPLE, Director, Chairman of the Board, Representative of DCG

MichaEl was educated in both Hong Kong and Scotland and joined the HSBC Group as an International Manager in 1977. He worked for HSBC in a number of areas primarily in the corporate banking and risk management in Germany, Brunei, Hong Kong, India, Indonesia, Bahrain and Vietnam. His last role in the HSBC Group was Chief Operating Officer in Vietnam where he worked for 6 years. He was also the project leader in evaluating the potential of Vietnam as a site for an HSBC Data Processing and Call Center site. He’s retired from the HSBC Group in 2005 and became a Director of Dragon Capital, a UK based Investment Bank and Fund Management Company whose main focus of business is in Vietnam. He is the Group COO and is part of the committee that evaluates the Groups private investments. PRASAC is the Dragon Capital Groups’ first investment in Cambodia.

MR. STEFAN HARPE, DIRECTOR, Member of the Board, Representative of Oikocredit

STEFAN is Manager Equity Investments, Oikocredit, Amersfoort, Netherlands; working with Oikocredit’s local managers in 28 country offices in Africa, Latin America, Asia and Eastern Europe to manage the private equity investment portfolio__i) financial (mostly microfinance);__ii) non-financial (businesses with high development impact);__iii) specialized equity funds. Oikocredit is a global development finance institution with about € 340 million total assets, funded by individuals (26,000 shareholders), churches, and institutional investors. While not profit-maximizing, and balancing dual objectives of development impact and investment return, Oikocredit is sustainable and generates a healthy surplus on the total portfolio (loans and equity). Previously, Stefan was Fund Manager, AfriCap Microfinance Fund, based in, Senegal, and prior to that Director International Operations, Calmeadow, Toronto, Canada. His formal education includes - MBA, University of Western Ontario, Canada, and B.Sc (Econ), LSE, England.

MR. ISHARA C. NANAYAKKARA, Director, Member of the Board, Representative of LOLC

Ishara is the Deputy Chairman of Lanka ORIX LEASING Company Ltd. He is the Managing 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 director on the boards of all LOLC subsidiaries.

16 MS. ANNE DEMEUSE, Director, Member of the Board, Representative of BIO

ANNE has been active within BIO nearly since its inception in July 2002. She initiated BIO’s first investments, mainly in the microfinance sector and SME funds, and held the position of Senior Investment Officer Asia until the end of 2005. Later in 2006, she changed to the position of Portfolio Controler, responsible for the monitoring of BIO’s investments. Before joining BIO, Ms. Demeuse worked in the banking sector, and more specifically in commercial banking and corporate finance where she advised for IPOs and trade sale transactions. She also gained audit experience within Ernst and Young after her graduation. Ms DEMEUSE holds a degree of Management Engineer from the Solvay Business School.

MR. OUM SAM OEUN, DIRECTOR, Member of the Board, Representative of PSCo.

SAM OEUN used to work as chief accounting officer in Takeo Province commerce department. Since 1995, he has worked with PRASAC credit program, and he has attended several training courses related to microfinance operations. 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 PS Co., Ltd until now. He holds Master Degree of Business Administration, Bachelor degree in Business Management and obtained a Diploma in Accounting and Commerce in 1988.

MR. RANJIT MICHAEL SAMUEL FERNANDO, Director, Member of the Board, Representative of FMO

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 assignment funded by the World Bank for the setting up of the Housing FinanceCorporation 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.

17 MANAGEMENT

MR. SIM SENACHEERT, General Manager

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, Operation Manager, and Deputy CEO with another MFI before joining PRASAC as General Manager in late 2003.

MR. OUM SAM OEUN, Deputy General Manager, Chief Operations Officer

Sam Oeun accredited Micro Finance Training of Trainer certified by ADBI, TLDC of the WB, and UNCDF, holding MBA of Banking and FinanceHe obtained a Diploma in Accounting and Commerce in 1988 and holds a Bachelor degree in Business Management. He used to work as chief accounting office in Takeo Province commerce department. Since 1995, he has worked with PRASAC credit program, and he has attended several training courses related to microfinance operations. He was promoted as Deputy General Manager of PRASAC MFI in early 2007.

MR. OUM SOPHAN, Deputy General Manager, Chief Finance Officer

Sophan obtained his Bachelor’s Degree in economics, specializing in banking and finance from the Royal University of Laws and Economics and holds a Master Degree in Business Administration from Norton University in 2003.

Before joining PRASAC’s team, Sophan had many years of experience in the field of accounting, banking, and finance. For instance, he used to hold CFO position at TPC Microfinance Institution from 2003 to 2008. He worked for the National Bank of Cambodia in various supervisory positions, including credit, planning, and accounting from 1981 to 1992. He joined Thai Farmers Bank where he served as Finance and Accounting Supervisor from 1992 to 2001. He also used to work as Accounting Manager of various private companies. He is currently holding the position of deputy general manager, chief finance officer.

18 MR. YANG KIMSRENG, Finance Manager

Kimsreng holds MBA in Finance and Banking, BA in the field of Accounting in 2003 and obtained Associates degree Specialized in Banking in 1998 at the Center for Banking Study. Also,he has more than ten-year experiences with Micro-banker system as well as finance and banking. Since 1998, he participated in several training courses related to microfinance. He joined PRASAC in 1998, and he was promoted to be senior staff in 2001 and to be Deputy Finance Manager in October 2007 and Finance Manager in April 2008.

MR. NEANG SOKHIM, Credit Manager

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, and he studied two years of BBA. He has attended many courses related to micro finance operations and other courses.

He started working in micro finance sector in 1998 as Credit officer, and then he was promoted to be a Junior Internal Auditor, Senior Internal Auditor, Deputy Operation Manager, Deputy Credit Manager. Currently, he is holding the position of Credit Manager.

MR. SAY SONY, Marketing Manager

Sony is an accredited Microfinance Training of Trainer certified by ADBI, TDLC of the WB, and UNCDF. He holds master of business administration and bachelor degree in Marketing Management.

Since 2005, he has attended numerous local and international training courses in Asia and Europe related to micro finance operations, products development, research and marketing.

He has more than seven-year experiences in project management as well as marketing coordination in both social and private sector. He joining PRASAC MFI in early 2005 as chief marketing, he was promoted to be a Marketing Manager of PRASAC MFI in 2007.

19 MR. OUK SAROEUNG, Internal Audit Manager

Saroeung holds Master degree of Business Administration and obtained a Bachelor degree in Banking in 1989. Since 1995, he participated in several training courses both in local and international including in Asia, Africa and Europe related to Audit, Finance, Management, and Microfinance. He used to work in banking sector. Also,he worked for the National Bank of Cambodia at Branch Svay Rieng in various supervisory positions, including credit and planning from 1983 to 1995. He has more than ten-year experiences in microfinance. He joined PRASAC in 1995; he was promoted to be Audit Manager in 2003.

MR. LY SOPHEAKTRA, IT Manager

Sopheaktra holds M.Sc. IT and MBA of Finance & Banking; He obtained B.Sc. of IT in 2002 and BA of Accounting & Finance in 2001.

Since 2002, he has attended numerous local and international training courses in Asia and Europe related to IT/MIS technology, Management, and Microfinance.

He has more than eight-year experience in IT/MIS Management, Database Design & Report Writing, Financial Accounting, and Microfinance operations. Prior to joining PRASAC, He used to work for a private construction company. He joined PRASAC in 2002 as MIS Officer, moving on to be senior staff in 2003 as MIS Unit Manager, and he was promoted to be IT Department Manager in early 2007.

MR. SUM SINATH, Branch Support Manager

Sinath accredited Microfinance Training of Trainer certified by ADBI, TDLC of the WB, and UNCDF, obtained associate degree in Accounting and Finance, bachelor degree in Business Administration and holds Master degree of Business Administration.

Moreover, he participated in several training course in career development of Microfinance skills both in local and oversea courses.

He has more than seven-year experiences in Microfinance sector. He joined PRASAC in 2002 as credit officer; he was promoted to be branch manager, Regional Manager and was promoted to be Branch Support Manager in early 2007.

20 Mr. Sou Vanthan Human Resourse Manager

Vanthan with more than twenty-year experiences in Microfinance and banking sectors since 1982 from various positions with PRASAC, NBC, and another MFI such as 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 also participated in many training courses such as TOT Principles of MFIs and Delinquency Management certified by CGAP & EDA Rural Systems Pvt Ltd, staff supervision and motivation, Goal Oriented Project planning and other training courses. Vanthan is a rare resource with deep root of experiences in human resource management and aspects especially for microfinance institution. Based on his commitment and management skill, he was promoted from a low level status to a highly-recognized and appreciative position, and he is currently holding the position of Human Resourse Manager of PRASAC, standing as a good model for other staffs.

21 Operational HIGHLIGHTS

Remark from Chairman Marketing and 23 Social Activities

36 Remark from General Manager Internal 25 Control and Risk Management 34 financial performance highlights Staffing and 28 Capacity Building

32 Operational HighlightS 30

22 Remark from Chairman

2009 was a challenging year for Cambodia, as it was for all economies around the world. The country encountered economic slowdown and GDP growth was estimated to be stagnant at 0%. The slowdown impacted all the main sectors of the economy including agriculture, garments and tourism. However, in late 2009 positive signs emerged with agribusiness export more than doubling, year-on-year air tourist arrival stop declining, and domestic credit and inflow of foreign direct investment began to bounce back. The government also started to diversify the export market. Economic growth in 2010 is forecast to reach around 4%.

By anticipating the impact of the global economic downturn early, more stringent measures were put in place to screen out unqualified clients as much as possible to ensure that we provided credit only to existing and established clients so that we were able to manage the risks for ourselves and our clients. Portfolio quality took priority over portfolio growth. As a result, in spite of turbulent economic environment, PRASAC’s Portfolio at Risk was the lowest among major microfinance institutions in Cambodia, even though the number of clients decreased. Though there has been some improvement in the economic environment, the current issues in the international market place means that we will have to continue in our vigilance and though we anticipate PRASAC increasing its loan portfolio this year it will not be as rapid growth as previously.

One of the major issues that came out of the economic environment in 2009 was over indebtedness. This has caused a general rise in the MFI sectors PAR figures and is a concern. PRASAC together with the Cambodian Microfinance Association is discussing ways that this can be managed with the National Bank Of Cambodia until such a time the proposed Credit Bureau is up and running.

