Year of Microfinance in Cambodia

YEAR OF MICROFINANCE IN CAMBODIA

YEARANNUAL OF MICROFINANCEREPORT 2006 IN CAMBODIA

MISSION AND VISION

TO CONTRIBUTE TO SUSTAINABLE RURAL ECONOMIC DEVELOPMENT IN ORDER TO IMPROVE THE LIVING STANDARDS OF THE RURAL PEOPLE THROUGH CREATION OF SUSTAINABLE ACCESS TO FINANCIAL SERVICES FOR RURAL COMMUNITIES AND MICRO-ENTERPRISES. Performance Trends

Trends 2004 PRASAC  2006

Key Performance Trends Number of Active Borrowers 35% Gross Loan Portfolio 30% 25% Debt/ Equity Ratio 20% 15% Return on Assets 10% Financial Revenue Ratio 5% 0% Total Expense Ratio 2004 2005 2006 Financial Expense Ratio Operating Expense/ Loan Portfolio Loan Loss Provision Expense Ratio Operating Expense Ratio Borrowers per Staﬀ Member Financial Revenue Ratio Portfolio at Risk > 30 Days

Microﬁ nance Information eXchange (MIX) Background P.6 Business objective P.7 Our Challenges P.7 ABOUT Financial Products and Services P.8 PRASAC’s Client P.9 Shareholders and PRASAC Alliance P.9 Organizational Chart P.10 Year of Microﬁ nance MFI of Cambodia 2006 P.12 PRASAC BACKGROUND

The PRASAC (Programme de Rehabilitation et d’Appui au Secteur Agricole du Cambodge) project started in 1995 as a support program for the agricultural sector in Cambodia, covering six provinces around Phnom Penh. The ﬁ rst phase of PRASAC was implemented during the period 01/01/95-30/04/99. The second phase of the project, PRASAC, commenced on 01/05/99 and was completed on 31/12/03. Both program phases were funded by the European Commission (EC) under the Financing Agreement N° KHM/B7-3000/IB/98/0181.

PRASAC had agricultural, rural infrastructure, community development, institutional strengthening, and credit and micro- enterprise components. The implementing agencies on behalf of the Royal Government of Cambodia (RGC) were the Ministry of Rural Development (domestic water supply, community development), the Ministry of Agriculture, Fisheries and Forestry (sustainable agricultural productivity), the Ministry of Water Resources and Meteorology (irrigation schemes), and the Rural Development Bank (credit facility).

PRASAC programme was formally closed in December 2003. However, the Financing Agreement (FA) between the EC and the RGC remained valid until end of December 2004. To achieve sustainability beyond the closure of PRASAC, the credit component started in 2001 with gradual transformation into a semi-independent microﬁ nance operator under the name PRASAC Credit Association (PCA), registered by the NBC as a Rural Credit Operator. In August 2004, a new limited liability company PRASAC MFI Ltd was registered with the MoC (Certiﬁ cate No.: 1126 issued on 12.8.04). It has two shareholders- CRDF (a NGO registered with the MoI) and Staff Company Ltd. PRASAC MFI LTD received its MFI license from the National Bank of Cambodia in November 2004. The operations, assets and liabilities of PCA were with effect per 1.1.2005 permanently and irrevocably transferred to PRASAC MFI Ltd with a MoU between the EC and the RGC, co- signed by PRASAC MFI Ltd. With another MoU regarding the Funds (seed funds and retained earnings) the ownership has as per 1.1.2005 been transferred from the EC to the RGC. A condition for the transfer is that the funds are made available for PRASAC MFI Ltd as perpetual subordinated credit facilitating ongoing operations and sustained access to credit for the rural poor.

A separate Subordinated Debt Agreement between the RGC and PRASAC MFI Ltd was signed with effect from 1.1.2005.

6 PRASAC Annual Report 06 www.prasac.com.kh Business Objective The business objectives of PRASAC MFI Ltd are to carry out activities of a micro-ﬁ nance institution, by providing ﬁ nancial services such as credit services (group loans and individual loans) and savings (savings and time deposit) services to rural communities, households and small and medium size enterprises. The objectives shall be achieved by strict adherence of high professional and moral standards, transparency and good governance.