23 To serve more clients and reduce costs for the clients, we have expanded into new areas by opening new offices. To be a more responsible lender, to improve client satisfaction and loyalty, reputation and brand value, PRASAC also established “Client Protection Policy”, which educates our staff on ethical behavior in dealing with clients.

In addition to the office network expansion and the strict measures to maintain good quality ofloan portfolio, efficiency and productivity remain a major challenge. In 2009, the implementation of thenew Flexcube Core Banking system started and it proved to be a challenging task. Our staffs have worked hard in setting up the new system, and a lot of training courses were conducted on the new software. We believe that this new technology base will allow the company to further grow and enhance its products and service, and enhance customer satisfaction. We anticipate switching over to this new system by the end of 2010.

Founded in 1995 as a small rural project, and transformed into a financially viable commercial company offering microfinance services, PRASAC currently operates through 134 offices and growth in offices will continue as we move into new provinces and areas. PRASAC has a long history of investing in our communities through charitable contributions, sponsorships, and workplace giving. PRASAC has sponsored public events or organizations relating to improving microfinance practice in Cambodia. PRASAC aimed to be a sustainable company that conducts its business in ways that benefits extend naturally to all stakeholders, including employees, customers, business partners, the communities in which it operates, and, of course, shareholders. We believe that our business operation is not only profitable, but also sustainable. We are currently looking at various options to give back to the communities where we operate and the focus of this will be finalized with the Board by the middle of 2010.

Our past is defined by adherence to our core values. Our future will be determined by the same commitment to these values and the solid execution of our strategies.

On behalf of the Board of Directors of PRASAC MFI, I wish to thank PRASAC’s management and staffs for their hard work and dedication to our customers. I also wish to thank Board of Directors, shareholders, customers, suppliers, the Royal Government of Cambodia, and especially the National Bank of Cambodia for their continued support and advice.

MichaEl A. Temple, Chairman

24 Remark from General Manager

From financial year 2004 to 2008 were considered as good period which allowed PRASAC to expand its operations and grow portfolio rapidly from USD6.6 Million to USD60.0 Million by end of 2003 and 2008 respectively. But, due to the global financial crisis and the economic downturn, the operations of PRASAC during 2009 were also affected and it was considered as a difficult period which we had never faced this kind of difficult external environment during the past five years. Although, we could not escape from the impacts of the global financial crisis and economic downturn, but we still could manage our operations with remarkable achievements. And the followings are the highlights of our achievements.

From January to September of 2009, loan portfolio was lower than 2008 portfolio and the disbursement was slowdown impacted by several factors such as global financial crisis, economic downturn, the multiple loans / overlapping loans with other MFIs, decrease of portfolio quality, and so on. But the portfolio started picking up again during the last quarter of 2009 and as a result portfolio growth by 11% to KHR267 Billion from KHR240 Billion by end of 2009 and 2008 respectively. Portfolio in agricultural decreased from 37% in 2008 to 29% in 2009 while portfolio in trading increased from 33% to 36% and personal loans increased from 12% to 14% at end of 2008 and 2009. The portfolio in agriculture sector was decreased due to the decrease of group loans. During 2009, in order to avoid overlapping loans, group loan disbursements were reduced. As part of our social objectives by cooperation with the National Biodigester Project (NBP), we also provided 1213 loans (about USD700,260) to the farmers for renewable energy in 2009 in accumulated there were 2,559 loans provided to this purpose since November 2007 to December 2009 and PRASAC also contract with ECOSORN in order to contribute to poverty reduction through the improvement of physical access to financial services such as credit and savings. PRASAC reaching 13,962 beneficiaries, in which 4,577 borrows, 3,248 savers with KHR2,780,975,500 of disbursement from November 2007 to December 2009 and PRASAC have established 19 offices in these three provinces ( Siem Reap, Battambang, and Banteay Meanchey ) and operating in 14 districts 40 communes and 91 villages.

25 It was observed that 2009 the portfolio quality of the whole sector was deteriorated due to the financial crisis, economic downturn, and over indebtedness caused by the overlapping or multiple loans from different MFIs and banks. Thank to our professional and discipline staffs and our proactive measures we could maintain our portfolio at-risk ratio below the sector rate. However, our nonperformance loans increased from 0.23% (end of 2008) to 1.66% (end of 2009).

The number of active clients decreased by 12% from 100,116 to 87,945 at the end of 2008 and 2009. The decrease of number of clients due to the decrease of group loans in order to avoid overlapping loans with other MFIs during the crisis period. As a result, the group loans decreased by 50% from 19,179 to 9,634 as end of 2008 and 2009. In addition, the individual loans also decreased by 3% in 2009.

Total revenue for 2009 was 12% lower than projections due to the decrease of portfolio and decrease of interest rate to attract good clients. It increased by 19% compared with 2008. Yield on gross portfolio decreased from 30.2% to 27% due the increase of larger loans with lower interest rate. The financial expenses increased by 70% compared with 2008 from 2.6MUSD to 4.5MUSD due to the increase of borrowing rate during late 2008. The operating increased by 14% and 5.7% higher than projections. The actual higher than projections caused by the set-up new offices in new area. However, the operating costs decreased to 13.4% from 15.5% and to 12.5% from 14.8% compared with gross portfolio and total assets respectively. Net profit was 6% lower than last year. Similar to revenue, the net profit decrease due to slowdown disbursements and lowering interest rate. Risk coverage ratio decreased from 717% to 128% due to the increase of non-performing loans during 2009. But, it still could cover this risk. The equity increased by 29% and the capital was still adequate (CAR was 23.6%).

By taking the opportunity of the slowdown period, we spent our resources to strengthen our institutional capacity such as increase number of offices from 90 (2008) to 116 (2009) in order to increase clients’ convenience and cut costs to the clients, increased number of staff from 1,024 to 1,246 by end of 2008 and 2009, selection and implementing new core banking system and as a result there were four offices running new system parallel with the legacy system.

During 2009, the second credit rating was undertook by Microfinanza rating agency (First rating undertook by the agency) with the rate of BBB+ and stable outlook. At the same time the first social rating was also undertook by Microfinanza with rate of BB. Although, the rating was not good, but there were some strengths and opportunities explored by Microfinanza during the rating.

Strengths Opportunities

- Ownership structure defined - Expansion into untapped markets of the country - Good geographic coverage in the whole country - Transformation into a deposit-taking institution - Rather good standardization of processes - Adoption of the new MIS - Strong and successful relationship with many - Focus on capacity building given the significant stakeholders (donors, investors, technical market share assistance providers, etc.) - New financial products such as social loans - Good capitalization (educational, housing products)

26 By adopting the prudential strategy for 2010, PRASAC will not prioritize on portfolio growth, but will focus on improving portfolio quality, strengthen management and staff capacity, strengthening management control, rolling out core banking system to all offices, and introducing new services.

Finally, on behalf of management and staff, I would like to express my sincere thanks to all stakeholders that always support us and hoping that all stakeholders will continue supporting and help developing PRASAC to become an institution that will continue provide more benefits to all stakeholders.

Sincerely yours,

Sim Senacheert, General manager

27 financial performance highlights

Productivities and efficiency

• Portfolio per credit officer increased from 91,127USD in 2007 to 111,353USD in 2008 and increase to 116,384 USD per credit officer in 2009. • Number of active client per credit officer decreased from 189 clients in 2008 to 163 clients in 2009. Portfolio at Risk (30days) increased from 0.23% in 2008 to 1.66% in 2009.

2007 2008 2009 Exchange rate 4,003 4,081 4,169 Currency USD USD USD Total loan outstanding 32,988,091 57,950,559 62,730,902 Total Number of CO 362 529 539 Outstanding per CO 91,127 111,353 116,384 Active client 94,555 100,116 87,945 Active client per CO 261 189 163 Portfolio at Risk 0.22% 0.23% 1.66%

Active client per CO Outstanding per CO Portfolio at Risk 140,000 1.80% 120,000 1.60% 300 116,384 1.40% 100,000 111,353 250 1.20% 80,000 91,127 1.00% 200 60,000 0.80% 150 40,000 0.60% 100 261 0.40% 189 163 20,000 0.20% 50 0.00% 2007 2008 2009 2007 2008 2009

Profitability

The yield on portfolio decreased from 30.2% in 2008 Funding costs increased from 5.5% in 2008 to 6.9% to 27.0% in 2009 . in 2009.

Yield on portfolio Financial Expense Ratio 32% 7.0% 31% 6.9% 6.0% 30% 5.5% 29% 5.0% 4.4% 28% 32% 4.0% 27% 30% 3.0% 26% 27% 2.0% 25% 1.0% 24% 0.0% 2007 2008 2009 2007 2008 2009

28 Operating expenses deceased from 14.8% in 2008 Return on Assets decreased from 5.8% in 2008 to to 12.5 in 2009 compared with average total assets. 4.1% in 2009.

Operating Expense Ratio Return On Assets (ROA)

16.0% 15.8% 6.0% 14.8% 6.0% 14.0% 5.8% 5.0% 12.0% 12.5% 10.0% 4.0% 4.1% 8.0% 3.0% 6.0% 4.0% 2.0% 2.0% 1.0% 0.0% 0.0% 2007 2008 2009 2007 2008 2009

Admin Expenses decreased from 5.5% in 2008 to In order to improve the efficiency, the plan is to 3.7% in 2009. increase the productivity of credit officers (revised

Administrative Expense Ratio incentive) and offices through the increasing of loan officers who will work with the clients. 6.0% 5.0% 5.5% 5.5% 4.0% 3.7% 3.0% 2.0% 1.0% 0.0% 2007 2008 2009

29 Operational HighlightS

Loan Portfolio

By the end of 2009, the PRASAC’s loan portfolio reached KHR 267,183 million, increased 11.14 percent over the previous year.

Loan has been classified as group loan and individual loan that can be disbursed in KHR andUSD currency. The group loan represented 2.45 % where as individual loan represented 97.55% of total portfolio outstanding. The group loan portfolio outstanding decreased by 5.48% with amount of KHR6,816 million and individual loan increased by 11.66 percent with amount of KHR 260,367 million compared to previous year.

Loan portfolio in KHR currency grew by 1.87 percent with amount of KHR107,569 million and loan portfolio in USD currency grew by 18.41 percent with amount of KHR159,614 million.

Loan Portfolio (Figures are in KHR Millions)

December December December Changed Changed Key indicators 2007 2008 2009 Amount % Total loan portfolio 134,295 240,394 267,183 26,789 11.14% Portfolio in group loan 5,491 7,267 6,816 (451) -6.21% Portfolio in individual loan 128,804 233,128 260,367 27,239 11.68% Portfolio loan in KHR 68,705 105,598 107,569 1,971 1.87% Portfolio loan in USD(000) 65,590 134,797 159,614 24,817 18.41%

Borrowers

By the end of 2009, the number of active borrowers was 87,945 a decrease of 12.16 percent compared to previous year. In term of product types, group loan borrowers decreased by 49.77%, and individual loan borrowers decreased by 3.24%. In term of gender. Female borrowers increased by 0.56% while male borrowers decreased by 22.99% compare to previous year.

December December December Changed Changed Key indicators 2007 2008 2009 Amount % Total Number of Borrower 94,555 100,116 87,945 (12,171) -12.16% Group Loan Borrowers 27,237 19,179 9,634 (9,545) -49.77% Individual Loan Borrowers 67,318 80,937 78,311 (2,626) -3.24% Female 43,555 46,053 46,311 258 0.56% Male 51,000 54,064 41,634 (12,430) -22.99%

30 Loan Disbursement

In 2009, PRASAC disbursed loan with total amount of KHR 346,313 million an increase of 5.69 percent over previous year. The total number of loans disbursed in 2009 was 88,735 a decrease of 5.69 percent compared to previous year. The average disbursed loan size was KHR 3.90 million.

Loan Disbursed (Amounts are in KHR Millions)

December December December Changed Changed Key indicators 2007 2008 2009 Amount % Total Disbursed Amount 200,602 327,665 346,313 18,648 5.69% Total Number of Loans Disbursed 89,010 95,732 88,735 (6,997) -7.31% Avg Loan Amount Disbursed 2.25 3.42 3.90 0.48 14.02%

Operation Area and branch network

By the end of 2009, PRASAC operated in 21 provinces, 131districts, 1,256 communes, and 8,098 villages, an increase of 4 provinces, 5 districts, 76 communes, 623 villages compared to previous year. In term of office net work, there were an increase of 3 branches, 13 sub branches, and 12 service offices compared to previous year.

December December December Changed Changed Key indicators 2007 2008 2009 Amount % Total Number of province 14 17 21 4 23.53% Total Number of District 100 126 131 5 3.97% Total Number of Commune 941 1,180 1,256 76 6.44% Total Number of Village 6,210 7,475 8,098 623 8.33%

Loan Portfolio Quality

At the end of 2009, Portfolio at risk ratio was 1.66% and repayment ratio 97.45%. The good loan portfolio comes from good portfolio monitoring from all staff level, well trained staff, especially, credit officers, well established credit policy, and procedures and clear loan work out policy. Staff motivation, such as incentive that link with loan quality is also a tool for maintaining good portfolio quality. Besides these, the current MIS system can provide data and information that make availability for staffs to monitor and follow up and analyze portfolio well.

(PAR amount and principal past due is in Millions)

December December December Changed Changed Key indicators 2007 2008 2009 Amount % PAR Amount (30days) 296 543 4,437 3,894 717.13% Principal Past Due 294 413 3,004 2,591 627.36% PAR Ratio (30days) 0.22% 0.23% 1.66% 1.43% 621.74% PAR Ratio (30 days) Group Loan 0.90% 0.01% 3.54% 3.53% 35300.00% PAR Ratio (30 days) individual Loan 0.19% 0.23% 1.66% 1.43% 621.74% Repayment Ratio 99.30% 99.30% 97.45% -1.85% -1.86%

31 Staffing and Capacity Building

Staffing and Staff Training Employment trend and Development

- Currently, PRASAC has employed 1,246 staffs PRASAC needs skillful and knowledgeable staffs comprised of 967 males and 279 females. that can carry out their tasks and understand about micro-finance or banking environment. - In 2009, through this figure, we could also say With this intention, PRASAC has 24 staffs who that PRASAC’s turnover rate was improved since hold Associate Degree, 424 Bachelor Degree, and it was lower than the past years. 18 Master Degree. Moreover, most of them are improving their education background by

1400 pursuing another degree including 14 in Associate 1246 1200 Degree, 417 in Bachelor Degree, 93 in Master 1024 1000 Degree, 4 in CPA and 3 PhD Degree.

800 722 600 To assure the quality of services, PRASAC pays 400 413 311 more attention to staff development and training 200 152 111 since they started their careers with PRASAC. 40 89 0 2007 2008 2009 The in-house trainings are regularly organized Turn Over Recruitment Total Staff and provided. PRASAC occasionally provides the chances to many staffs to participate in the in-country and oversea courses to gain knowledge of microfinance development in Cambodia as well as in global contexts, microfinance management skills, related technical skills and regulation of National Bank of Cambodia.

As a result, in the year 2009:

- PRASAC trained 332 new staff - There were 2,461 participants in refreshment training in which some of them attended more than one course during this year. - For oversea courses, participated by 10 professional staff.

32 Job Opportunity Benefits Highlight

PRASAC welcomes people who are interested PRASAC offers a competitive benefit pacages as in joining a diverse, talented, professional, and following: extremely committed team. Every position at PRASAC, from the bottom to the top, - Competitive Salary and annually increased contributes to understanding of vision and - Working days: 5 days or 40 hours / week mission. PRASAC gives opportunity for those - Education support and facilitation who are interested in a career dedicated to the - Bonus during traditional events (Khmer NewYear, poverty alleviation and an institute promoting the Pchum Ben) transparency, challenging working condition and - 18 days of Annual Leave working environment; providing fairness and - Public holiday as determined by AKNUKRET of accuracy benefit package; and fully following or the government extra the Labor Law of Cambodia. - Maternity Leave and allowance - Variable salary depending on performance - Severance Pay - Annual Incentive at year end up to three months of current salary - Insurance on Accident & Health Care program and indemnity payment for all staff - Non-financial recognition - And more…

33 Internal Control and Risk Management

To minimize the risk factor, PRASAC’s management At the beginning of the internal audit role, the has linked Internal Control to risk management. Risk internal control policy and procedures have been management is the process of assessment of relative developed and updated accordingly and particularly risk and ensuring that controls are present and with professional staff. As at December 2009 the effective. It covers prevention of potential problems total staff of internal audit department consist of and the early detection of actual problems when they one internal Audit manager, one Deputy Internal occur. Audit manager, three Audit Unit managers one Senior Auditor and 13 Audit Assistants working in Internal Control is a set of integrated methods and three main units such as Operations Internal Audit procedures translated into regular and periodic Unit, Finance and Admin Internal Audit Unit and IT/ activities that preserves safety of asset, improves client MIS Internal Audit Unit. service, ensure reliability of financial information and staff adherence to management policies and As at December 2009, there were 16,098 loan guidelines. PRASAC’s management uses Internal accounts audited, 20 reports related to Finance, Control to ensure a system of accountability along Human Resource and Admin Department, and 174 with prevention of errors and irregularities, Internal reports related to operations. Audit department is an independent appraisal function under the control of the board of the Through the findings of internal audit assignment directors of PRASAC, the audit committee. Internal in the full year of 2009, we noticed that the trend auditing is essential for ensuring the operations, of errors and frauds decreased, and most field staff appropriateness of control and ensuring the shown stronger commitments to comply with reliability and integrity of financial management institutional policies and procedures. Moreover, most system of keeping record and reporting. of clients are not only satisfied with PRASAC’s services but also appreciated with our professional Internal Audit department was started in 2001 staff with customer care minded. with a clear roles and responsibilities to improve the internal control and analysie risk related to the PRASAC has designed Risk Management tools and operations as well as the compliance by producing approaches that respond to their specific clients, accurate reports on time to branch management and lending methodologies, operating environments, executive management to take actions. financial and social performance objectives. Each Department has identified risks by themselves with The internal audit reports are issued monthly based mitigation measures in place, but we are in process on each branch with recommendations to respond to of doing. the real cases and findings. Additionally, the summary of significant findings are issued monthly bases to Audit Committee as well as the management to understand the current business situation and trends.

34 The effective approaches to managing credit risks in PRASAC are included as the following:

• Well-designed screening form for borrowers, careful loan assessment, close monitoring, clear collection procedures, and active oversight by senior management. Delinquency is understood and addressed promptly to avoid its rapid spread and potential for significant loss.

• Good portfolio reporting that accurately reflects the status and monthly trends in delinquency, including a portfolio-at-risk aging schedule and separate reports by loan product.

35 Marketing and Social Activities

Market and Clients Branding and Communications

PRASAC is the largest MFI in Cambodia in terms PRASAC is continuously building up its corporate of number of staffs, loan portfolio, office networks, brand image as well as its products via effective and coverage areas. By end of 2009, PRASAC had communication strategy and approach. It has 1,246 staff, 114 offices in 17 provinces/towns, 131 developed a clear communication strategy with districts, 1,256 communes, 8,098 villages, 87,945 division of internal and external audiences by different borrowers, total assets 295 billion KHR, and 267 communication tools such as website, annual reports, billion KHR loan outstanding about 22% of total newsletters, brochures, calendars, leaflets, posters, microfinance market shares. T-shirts, banners, and other mass media communication via Radio and TV. Our clients are village households with repayment capacity that constitutes up to 90% of all As a result, PRASAC had defined its current households located in rural areas where bad roads positioning in good client perception as a well and absence of facilities and utilities prevail. Apart managed and reliable MFI as a neighborhood MFI from rural people who generate income from rice with deep roots in which communities it operates. production as well as from farming, PRASAC also PRASAC MFI goes out of its way to serve its targets micro-enterprises that produce or/and offer customers with respect and friendly service. services predominantly to the market.

As mentioned, PRASAC is serving about 11% of total microfinance clients which 49.5% of those clients used loans for agricultural livelihoods; particularly, rice production and other multi-cultivations including buying seeds, animals, biogas and other agricultural equipments while 50.5% of loans utilized for services and trade activities.