Our Challenges

To be a leading MFI in Cambodia offering ﬁ nancial services 1 to the rural community and micro enterprises under high professional and moral standards, implementing transparency and good governance in all operational levels in a sustainable manner.

To diversify loan portfolio and review ﬁ nancial products 2 and services to be competitive and suit clients’ demands.

To build trust and conﬁ dence among all stakeholders such 3 as customers, staff, shareholders and regulatory body.

To mobilize institutional/strategic shareholders who 4 have banking expertise and share common mission with PRASAC MFI.

To avoid mission drift and to maintain status as non- 5 proﬁ t organization that reinvests earnings for the expansion of outreach and the improvement of products and services.

PRASAC Annual Report 06 7 FINANCIAL PRODUCTS & SERVICES

LOCAL CURRENCY LOANS (KHR)

Group loans Us dollar currency loans:

The target clientele for character-based group lending are rural PRASAC introduced new loan products, US Dollar currency people, particularly the poor villagers who lack access to formal loans to the market in July 2005. It offers a convenient credit fi nancial services and need capital for income generating facility to SME’s already using dollar currency for their business activities. To do so, group loan delivery mechanism is used transactions and having cash fl ow in US Dollar. The loan size where villagers organize themselves into solidarity groups and term and repayment mode are the same as local currency which consist of 3 to 8 members from different households. loans (Khmer Riel). The clients can borrow amounts ranging from KHR 50,000 to 500,000 within 4-12 months loan period. PRASAC charges Deposits: acceptable interest p.a. from its clients on declining balance. Based on its vision and mission, PRASAC created new fi nancial services, i.e. savings, now clients can deposit in both local and Individual loans US dollar currency. There are two types of product such as time The target clientele for individual business loans are micro deposits and savings. entrepreneurs operating their business in the rural economy. They are producing (or offering services) for cash in rural or Savings: semi-urban markets. However, they may also produce to a Clients can open their savings account both in riel and dollar. minor extent for their own consumption or barter trade in Clients can open the first savings account with minimum the semi-subsistence rural economy. The clients can borrow amount, USD 5 or KHR 20,000. amounts ranging from KHR 300,000 to 40,000,000 within 4-24 months loan period. Time deposits: There are three time deposits: three months, six months, and twelve months. The minimum amuont is USD 25 or KHR 100,000. SHAREHOLDERS AND ALLIANCE PRASAC’S CLIENTS The share capital of PRASAC MFI is 250 Million KHR (about 61,000 USD) fully paid in by its incorporators. PS Co (PRASAC Staff Company Ltd) has paid in 5% and CRDF (Cambodia Rural Development Foundation) 95% of the share capital.

Rural Community According to ‘Prakas No B 700-06 on Licensing of Micro- Our clients are village households with repayment Finance Institutions’ the applicant must be incorporated as a capacity that constitute up to 90% of all households limited liability company (or a cooperative) with a minimum located in rural areas where bad roads and absence of registered capital of 250 million KHR. For that purpose initial facilities and utilities prevail. The majority of the clients incorporators had to be identifi ed to incorporate a company. are involved in rice production and farming. At least Therefore, PRASAC project created a temporary legal entity, one person of such household is working in the semi- an NGO called CRDF, which got its funds from the project subsistence village economy by employing some productive budget. Together with PS Co CRDF incorporated PRASAC MFI assets of the household, such as land, tools, livestock Ltd in August 2004, and it received its Microfi nance license in and so forth. Cash income is mainly generated from the November 2005 PRASAC MFI Ltd is now one of the biggest sale of access rice or other food items (i.e. food what is fully licensed MFIs in Cambodia; having a governing structure not consumed by the household), but also from trading with a Supervising Board appointed by the shareholders or service activities. assembly, an Executive Board and professional staff; an audited track record of continuous profi table operations since 2001 Micro Entrepreneur and 100% funding through subsidised and commercial loans. Thereby, shares in PRASAC MFI Ltd have a commercial value Apart of rural people who generate income from and will be attractive for investors. rice production as well as from farming PRASAC also targeting to micro-enterprises that produce (or offer services) predominantly to the market. The large majority of them are sole proprietorships where family members help out in the running of the business. They are mainly located in market centres that are located in or nearby district, provincial centre, and few in the villages. They have few employees and they are normally family members.