36 Environmental Social Activities and Social Ethics

As a deep rooted MFI in community, PRASAC is PRASAC provides loans to beneficiaries of intending to stand as a combined social and ECOSORN project commercial oriented company which is to continue focusing on poverty reduction in Cambodia with PRASAC contracted with ECOSORN project in sustainable financial returns. order to contribute to poverty reduction through the improvement of physical access to financial services Environment: such as credit and savings. At the same time, the PRASAC’s credit policy does not allow any project helps increasing the household income; involvements with environmental pollutions such as particularly, through increasing agricultural toxic gas, polluted water, chemical residue, etc. and it productivity and local community empowerment in also limits itself not to provide its services to any selected rural areas of Cambodia. activity that may negatively effect to the environment. However, PRASAC has been joining a national PRASAC reaches the expected results of the contract biodigester program to take part in forest with remarkable achievements, by established 19 protection as well as community sanitation. In this offices in 14 districts 40 communes and 91 villages in regard, PRASAC provided loans to 1,346 three provinces, Siem Reap, Battambang and Banteay households out of 2,200 plants; it’s about 61% of Meanchey. As a result of the cooperation, PRASAC total plants constructed by the program as at targeted 13,962 beneficiaries in which 4,577 December 31, 2008. borrowers, 3,248 savers with KHR2,780,975,500 of disbursement amount from November 2007 to Social Ethics: December31, 2009 in ECOSORN target communes. Apart from commercial and environmental protection, Social Ethics is another concerning issue. PRASAC enforces ethical practice not only to field staffs but also to management levels by creating an internal rule together with a revised personnel policy, customer care and service policy to ensure that all staffs are treated fairly, and to enforce a common relationship among staffs as well as towards clients and community as a whole. Particularly a simple client protection principle was also set to keep client’s satisfaction and sharing our social ethics to Cambodian people.

37 At the same time, PRASAC also provides financial PRASAC’s provide loan for Biodigester Production literacy to the poor Relation to the Millennium Development Goals, Besides credit operations, under the support of PRASAC has been collaborating with the National ECOSORN project, PRASAC also provides financial Biodigester Programme (NBP) since 30th November literacy training to the households in three provinces. 2007. In terms of social responsibility, the Particularly, this training focused on two modules collaboration is not only for poverty reduction but such as “Savings” and “Budgeting” for the also environment protection since it can save on purpose of increasing the household’s understanding traditional energy sources, fossil energy sources and on households’ savings and savings disciplines on how improving soil fertility. to set savings goal and make savings plan, and how to analyze their family’s financial situation. To comply with the partnership goal, PRASAC has formed the new biogas loan product to serve the As a result, in 2009, we organized 74 courses people who plan to buy the biogas production in 8 conducted in three provinces, Battambang, Banteay biodigester programme provinces, Prevey Veng, Svay Meanchey and Siem Reap with total of 3,467 Rieng, Kadal, Takeo, Kampong Speu, Kampot, participants in which 74% are women. From this Kampong Cham, and Kampong Chhnanng. social commitment, we hope that the household living standards will get more improvement, the rate of As a result, by December 2009, PRASAC served migration from remote areas will be reduced and 2,559 clients with convenience services, low there will be more saving increment and alleviation interest rate with total of USD1,450,670 loan of high risk from emergency expense. disbursement. Moreover, besides getting easier with renewal energy resource especially the use of biogas cooker instead of firewood, the biogas also help protect human health as well as reduce indoor environmental pollution with the improvement of hygienic circumstances and dung management.

38 PRASAC Sponsors Buy Cambodian Products PRASAC contributes to build youth capacity and Campaign career development

The Phnom Penh Small and Medium Industry As always being part of building quality of education Association (PSMIA) organized a trade fair “Buy as well as growing human roots of Cambodia, Cambodian Products” on the occasion of Water PRASAC has actively joined as co-sponsor for Festival in 2009. As the main sponsor of this event, various educational events such as Career Guidance PRASAC objectively expects to take part in promoting for the Future, Outstanding Student Talk Program, the campaign in order to improve the quality of local and Student Best Speakers Program prepared by products to be more standardized and competitive if The Cambodian Mekong University for improving compared to the imported products. This is expected the quality of education in Cambodian and developing that Cambodian people will change their habits for their critical thinking and understanding through consuming or buying our local products instead. multiple perspectives. PRASAC also joined as Concerning with this, PRASAC is willing to promote co-sponsor for Life Preparation for Success seminar Small and Medium Enterprise (SME) for better which was organized by Help Our Homeland competitive position in the market. Association for building youth capacity and competency especially leading them to be ready for decision making and preparation for their life and growth for the future. PRASAC’s Presence at Banking and Microfinance Events All Cambodian students are the significant human capital for fueling the economic growth and moving As an active microfinance practitioner, PRASAC the country out of the poverty trap. Consequently, joins in many microfinance and banking events as PRASAC is always willing to provide support in such a contribution sponsor as well as to expose itself meaningful events to produce more challenging to the government, all banking and microfinance output and increase more economic growth and sectors and other private companies and NGOs. poverty reduction through PRASAC social PRASAC joined in a Baking Exhibition 2009 contribution. organized by NiDA and IDG, Modernization of the Banking and Microfinance Industry in Cambodia hosted by the NBC, the Cambodia Microfinance Conference by MoEF and IDG and PRASAC was also present at the Cambodia’s Microfinance amid the Global Crisis by focusing on how microfinance institution could boost the country’s economy, promote financial inclusion and enhance customer protection. Within the hard time of economic crisis, PRASAC is not only a key financial service provider but also a good protector for its clients in terms of interest rate reduction and careful client assessment preventing from over indebtedness.

39 Audited Financial Statements

Report of the Board of Directors 41

Report of Statement of the independent cash flows auditors 49 46

Statement of changes in Balance equity sheet 48 47

Income statement 48

40 REPORT OF THE BOARD OF DIRECTORS

The Board of Directors have pleasure in submitting BAD AND DOUBTFUL LOANS their report together with the audited financial statements of PRASAC Microfinance Institution Before the income statement and balance sheet of Limited (“the Company” or “PRASAC”) for the year the Company were prepared, the Board of Directors ended 31 December 2009. took reasonable steps to ascertain that actions had been taken in relation to the writing off of bad loans PRINCIPAL ACTIVITY and the making of allowance for doubtful loans, and satisfied themselves that all known bad loans had PRASAC is engaged primarily in the provision of been written off and adequate allowance had been micro-finance services to the rural population of made for bad and doubtful loans. Cambodia through its headquarters in Phnom Penh and various provincial offices in the Kingdom of At the date of this report, the Board of Directors is Cambodia. not aware of any circumstances, which would render the amount written off for bad loans, or the amount of allowance for doubtful loans in the financial FINANCIAL RESULTS statements of the Company, inadequate to any substantial extent. The financial results of the Company for the year ended 31 December 2009 were as follows:

KHR’000 Profit before income tax 14,708,981 Income tax expense (3,551,075) Profit for the year 11,157,906

RESERVES AND PROVISIONS

There were no material movements to or from reserves and provisions during the financial year other than as disclosed in the financial statements.

41 CURRENT ASSETS VALUATION METHODS

Before the income statement and balance sheet of At the date of this report, the Board of Directors is not the Company were prepared, the Board of aware of any circumstances which have arisen which Directors took reasonable steps to ensure that any render adherence to the existing method of valuation current assets, other than debts, which were unlikely of assets and liabilities in the financial statements of to be realised in the ordinary course of business at the Company as misleading or inappropriate. their value as shown in the accounting records of the Company had been written down to an amount which they might be expected to realise. CHANGE OF CIRCUMSTANCES

At the date of this report, the Board of Directors is At the date of this report, the Board of Directors is not aware of any circumstances,which would render not aware of any circumstances, not otherwise dealt the values attributed to the current assets in the with in this report or the financial statements of the financial statements of the Company misleading. Company, which would render any amount stated in the financial statements misleading.

ITEMS OF UNUSUAL NATURE

The results of the operations of the Company for the financial year were not, in the opinion of the Board of Directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Board of Directors, to affect substantially the results of the operations of the Company for the current financial year in which this report is made.

42 CONTINGENT AND OTHER THE BOARD OF DIRECTORS LIABILITIES

At the date of this report, there does not exist: The members of the Board of Directors during the (a) any charge on the assets of the Company year and at the date of this report are: which has arisen since the end of the financial year which secures the • MR. MICHAEL A. TEMPLE, liabilities of any other person; representing Dragon Capital Group Limited, (b) any contingent liability in (Chairman) respect of the Company that has arisen since the end of the financial year • MRS. ANNE DEMEUSE, other than in the ordinary course of its representing Belgian Investment Company business operations. for Developing Countries SA, (Director)

No contingent or other liability of the Company has • MR. RANJIT FERNANDO, become enforceable, or is likely to become representing the Nederlandse enforceable within the period of twelve months after Financierings-Maatschappij voor the end of the financial year which, in the opinion Ontwikkelingslanden N.V., (Director) of the Directors, will or may substantially affect the ability of the Company to meet its obligations as and • MR. ISHARA C. NANAYAKKARA, when they fall due. representing Lanka ORIX LEASING Company Ltd, (Director)

EVENTS SINCE THE BALANCE • MR. STEFAN A.V. HARPE, SHEET DATE representing Oikocredit, Ecumenical DevelopmentCooperative Society, No significant events occurred after the balance sheet U.A., (Director) date that requires disclosure or adjustment other than those already disclosed in the accompanying notes to • MR. OUM SAM OEUN, the financial statements. representing PRASAC Staff Company Ltd., (Director)

All members are non-executive board members, except Mr. Oum Sam Oeun, who holds the position of Deputy General Manager.

43 DIRECTORS’ INTERESTS

The Directors are representing the interests of shareholders of PRASAC during the year and at the date of this report are as follows:

SHAREHOLDER REPRESENTED BY HOLDING NUMBER OF SHARES % KHR 20,000 EACH

Dragon Capital Group Limited MR. MICHAEL A. 18% 138,626 TEMPLE

Belgian Investment Company for MRS. ANNE 18% 138,626 Developing Countries SA (BIO) DEMEUSE

The Nederlandse MR. RANJIT 18% 138,626 Financierings Maatschappij voor FERNANDO Ontwikkelingslanden N.V.(FMO)

Lanka ORIX LEASING Company Ltd MR. ISHARA C. 18% 138,626 (LOLC) NANAYAKKARA

Oikocredit, Ecumenical Development MR. STEFAN A. V. 18% 138,626 Cooperative Society, U.A. HARPE

PRASAC Staff Company Ltd. MR. OUM SAM OEUN 10% 77,020

100% 770,150

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangements existed to which the Company is a party with the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as disclosed in the financial statements) by reason of a contract made by the Company or a related corporation with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than as disclosed in the financial statements.