PRASAC Annual Report 06 9 PRASAC ORGANIZATION CHART

Internal Audit Department

HR Department Operations Department

Personnel Unit Credit Unit

Training Unit Marketing Unit

Branch Office Branch Office Branch Office Branch Office Branch Office Branch Office Bran

Sub Branch Office Sub Branch Office

MB Teller MB Teller

Cashier Cashier

CO & BDO CO & BDO

Driver Guard Cleaner Guard

Service office Service office

10 PRASAC Annual Report 06 Shareholder Assembly

Supervising Board

General Director

Finance Department Administration Department

Accounting & Treasury Unit Logistic Unit

IT & MIS Unit Support Staff

MB Support Unit

ch Office Branch Office Branch Office Branch Office Branch Office Branch Office Branch Office

Sub Branch Office TOTAL SUMMARY OF STAFFING DECEMBER 2006 1. Executive Board of Directors 5 General Director 1 Directors Department 4 MB Teller 2. HO Managers and Branch Managers 25 HO Senior Managers 13 Branch Managers 12 3. Middle Managers 67 HO Middle Managers 23 Cashier Sub Branch Managers 44 4. Field Staff 329 SBM Trainee 2 CO 318 BDR 9 5. Support Staff 184 CO & BDO MB Teller 34 MB Teller Trainee 7 Cashier 50 Receptionist 1 Driver 15 Guard 64 Guard Cleaner 10 COT and CT 1 Lawyer 1 Boat Driver 1

Service office TOTAL 610

PRASAC Annual Report 06 11 to be license as MFIs is not to National Bank of Cambodia (NBC). The main objective of regulating MFIs is not to restrict their activities but to promote them. Licensing is required for MFI to collect savings from their members and from the public, acquire long term borrowing from YEAR OF foreign and local organizations and employ these funds to provide MICROFINANCE loans in rural areas. An MFI must be registered and incorporated as a legal entity such as OF CAMBODIA, 2006 a company, cooperative or have a legal status according to the law. An MFI must obtain a license from NBC upon application with the required documents.

With microfi nance, the NBC is confronted with confl icting targets. On The Kingdom of Cambodia is a democratic monarchy with multi-political the one hand, microfi nance, as with all other fi nancial activities, must parties and a population of 13.8 millions, among which 85% live in rural be regulated to avoid incompetence, and some case dishonesty, which areas. Females represent 53% of the total population. The majority of can undermine the system. On the other hand, if regulation is too harsh, the people are Buddhists. Recent economic development has gone and in particular if the capital requirement is too high, microfi nance through three distinct periods: emerging from scratch, Asian fi nancial might exhibit the same behavior as banks, fl ee from rural areas crisis and internal confl ict and peace and security. During the last period and concentrate their activities in major cities. Therefore, the NBC has Cambodia has made good progress. released a set of regulations according the size of MFIs.