44 RESPONSIBILITIES OF THE BOARD OF DIRECTORS IN RESPECT OF THE FINANCIAL STATEMENTS

The Board of Directors is responsible for ascertaining that the financial statements are properly drawn up so as to give a true and fair view of the financial position of the Company as at 31 December 2009, and of the results of its operations and its cash flows for the year then ended. In preparing these financial statements, the Board of Directors is required to:

(i) adopt appropriate accounting policies which are supported by reasonable and prudent judgments and estimates and then apply them consistently;

(ii) comply with Cambodian Accounting Standards and the guidelines issued by the National Bank of Cambodia or, if there have been any departures in the interest of true and fair presentation, ensure that these have been appropriately disclosed, explained and quantified in the financial statements;

(iii) maintain adequate accounting records and an effective system of internal controls;

(iv) prepare the financial statements on a going concern basis unless it is inappropriate to assume that the Company will continue operations in the foreseeable future; and

(v) control and direct effectively the Company in all material decisions affecting the operations and performance and ascertain that such have been properly reflected in the financial statements.

The Board of Directors confirms that the PRASAC has complied with the above requirements in preparing the financial statements.

On behalf of the Board of Directors

Michael A. Temple, Chairman 17 March 2010

45 REPORTOF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS

KPMG Cambodia Ltd Telephone +855 (23) 216 899 No 2 Street 208 Fax +855 (23) 217 279 sangkat Beoung Prolit internet www.kpmg.com Khan 7 Makara Phnom Penh Kingdom of Cambodia REPORT OF THE INDEPENDENT AUDITORS To the shareholders PRASAC Microfinance Institution Limited We have audited the accompanying financial statements of PRASAC Microfinance Institution Limited (“the Company” or “PRASAC”), which comprise the balance sheet as at 31 December 2009, and the income statement, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes as set out on pages 8 to 65.

Management’s Responsibility for the Financial Statements

The Company’s management is responsible for the preparation and fair presentation of these financial statements in accordance with Cambodian Accounting Standards and the guidelines of the National Bank of Cambodia relating to the preparation and presentation of the financial statements. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion In our opinion, the financial statements give a true and fair view of the financial position of PRASAC as at 31 December 2009, and of its financial performance and its cash flows for the year then ended in accordance with Cambodian Accounting Standards and the guidelines of the National Bank of Cambodia relating to the preparation and presentation of the financial statements.

The accompanying financial statements have been translated into United States Dollars solely for presentation purposes. We have audited the translation and, in our opinion, the financial statements expressed in Khmer Riel have been translated into United States Dollars on the basis as set forth in Note 4 to the financial statements.

For KPMG Cambodia Ltd

Craig McDonald Audit Partner

Phnom Penh 17 March 2010

46 BALANCE SHEET AS AT 31 DECEMBER 2009

2009 2008 NOTE KHR’000 US$ KHR’000 US$ ASSETS Cash on hand 5 1,923,944 461,488 1,870,985 458,462 Deposits and placements with banks 6 18,198,317 4,365,152 794,586 194,704 Placement with other financial institution 15,743 3,776 - - Statutory deposits 7 830,292 199,159 824,390 202,007 Loans to customers 8 261,525,129 62,730,902 236,496,230 57,950,559 Other assets 9 5,406,607 1,296,859 6,009,722 1,472,610 Deferred tax assets 10 606,641 145,512 407,822 99,932 Intangible assets 11 3,946,405 946,607 - - Property and equipment 12 3,071,960 736,858 1,610,306 394,586 Total assets 295,525,038 70,886,313 248,014,041 60,772,860 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Deposits from customers 13 2,006,347 481,254 254,872 62,453 Borrowings 14 191,696,755 45,981,471 156,973,112 38,464,375 Other liabilities 15 3,872,979 928,995 4,669,225 1,144,137 Provision for income tax 10 3,109,199 745,790 3,427,838 839,951 Provision for retirement benefits 16 3,531,731 847,141 2,365,976 579,754 Share subscription received in advance 17 - - 172,897 42,366 Total liabilities 204,217,011 48,984,651 167,863,920 41,133,036 SHAREHOLDERS’ EQUITY Share capital 18 15,403,000 3,694,651 15,403,000 3,774,320 Other reserves 5,216,423 1,251,241 2,282,879 559,392 Retained earnings 25,031,027 6,004,084 16,806,665 4,118,271 Net shareholders’ equity 45,650,450 10,949,976 34,492,544 8,451,983 Subordinated debt 19 45,657,577 10,951,686 45,657,577 11,187,841 Total shareholders’ funds 91,308,027 21,901,662 80,150,121 19,639,824 Total liabilities and shareholders’ equity 295,525,038 70,886,313 248,014,041 60,772,860

The accompanying notes form part of these financial statements.

47 INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2009

2009 2008 NOTE KHR’000 US$ KHR’000 US$ Interest income 20 68,130,025 16,342,055 55,810,063 13,675,585 Interest expenses 21 (15,952,420) (3,826,438) (10,724,492) (2,627,908) Net interest income 52,177,605 12,515,617 45,085,571 11,047,677 Other operating income 22 526,846 126,372 991,656 242,993 Operating income 52,704,451 12,641,989 46,077,227 11,290,670 Fee and commission expenses 23 (189,722) (45,508) (118,317) (28,992) Operating and other expenses 24 (36,878,729) (8,845,941) (29,337,352) (7,188,765) Provision for bad and doubtful loans 8 (2,116,245) (507,615) (1,830,417) (448,522) Profit from operations 13,519,755 3,242,925 14,791,141 3,624,391 Grant income 25 1,189,226 285,255 486,889 119,306 Profit before income tax 14,708,981 3,528,180 15,278,030 3,743,697 Income tax expense 10 (3,551,075) (851,781) (3,787,266) (928,024) Net profit for the year 11,157,906 2,676,399 11,490,764 2,815,673

The accompanying notes form part of these financial statements.

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2009

SHARE SUBORDINATED OTHER RETAINED CAPITAL DEBT RESERVES EARNINGS TOTAL KHR’000 KHR’000 KHR’000 KHR’000 KHR’000

Balance as at 1 January 2008 5,408,000 45,657,577 - 7,598,780 58,664,357 Issuance of share capital 9,995,000 - - - 9,995,000 Transfers of special reserve - - 2,282,879 (2,282,879) - Net profit for the year - - - 11,490,764 11,490,764 Balance as at 31 December 2008 15,403,000 45,657,577 2,282,879 16,806,665 80,150,121 Net profit for the year - - - 11,157,906 11,157,906 Transfers of special reserve * - - 2,282,879 (2,282,879) - Transfers of ICO loan reserve ** - - 650,665 (650,665) - Balance as at 31 December 2009 15,403,000 45,657,577 5,216,423 25,031,027 91,308,027 (US$ equivalents) 3,694,651 10,951,686 1,251,241 6,004,084 21,901,662

* Special reserve represents reserves transferred from net profit which are calculated based on 5% of subordinated debt. The amount is non-distributable. ** ICO loan reserve represents reserves transferred from net profit for the year which are calculated based on 3.5% of outstanding principal of loan obtained from Instituto De Crédito Oficial of the Kingdom of Spain. The amount is non-distributable. The accompanying notes form part of these financial statements. 48 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2009

2009 2008 NOTE KHR’000 US$ KHR’000 US$ CASH FLOWS FROM OPERATING ACTIVITIES Net cash used in operating activities 26 (10,857,637) (2,604,374) (92,919,092) (22,768,707) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of intangible assets (3,948,331) (947,069) - - Purchase of property and equipment (2,351,330) (564,003) (761,987) (186,716) Proceeds from disposals of property and equipment 78,985 18,946 58,579 14,354 Net cash used in investing activities (6,220,676) (1,492,126) (703,408) (172,362) CASH FLOWS FROM FINANCING ACTIVITIES Proceed from issue share capital - - 9,337,445 2,288,029 Proceeds from borrowings 50,707,141 12,162,902 96,568,200 23,662,877 Repayments of borrowings (15,983,498) (3,833,893) (20,444,268) (5,009,622) (Repayment)/receipt of share subscription received in advance (172,897) (41,472) 172,897 42,366 Net cash generated from financing activities 34,550,746 8,287,537 85,634,274 20,983,650 Net increase / (decrease) in cash and cash equivalents 17,472,433 4,191,037 (7,988,226) (1,957,419) Cash and cash equivalents at beginning of year 2,665,571 653,166 10,653,797 2,661,453 Translation difference (13,787) - (50,868) Cash and cash equivalents at end of year 27 20,138,004 4,830,416 2,665,571 653,166 The accompanying notes form part of these financial statements. Net cash flows from operating activities 2009 2008 KHR’000 US$ KHR’000 US$ Profit before income tax 14,708,981 3,528,180 15,278,030 3,743,697 Adjustments for: Retirement benefits 1,241,028 297,680 1,022,471 250,544 Depreciation and amortisation 854,359 204,931 528,822 129,581 Provision for bad and doubtful loans 2,116,245 507,615 1,830,417 448,522 Gain on disposals of property and equipment (42,767) (10,259) (38,905) (9,533) Property and equipment written off 1,025 246 905 222 Operating profit before changes in operating assets and liabilities 18,878,871 4,528,393 18,621,740 4,563,033 Decrease/(increase) in operating assets: Statutory deposits (5,902) (1,416) (499,750) (122,458) Loans to customers (27,145,144) (6,511,188) (106,275,319) (26,041,490) Other assets 603,115 144,666 (2,500,682) (612,762) Increase/(decrease) in operating liabilities: Deposits from customers 1,751,475 420,119 (760,774) (186,418) Other liabilities (796,246) (190,992) 936,878 229,571 Cash used in operations (6,713,831) (1,610,418) (90,477,907) (22,170,524) Retirement benefits paid (75,273) (18,055) (174,905) (42,858) Income tax paid (4,068,533) (975,901) (2,266,280) (555,325) Net cash used in operating activities (10,857,637) (2,604,374) (92,919,092) (22,768,707) 49 contact us