The Cambodia banking system started in the early 1990s when the For the fi rst time 2000, the NBC issued regulations on the classifi cation government launched the economic reform program from a centrally of MFIs, classifying all MFIs into three categories according to the planned to a free market economy. Reform program have been intro- level of their operation with different criteria for being licensed and duce and good progress has been achieved in regulating and supervising registered. The obstacle preventing NGOs from being transformed banks and micro fi nance institutions. into MFIs is ownership. In the beginning, it was diffi cult to identify the shareholder because funds used by NGOs to operate microfi nance had Most rural fi nancial operators in Cambodia have been transformed from been granted by international donors. But at the end staff association non-government organizations (NGOs) that were involved with human- had been established as the owner of those funds, opening the way for itarian work amongst refugees in the Thai border. After Paris Peace NGOs to transform into MFIs. Accord in October 1991, the refugees had returned home. The biggest of MFIs must be licensed by the NBC. The regulations With the passage of time, NGOs have redefi ned their roles in terms of to be complied with by them are very similar to those to be complied interventions in the microfi nance development process. NGOs have by the commercial banks, except the minimum capital required is been involved in virtually every sector of the economy including micro substantially lower. The medium-sized MFIs must only be registered by credit programs and savings. Microcredit is the most active service due the NBC and are subjected to lighter regulations and in particular to banking services of commercial banks being limited in urban areas, reports to be sent to the NBC are simplifi ed. The smallest MSIs can and rural people are unable to receive such services, especially loans operate freely with no requirement to be regulated and supervised due from the banks. Main practical rural fi nancial services are individual to high operating costs. loans, group loans and savings from members. The regulations issued by the NBC include criteria for licensing and In response to the huge need for microfi nance services, many Micro- registration, minimum capital requirement, solvency ratio liquidity ratio, fi nannce Institutions (MFIs) have engaged in providing these kinds uniform chart of accounts, reporting requirements, and interest calcula- of services. In 2006, Cambodian microfi nance has grown remarkably. tion. These regulations are consistent with the scope of work of MFIs This growth signifi cantly contributes to economic development and and support them in expending their activities in an appropriate manner. poverty alleviation. With its credit and savings services, MFIs help people, especially the poor to relieve their family burdens and improve their In terms of supervision and regulation, the NBC is responsible for livelihood to some extent. Currently there are 17 licensed microfi nance maintaining integrity and a sound banking and fi nancial system in institutions, 26-registered rural credit operators and around 60 NGOs order to encourage public confi dence, to protect depositors from freely operating in the whole country. fraud and encourage good governance. To do this, a compete set of criteria have been issued such as licensing and registration procedures, The Royal Government of Cambodia has committed to the development minimum capital requirement, solvency ratio, liquidity ratio, uniform of rural fi nance since it is a key ingredient for sustainable economic chart of accounts, reporting requirement etc. and furthermore, the development, particularly rural development, and for alleviation of NBC also conducts off-site and on-site supervision on a regular basis poverty. In addition, the government has announced 2006 as a year of in order to ensure that all MFIs are operating in a professional and microfi nance of Cambodia and it always supports the development of prudential manners. this sector through the introduction of policies and creates a favorable environment for further growth. The fi nancial sector, both banking and rural fi nance, is a major element of the fi nancial system of the country and sound supervision and The government is also considering giving priority to the agricultural regulation of banks and fi nancial institution is essential. Attention must sector development in order to improve people’s living standard and to be paid mot only to banks but also other components of the fi nancial reduce poverty. Today, the government is putting even more effort into system such as rural fi nancial institution providing funds for small and building up an adequate legal framework, infrastructure, and investment micro enterprises. In order to create a conductive rural fi nance policy incentives for the agro-industrial sector, farmers training in theory, environment, governments need to understand core fi nancial sector practice, and technology transfer. stability issues and be aware of different response options.

To implement law on banking and fi nancial institutions and improve fi nancial services in rural areas, NGO suppliers of fi nancial services need Sources: Microfi nance of Cambodia, National Bank of Cambodia

12 PRASAC Annual Report 06 REPORT HIGHLIGHT

PRASAC Annual Report 06 13

PRASAC MFI LTD Financial Statements for the Year Ended 31 December 2006

Statement of the Supervising Board P.16 Independent Auditor’s Report P.19 Balance Sheet P.21 FINANCIAL Statement of changes in shareholder’s equity P.22 Income Statement P.23 Cash fl ow statement P.24 REPORT Note to the Financial Statements P.25 PRASAC MFI Offi ce Network P.44 STATEMENT OF THE The Supervising Board (“SB”) submits its report and the audited BOARD fi nancial statements of PRASAC MFI Ltd. (“PRASAC”) for the year ended 31 December 2006.