OFFICE NETWORK WITH CONTACT ADDRESS 51

OUTREACH HIGHLIGHTS WITH OPERATIONAL MAP 62

50 OFFICE NETWORK WITH CONTACT ADDRESS

Head Office

Nº 25, St 294& 57, Boeung Kengkang1, Service Office Roka Kaong Chamkarmon, Phnom Penh, Cambodia. Roka Kaong Village, Roka Kaong 1 Commune, P.O.Box : 2412 Mukh Kampul District, Kandal Province. Tel : 023 220 102 / 023 213 642 Contact Person : Mr. Lim Ratanak Fax : 023 216 362 Contact Phone : 015 698 615 / 012 318 262 Email : [email protected] Website : www.prasac.com.kh Sub Branch Kampong Popil Kampong Popil Village, Kampong Popil Commune, Pea Reang District, Prey Veng Province. Contact Person : Mr. San Pheakdei Branch TuOl KoRk Contact Phone : 015 698 622 / 012 643 634 Nº 143-144, Road Nº 273, 14 Village, Email : [email protected] Sangkat Boeng Kak Muoy, Khan Tuol Kork, Phnom Penh. Service Office Pea Reang Contact Person : Mr. Pheng Chantivea Snay Pol Village, Roka Commune, Contact Phone : 015 698 496 / 012 869 492 Pea Reang District, Prey Veng Province. Email : [email protected] Contact Person : Mr. Ok Sorphea Contact Phone : 015 698 622 / 012 418 212 Sub Branch Baek Chan Chong Bangkoul Village, Baek Chan Commune, Service Office Tuek Khleang Angk Snuol District, Kandal Province. Tuek Khleang Village, Tuek Khleang Commune, Contact Person : Mr. Luch ChamRoeurn Lvea Aem District, Kandal Province. Contact Phone : 015 698 604 / 023 355 044 Contact Person : Mr. Chheng Rithy Email : [email protected] Contact Phone : 015 698 622 / 012 317 154

Sub Branch Prek Kdam Sub Branch PreaekTaKov Tuol Ngouk Village, Kampong Luong Commune, Leu Village, Svay Chrum Commune, Ponhea Lueu District, Kandal Province. Khsach Kandal District, Kandal Province. Contact Person : Mr. San Sovuthy Contact Person : Mr. Chum Rithy Contact Phone : 015 698 606 / 024 399 024 Contact Phone : 015 698 620 / 012 500 321 Email : [email protected] Sub Branch PochenTong Sub Branch Prek Anchanh PorProkCheung Village, Kakab Commune, Kraom Village, Prek Anchanh Commune, Dangkao District, PhnomPenh. MukhKampul District, Kandal Province. Contact Person : Mr. Ek Sophal Contact Person : Mr. Heng Khunthy Contact Phone : 015 698 517 / 012 923 729 Contact Phone : 015 698 615 / 024 390 016 Email : [email protected]

51 Branch Takhmao Sub Branch Kandal Stueng Svay Ming Village, Barku Commune, Krapeu Ha Village, Preaek Ruessei Kandal Stueng District, Kandal Province. Commune, Ta Khmao District, Contact Person : Mr. Kong Ty Kandal Province. Contact Phone : 015 697 451 / 012 536 053 Contact Person : Mr. Em Samnga Email : [email protected] Contact Phone : 015 697 363 / 012 777 611 Email : [email protected] Sub Branch Kien Svay Tuol Tnaot Village, Kokir Commune, Service Office Phsar Daeum Thkov Kien Svay District, Kandal Province. No 457EoE1, St 271 number1 Village, Contact Person : Mr. Va Rithy Sangkat Phsar Daeum Thkov, Contact Phone : 015 697 485 / 016 961 061 Khan Chamkar Mon, Phnom Penh. Email : [email protected] Contact Person : Mr. Ly Kimhom Contact Phone : 015 697 408 / 012 992 373 Service Office Chheu Teal Email : [email protected] Chheu Teal Village, Chheu Teal Commune, Kien Svay District, Kandal Province. Sub Branch Koh Thom Contact Person : Mr. San Sen Kampong Svay Kraom Village, Preaek Thmei Contact Phone : 015 697 485 / 016 376 098 Commune, Koh Thom District, Kandal Province. Contact Person : Mr. Dop Phirum Sub Branch Sampov Poun Contact Phone : 015 697 461 / 012 489 786 Kaoh Tiev (Ka) Village, Sampov Poun Commune, Email : [email protected] Kaoh Thom District, Kandal Province. Contact Person : Mr. Ly MengHong Service Office Kampong Kong Contact Phone : 015 697 509 / 012 427 229 Kampong Kong Village, Kampong Kong Commune, Email : [email protected] Koh Thom District, Kandal Province. Contact Person : Mr. Tech Menghor Contact Phone : 015 697 461 / 092 981 788

Sub Branch Saang Preaek Run Village, Preaek Koy Commune, Branch Kamopong Speu Saang District, Kandal Province. Mukh Khett Village, Roka Thum Contact Person : Mr. Heng Chantra Commune, Chbar Mon District, Contact Phone : 015 697 429 / 012 761 624 Kampong Speu Province. Email : [email protected] Contact Person : Mr. Im Buntha Contact Phone : 015 697 041 / 016 707 104 Service Office Prek Ambel Email : [email protected] Traeuy Troeng Village, Preaek Ambel Commune, Saang District, Kandal Province. Sub Branch Chbar Mon Contact Person : Mr. San Chheang Mukh Khett Village, Roka Thum Commune, Contact Phone : 015 697 429 / 012 297 387 Chbar Mon District, Kampong Speu Province. Contact Person : Mr. Em Sokha Contact Phone : 015 697 081 / 012 777 610

52 Sub Branch PhnomSrouch Branch Takeo Phsar Trapeang Kraloeng Village, Kiri Voan Commune , Phnum Sruoch District, Thnal Baek Village, Roka Krau Kampon Speu Province. Commune, Doun Keo City, Contact Person : Mr. Ouk sovatheaPheap Takeo Province. Contact Phone : 015 697 058 / 012 904 072 Contact Person : Mr. Sras Pheakdey Email : [email protected] Contact Phone : 015 697 931 / 012 472 455 Email : [email protected] Sub Branch Odong Bat Doeng Village, Khsem Khsan Commune, Sub Branch Daun Keo Odong District, Kampong Speu Province. Thnal Baek Village, Roka Krau Commune, Contact Person : Mr. Ten Eath Doun Keo City, Takeo Province. Contact Phone : 015 697 095 / 012 400 412 Contact Person : Mr. Em Pheng Email : [email protected] Contact Phone : 015 697 932 / 012 890 939 Email : [email protected] Service Office SamRaong Monourom Village, Monourom Commune, Sub Branch Ang Tasom Thpong District, Kampong Speu Province. Angk Ta Saom Village, Angk Ta Saom Commune, Contact Person : Mr. Tol Men Tram Kak District, Takeo Province. Contact Phone : 015 697 095 / 012 308 602 Contact Person : Mr. Suon Yon Contact Phone : 015 697 934 / 012 463 019 Sub Branch Kong Pisei Email : [email protected] Tram Khnar Village, Snam Krapeu Commune, Kong Pisei District, Kampong Speu Province. Sub Branch Kiri Vong Contact Person : Mr. Hun Bunrith Kampong Village, Preah Bat Choan Chum Contact Phone : 015 697 085 / 012 581 009 Commune, Kiri Vong District, Takeo Province. Email : [email protected] Contact Person : Mr. Prak Lon Contact Phone : 015 697 899 / 012 525 903 Sub Branch Slab Leaeng Email : [email protected] Phsar Slab Leaeng Village, Svay Rumpea Commune, Basedth District, Kampong Speu Province. Service Office Phsakiri Contact Person : Mr. Muy Thet Dei Kraham Village,Prey Rumdeng Commune, Contact Phone : 015 697 088 / 012 410 709 Kiri Vong District, Takeo Province. Email : [email protected] Contact Person : Mr. Chab Camreun Contact Phone : 015 697 899 / 092 636 977 Sub Branch Thnal TorTeung Email : [email protected] Thnal Totueng Village, Damnak Ampil Commune, Angk Snuol District, Kandal Province. Sub Branch Kampong Chrey Contact Person : Mr. Yun Sopheak Kampong Chrey Village,Smaong Commune, Contact Phone : 015 697 102 / 012 997 967 Treang District, Takeo Province. Email : [email protected] Contact Person : Mr. Chuong Sam Oeun Contact Phone : 015 697 862 / 012 602 526 Email : [email protected]

53 Sub Branch Prey Kabbas Sub Branch Chhuk Prey Lvea Kaeut Village, Prey Lvea Commune, Sat Pong Village, Sat Pong Commune, Prey Kabbas District, Takeo Province. Chhuk District, Kampot Province. Contact Person : Mr. Y Yoeun Contact Person : Mr. Kun Sokhornpagna Contact Phone : 015 697 941 / 012 500 823 Contact Phone : 015 697 895 / 012 963 337 Email : [email protected] Email : [email protected]

Service Office Angkor Borei Sub Branch Kampong Trach Kampong Luong Village, Angkor Borei Commune, Kampong Trach Ti Muoy Village, Kampong Trach Angkor Borei District, Takeo Province. Khang Kaeut Commune, Kampong Trach District, Contact Person : Mr. Neak Bunthan Kampot Province. Contact Phone : 015 697 941 / 012 877 113 Contact Person : Mr. Suth Samnang Contact Phone : 015 697 561 / 012 385 598 Sub Branch Bati Email : [email protected] Seiha Village, Chambak Commune, Bati District, Takeo Province Sub Branch Angkor Chey Contact Person : Mr. Chhun Bunna Pral Village, Tany Commune, Angkor Chey District, Contact Phone : 015 697 848 / 024 393 035 Kampot Province. Email : [email protected] Contact Person : Mr. Tith Sok Chea Contact Phone : 015 697 803 / 012 607 942 Sub Branch Romenh Chambak Ph’aem Village,Romenh Commune, Sub Branch Prey Nop Kaoh Andaet District, Takeo Province. Group5, Samrong Krom Village, Samrong Contact Person : Mr. Khat Nel Commune, Prey Nop District, Shihanouk Province. Contact Phone : 015 697 898 / 012 914 301 Contact Person : Mr. San Tha Email : [email protected] Contact Phone : 015 697 819 / 012 766 081 Email : [email protected]

Branch Kampot Branch Preah Sihanouk

Nº149, Kampong Bay Khang Cheung Nº145, Street, Mittapheap Street, Village, Kampong Bay Commune, Village1, Sangkat 2, Preah Sihanouk Kampot City, Kampot Province. City, Preah Sihanouk Province. Contact Person : Nhet Rith Contact Person : Mr. Lim Lakg Contact Phone : 012 423 125 / 099 816 434 Contact Phone : 015 697 996 / 012 622 398 Email : [email protected] E-mail : [email protected]

Sub Branch Banteay Meas Sub Branch Steung Hav Prey Krala Khang Lech Village, Village 2, Ou Treh Commune, Stueng Hav District, Tuk Meas Khang Lech Commune, Preah Sihanouk Province. Banteay Meas District, Kampot Province. Contact Person : Mr.Sean Mon Contact Person : Mr. Sam Try Contact Phone : 015 698 972 / 012 435 695 Contact Phone : 015 697 802 / 012 299 406 Email : [email protected]

54 Branch Koh Kong Sub Branch Baphnum Chheu Kach Village, Chheu Kach Commune, Ti 1 Village, Sangkat Smach Mean Chey, Ba Phnum, Prey Veng Province. Khem Marak Phoumin City, Contact Person : Mr. Um Aun Koh Kong Province. Contact Phone : 015 697 173 / 016 741 041 Contact Person : Mr. Phat Pheth Email : [email protected] Contact Phone : 015 698 766 / 016 951 971 E-mail : [email protected] Post Service MeSang Veang Village, Chi Phoch Commune, Me Sang District, Prey Veng Province. Contact Person : Mr. Sok Sopheak Branch Prey Veng Contact Phone : 015 697 173 / 012 835 259 Email : [email protected] Prampir Village, Kampong Leav Commune, Kampong Leav District, Sub Branch Preah Sdach Prey Veng Province. Prey Meas Village, Angkor Reach Commune, Contact Person : Mr. Path Reasmey Preah Sdach District, Prey Veng Province. Contact Phone : 015 697 152 / 012 519 152 Contact Person : Mr. Eang Kimsan Email : [email protected] Contact Phone : 015 697 189 / 012 395 892 Email : [email protected] Sub branch Svay Antor Pou Chendam Village, Svay Antor Commune, Service office Ta Huy Prey Veng District, Prey Veng Province. Ta Huy Village, Kampong Prasat Commune, Contact Person : Mrs. Em Sophal Peam Chor District, Prey Veng Province. Contact Phone : 012 773 285/ 085 59 86 56 Contact Person : Mr. Khim Taing Contact Phone : 015 697 189 / 092 549 707 Sub Branch Kam ChaI MeaR Email : [email protected] Chou Ti 3 Village, Kranhung Commune, Kam Chai Mear District, Prey Veng Provice. Sub Branch Kampong Trabaek Contact Person : Mr. Ros Chim Kampong Trabaek Village, Kampong Trabaek Contact Phone : 015 697 167 / 012 970 048 Commune, Kampong Trabaek District, Email : [email protected] Prey Veng Province. Contact Person : Mr. Khy Sean Service office Kanhchriech Contact Phone : 015 697 149 / 012 649 503 Prasrae Mukh Village, Kanhchriech Commune, Email : [email protected] Kanhchriech District, Prey Veng Province. Contact Person : Mr. Heng Toeurn Sub Branch Leuk Daek Contact Phone : 015 697 167 / 012 677 186 Kampong Chamlorng Village, Praek Tunloip Commune, Leuk Daek Districk, Kandal Province. Sub Branch Neak Loeang Contact Person : Mr. Hay BunSrean Buon Village, Preaek Khsay Kha Commune, Contact Phone : 015 697 138 / 012 286 400 Peam Ro District, Prey Veng Province. Email : [email protected] Contact Person : Mr. Sim Mongkul Contact Phone : 015 697 128 / 016 752 192 Email : [email protected]

55 Branch Svay Reing Service Office Chann Trei Chantrei Village, Chantrei Commune, Kien Sang Village, Svay Rieng Romeas Haek District, Svay Rieng Provice. Commune, Svay Rieng Town, Contact Person : Mr. Chhum Sokha Svay Rieng Province. Contact Phone : 015 697 214 / 012 322 080 Contact Person : Mr. Preap Hor Contact Phone : 015 697 262 / 012 739 716 Kampong Thom Branch Email : [email protected] Achar Leak Village, Achar Leak Commune, Steung Sen District, Sub Branch Kraol Kou Kampong Thom Province. Thlok Village, Kraol Kou Commune, Contact Person : Mr. Nhek Poly Svay Chrum District, Svay Rieng Province. Contact Phone : 015 698 591 / 012 766 846 Contact Person : Mr. Lim ChamRoen Email : [email protected] Contact Phone : 015 697 193 / 099 455 018

Service Office Sambo Service Office Svay Chrum Kampong Chheuteal Village, Sambo Commune, Tapor Village, Ta Suos Commune, Prasat Sambo District, Kampong Thum Province. Svay Chrum District, Svay Rieng Province. Contact Person : Mr. Than Sam Ath Contact Person : Mr. Chun Mahun Contact Phone : 015 698 862 / 012 307 067 Contact Phone : 015 697 193 / 099 466 640

Service Office Staung Sub Branch Chan Trea Chheuteal Village, Kampong Chen Tbong Commune, Kampout Chruk Village, Prey AngkunhCommune, Staung District, Kampong Thom Province. Bavet City, Svay Rieng Province. Contact Person : Mr. Hem Sok Hoeun Contact Person : Mr. Som Sotha Contact Phone : 015 698 862 / 012 406 486 Contact Phone : 015 697 212 / 011 633 145 Email : [email protected]

Service Office BroSot Sub Branch Kampong Thmar Sameakki Village, Svay Toea Commune, Prey Tatrav Village, Balang Commune, Svay Rieng City, Svay Rieng Province. Baray District, Kampong Thom Province. Contact Person : Mr. San Tito Contact Person : Mr. Chim Serey Contact Phone : 015 697 212 / 012 736 772 Contact Phone : 015 698 924 / 062 399 081 Email : [email protected] Service Office Kampong Rou Svay Anat Village, Nhor Commune, Service Office Krava Kampong Rou District, Svay Rieng Province. Slaket Village, Krava Commune, Baray District, Contact Person : Mr. Neang Chhorn Kampong Thom Province. Contact Phone : 015 697 212 / 012 533 698 Contact Person : Mr. Chhun Raksmey Contact Phone : 015 698 924 / 017 739 292 Sub Branch Romeas Haek Kampong Trach Village, Kampong Trach Commune, Sub Branch Rumlong Romeas Haek District, Svay Rieng Province. Sala Khum Village, Treal Commune, Contact Person : Mr. Nuth Theng Baray District, Kampong Thom Province. Contact Phone : 015 697 214 / 085 598 662 Contact Person : Mr. Touch Vimean Contact Phone : 015 698 931 / 012 482 398

56 Branch Kratie Sub Branch Stueng Trang Boeng Daeng Village,Preaek Kak Commune, Wat Village, Kratie Commune, Stueng Trang District, Kampong Cham Province. Kratie City, Contact Person : Mr. Dyna Ponnrak Kratie Province. Contact Phone : 015 697 304 / 023 305 012 Contact Person : Mr. Pel TaingEng Email : [email protected] Contact Phone : 015 698 668 / 012 661 636 Email : [email protected] Sub Branch Prey Chhor Slaeng Village, Chrey Vien Commune, Sub Branch Chhloung Prey Chhor District, Kampong Cham Province. Chrouy Thmor Village, Chhloung Commune, Contact Person : Mr. Khut Sophea Chhloung District, Kratie Province. Contact Phone : 015 697 321 / 023 351 391 Contact Person : Mr. Khuon Vannak Email : [email protected] Contact Phone : 015 698 690 / 099 455 400 Email : [email protected] Sub Branch Kaoh Soutin Daeum Sdau Village, Pongro Commune, Sub Branch Steung Treng Kaoh Soutin District, Kampong Cham Province. Thmor Leat Village, Sraoh Ruessey Commune, Contact Person : Mr. Chann Ratha Steung Treng District, Steung Treng City, Contact Phone : 015 698 129 / 023 358 478 Steung Treng Province. Email : [email protected] Contact Person : Mr. Ngen Sothy Contact Phone : 015 698 653 / 099 455 145 Service Office Sithor Kandal Email : [email protected] Preaek Sandaek Village, Preaek Changkran Commune, Sithor Kandal District, Prey Veng Province. Branch Kampong Cham Contact Person : Mr. Moa Naren Contact Phone : 015 698 129 / 012 259 930 Prampir Village, Kampong Cham Commune, Kampong Cham District, Sub Branch Cheung Prey Kampong Cham Province. Skon Village, Soutip Commune, Cheung Prey Contact Person : Mr. Lim Thy District, Kampong Cham Province. Contact Phone : 015 697 311 / 042 941 537 Contact Person : Mr. Eav Sophin Email : [email protected] Contact Phone : 015 697 336 / 011 901 186 Email : [email protected] Sub Branch Kampong Siem Prampir Village, Kampong Cham Commune, Kam- Sub Branch Batheay pong Cham District, Kampong Cham Province. Phaov Village, Phaov Commune, Contact Person : Mr. Leng Pengsean Batheay District, Kampong Cham Province. Contact Phone : 015 697 319 / 042 941 537 Contact Person : Mr. Rann Vannak Email : [email protected] Contact Phone : 015 697 345 / 012 448 667 Email : [email protected] Sub Branch Chamkar Leu Thnal Beak Village, Svay Teap Commune, Sevice Office Prey Kry Chamkar leu District, Kampong Cham Province. Prey Kry Village, Prey Kry Cheung Commune, Contact Person : Mr. Pin Nim Chol Kiri District, Kampong Chhnang Province. Contact Phone : 015 697 372 / 042 390 017 Contact Person : Mr. Rann Vannak Email : [email protected] Contact Phone : 015 697 345 / 012 448 667

57 Sub Branch Srey Santhor Service Office DamBae Santey Village, Prek Pou Commune, DamBae Village, DamBae Commune, Srey Santhor District, Kampong Cham Province. DamBae District, Kampong Cham Province. Contact Person : Mr. Chea Sophorn Contact Person : Mr. Kong Sokharith Contact Phone : 015 697 350 / 012 300 853 Contact Phone : 015 698 077 / 017 335 007 Email : [email protected] Sub Branch Memot Service Office Thlok Chrov Memot Village, Memot Commune, Memot District, Thlok Chrov Village, Khchau Commune, Kampong Cham Province. Kang Meas District, Kampong Cham Province. Contact Person : Mr. Tith Kamrong Contact Person : Mr. Heng Chanvirotha Contact Phone : 015 698 053 / 012 757 156 Contact Phone : 015 697 351 / 012 543 427 Email : [email protected]

Sub Branch Kang Meas Peam Chi Kang Village, Peam Chi Kang Commune, Branch Kampong Kang Meas District, Kampong Cham Province. Chhnang Contact Person : Mr. Heng Chanvirotha Contact Phone : 015 697 351 / 012 543 427 Tuol Kralanh Village, Kampong Chhnang Commune, Kampong Chhnang District, Kampong Chhang Province. Branch Tboung Khmum Contact Person : Mr. Sok Piseth Contact Phone : 015 697 925 / 026 988 719 Cheung Lang Village, Suong Email : [email protected] Commune, Tboung Khmum, Kampong Cham Province. Sub Branch Roleaphie Contact Person : Mr. Sok Theavy Tuol Kralanh Village, Kampong Chhnang Contact Phone : 015 698 013 / 042 390 013 Commune, Kampong Chhnang District, Email : [email protected] Kampong Chhang Province. Contact Person : Mr. Pa Muny Service Office Trapeang Ruessei Contact Phone : 015 697 924 / 092 606 638 Trapeang Ruessei Village, Roka Po Pram Commune, Tboung Khmum District, Kampong Cham Province. Service Office Tuek Phos Contact Person : Mr. Sarun Dara Srae Ta Chey Village.Akphivoadth Contact Phone : 015 698 030 / 092 223 952 Commune, Tuek Phos District, Kampong Chhnang Province. Sub Branch Ou Reang Ov Contact Person : Mr. Men Samnang Lekh Bei Village, Ampil Ta Pok Commune, Contact Phone : 015 697 924 / 012 597 154 Ou Reang Ov District, Kampong Cham Province. Contact Person : Mr. Chhay Vandet Service Office Kampong Leaeng Contact Phone : 015 698 084 / 012 781 861 Kampong Boeng Village, Kampong Hau Commune, Kampong Leaeng District, Sub Branch Ponhea Kraek Kampong Chhnang Province. Pou Srok Village, Kaong Kang Commune, Contact Person : Mr. Phal Sokchamreun Ponhea Kraek District, Kampong Cham Province. Contact Phone : 015 697 924 / 089 485 363 Contact Person : Mr. Phin Sary Contact Phone : 015 698 077 / 011 741 299 Email : [email protected]

58 Sub Branch Baribour service office Chheu Tom Ponley Village, Ponley Commune, Baribour District, Kapas Village, Chheu Tom Commune, Kampong Chhnang Province. Krakor District, Pursat Province. Contact Person : Mr. Ung Cheav Kong Contact Person : Mr. Seth Vichet Contact Phone : 015 697 828 / 012 558 660 Contact Phone : 015 698 838 / 012 589 363 Email : [email protected] Sub Branch Bakan Sub Branch Kampong Tralach Boeng Khnar Village, Boeng Khnar Commune, Daeum Popel Village, Thma Edth Bakan District, Pursat Province. Commune, Kampong Tralach District, Contact Person : Mr. Lem Sina Kampong Chhnang Province. Contact Phone : 015 698 834 / 012 385 065 Contact Person : Mr. Heng Sovanna Email : [email protected] Contact Phone : 015 697 928 / 092 576 474 Email : [email protected] Service Office Autapoang Ou Ta Paong Village, Autapong Commune, Branch Pursat Bakan District, Pursat Province. Contact Person : Mr. Kol Chamnab Thnal Bambaek Village, Roleab Contact Phone : 015 698 834 / 092 976 509 Commune, Sampov Meas District, Pursat Province. Sub Branch Moang Rusey Contact Person : Mr. Neang Sinarann Kansai Banteay Village, Moung Commune, Contact Phone : 015 698 806 / 012 867 602 Moung Russie District, Battombong Province. Email : [email protected] Contact Person : Mr. Mom Rithy Contact Phone : 015 698 857 / 017 558 485 Sub Branch Sam Pao Meas Email : [email protected] Thnal Bambeaek Village, Roleab Commune, Sampov Meas District, Pursat Province. Service office Koas Kror Lor Contact Person : Mr. Khlaing Sunhong Toulbalaing Village, Koas Krolor Commune, Contact Phone : 015 698 809 / 012 545 928 Koas Krolor District, Battambang Province. Email : [email protected] Contact Person : Mr. Aoeun Saroeub Contact Phone : 015 698 857 / 012 285 673 Service office Kandieng Boeng Kranh Village, Svay Luong Commune, Sub Branch Phnom Kravanh Kandieng District, Pursat Province. Kroch Chrar Village, Leach Commune, Contact Person : Mr. Long Punleu Phnom Kravanh District, Pursat Province. Contact Phone : 015 698 809 / 092 956 936 Contact Person : Mr. Houn Soaret Email : [email protected] Contact Phone : 015 698 830 / 092 282 616

Sub Branch Krakor Service office Ta Lor Phsar Village, Anlong Tnaot Commune, Ta Lor Village, Ta Lor Commune, Krakor District, Pursat Province. Bakan District, Pursat Province. Contact Person : Mr. In ChanChulsa Contact Person : Mr. Phang Sereivathnak Contact Phone : 015 698 838 / 012 777 659 Contact Phone : 015 698 830 / 092 688 283 Email : [email protected]

59 Branch Banteay Sub Branch Poi Pet MeanChey Kbal Spean Village, Sangkat Poipet, Poipet City, Banteay Meanchey Province. Contact Person : Mr. Tep Sokheng Ou Ambel Village, Ou Ambel Contact Phone : 015 698 170 / 012 338 836 Commune, Serei Sophorn District, Email : [email protected] Banteay Meanchey Province. Contact Person : Mr. thay socheat Contact Phone : 015 697 886 / 012 677 843 Email : [email protected] Branch BattamBang Sub Branch Sereisophorn Aukhcheay Village, PrekPreahSdach Ou Ambel Village, Ou Ambel Commune, Commune, Battambang District, Serei Sophorn District, Banteay Meanchey Province. Battambang Province. Contact Person : Mr. Pol Vuthyrirth Contact Person : Mr. Ouk Ry Contact Phone : 015 698 130 / 012 792 725 Contact Phone : 015 698 486 / 012 993 387 Email : [email protected] Email : [email protected]

Sub Branch Thmor Pourk Sub Branch Bavel Kumru Village, Kumru Commune, Thmar Puok Spean Kandal Village, Bavel Commune, District, Banteay Meanchey Province. Bavel District, Battambang Province. Contact Person : Mr. Morn sinsarin Vichet Contact Person : Mr. Soan Seth Contact Phone : 015 698 182 / 012 403 093 Contact Phone : 015 698 643 / 092 273 893

Service Office Svay Chek Service Office Thmor Korl Rolous Village, Rolous Commune, Svay Chek Koktrab Village, Tameun commune, District, Banteay Meanchey Province. Tmor Korl District, Battambang Province. Contact Person : Mr. Phauk Vina Contact Person : Mr. Viech Kimsan Contact Phone : 015 698 182 / 092 786 282 Contact Phone : 015 698 643 / 092 976 520

Sub Branch Praoh Netpraoh Service Office Sam Pov Loun Chub Village, Chub Vary Commune, PraohNet Preah Trapaing Bralit Village, Santepheap Commune, District, Banteay Meanchey Province. SamPov Loun District, Battambang Province. Contact Person : Mr. Nhem Retha Contact Person : Mr.Khut Kisaing Contact Phone : 015 698 134 / 012 239 455 Contact Phone : 015 698 643 / 092 973 727 Email : [email protected] Sub Branch Banon Snoeung Service office Phnom Srok Boeng Village, Snoeung Commune, Banon District, Sraoh Chik Village, Sraoh Chik Commune, Battambang Province. Phnom Sruk District, Banteay Meanchey Province. Contact Person : Mr. Phlay Tola Contact Person : Mr. Preah Hokly Contact Phone : 015 698 641 / 012 469 080 Contact Phone : 015 698 134 / 092 976 276

60 Branch Siem Reap

Vihea Chen Village, Sangkat Svay Dang Kum, Krong Siem Reap, Siem Reap Province. Contact Person : Mr. Tea Vanna Contact Phone : 015 698 991 / 012 992 006 Email : [email protected]

Sub Branch Siem Reap Vihea Chen Village, Sangkat Svay Dang Kum, Krong Siem Reap, Siem Reap Province. Contact Person : Mr. Path Sokha Contact Phone : 015 698 939 / 017 976 780

Sub Branch Dam Dek Dam Dek Thmey Village, Dam Dek Commune, Soutr Nikum District, Siem Reap Province. Contact Person : Mr. Seung Sathya Contact Phone : 015 698 957 / 012 360 230

Service Office Chi Kraeng Kampong Kdey 2 Village, Kampong Kdey Commune, Chi Kraeng District, Siem Reap Province. Contact Person : Mr. Meas Sitha Contact Phone : 015 698 957 / 012 562 041

Sub Branch Kralanh Kampong Thkuv 2 Village, Kampong Thkuv Com- mune, Kralanh District, Siem Reap Province. Contact Person : Mr.Pek Bunratna Contact Phone : 015 698 994 / 012 318 481 Email : [email protected]

Service Office Srey Snam Chroy Neangnoun Village, Chroy Neangnoun Commune, Srey Snum District, Seam Reab Province. Head Office Contact Person : Mr. Mao Rath Nº25, St 294& 57, Boeung Kengkang1, Contact Phone : 015 698 994 / 092 631 264 Chamkarmon, Phnom Penh, Cambodia P.O.Box : 2412 Tel : +855 23 220 102 : +855 23 213 642 Fax : +855 23 216 362 Email : [email protected] Website : www.prasac.com.kh

61 OUTREACH HIGHLIGHTS WITH OPERATIONAL MAP

December 31, 2009

Coverage Branch Network Provinces : 17 Branches : 18 Districts : 131 Sub Branches : 84 Communes : 1,256 Service Offices : 32 Villages : 8,098 Borrowers : 87,945 Staffs : 1,246 Total Assets : KHR 295B Outstanding : KHR 267B

62 www.prasac.com.kh Annual Report 2009 Annual Report

PRASAC MICROFINANCE INSTITUTION LIMITED Head Office: Address: Nº 25, St 294& 57, Boeung Kengkang1, Chamkarmon, Phnom Penh, Cambodia P.O.Box: 2412 | Tel: (855) 23 220 102/ 213 642 | Fax: (855) 23 216 362 | Email: [email protected]