PRASAC MFI Ltd. PRINCIPAL ACTIVITY PRASAC is engaged primarily in the provision of microfi nance services to the rural population of Cambodia PRASAC, a licensed micro-fi nance institution, was incor- through its headquarters in Phnom Penh and various porated in Cambodia and registered with the Ministry of provincial offi ces in the Kingdom of Cambodia. Commerce as a private limited liability company under register number Co-6931/04P dated 12 August 2004. Its RESULTS OF OPERATION AND DIVIDEND activities are an offshoot of the PRASAC Credit Component which was managed by and funded by the European The financial performances for the year ended 31 Union (EU). PRASAC was initially established in 1995 December 2006 are set out in the statement of income as a support program for the agriculture sector in on page 9. Cambodia, covering six provinces around Phnom Penh In April 2006, dividend amounting to Riel 25,000,000 which was an integrated projected. was declared and paid from PRASAC’s net income for the year ended 31 December 2005. PRASAC was established based on the asset transfer document dated 31 December 2004, whereby the net SHARE CAPITAL assets of PRASAC Credit Component was transferred to PRASAC as subordinated debt, as discussed in note 18 to During the year ended 31 December 2006, there have these fi nancial statements. been no changes in registered and paid up share capital of PRASAC.

PRASAC obtained its license from the Central Bank (the National Bank of Cambodia (“NBC”)) to conduct business RESERVES AND PROVISIONS as a micro-fi nance institution in the Kingdom of Cambodia There were no material movements to or from reserves as set out in Central Bank’s register No. 10 dated 15 and provisions during the year under review. November 2004. The license will expire on 1 December 2007. PRASAC is going to apply for the renewal of its BAD AND DOUBTFUL LOANS indefinite period of license from National Bank of Before the fi nancial statements of PRASAC were drawn up, Cambodia. Management expected to obtain the renewal the SB took reasonable steps to ascertain that appropriate license in 2007. action had been taken in relation to the writing off of bad loans and the making of provision for bad and doubtful loans. They satisfi ed themselves that all known bad loans had been written off and that adequate provisions have been made for bad and doubtful loans.

16 PRASAC Annual Report 06 SUPERVISING

At the date of this report, the SB is not aware of any circum- No contingent or other liability of PRASAC has become enforce- stances of bad and doubtful loans in the ﬁ nancial statements able, or is likely to become enforceable within the period of of PRASAC. twelve months after the end of the year which, in the opinion of the SB, will or may have a material effect on the ability of PRASAC to meet its obligations as and when they fall due. CURRENT ASSETS

Before the fi nancial statements of PRASAC were drawn up, CHANGE OF CIRCUMSTANCES the SB took reasonable steps to ensure that any current assets, other than loans which were unlikely to be realized in the At the date of this report, the SB is not aware of any circum- ordinary course of business at their value as shown in the stances, not otherwise dealt with in this report or the fi nancial accounting records of PRASAC, have been written down to an statements of PRASAC, which would render any amount stated amount which they might be expected to realize. in the fi nancial statements misleading in any material respect.

At the date of this report, the SB is not aware of any circum- ITEMS OF AN UNUSUAL NATURE stances which would render the values attributed to the current assets in the ﬁ nancial statements of PRASAC misleading in any The results of the operations of PRASAC for the year ended 31 material respect. December 2006 were not, in the opinion of the SB, materially affected by any items, transactions or events of a material and unusual nature. VALUATION METHODS

At the date of this report, the SB is not aware of any circum- There has not arisen in the interval between the end of the year stances that have arisen which would render adherence to and the date of this report any item, transaction or event of a the existing method of valuation of assets and liabilities in the material and unusual nature likely, in the opinion of the SB, to ﬁ nancial statements of PRASAC misleading or inappropriate in substantially affect the results of the operations of PRASAC for any material respect. the current year in which this report is made.

CONTINGENT AND OTHER LIABILITIES DIRECTORS

At the date of this report, there does not exist: The members of Supervising Board holding the ofﬁ ce during the year and as at the date of this report are: (a) any charge on the assets of PRASAC which has arisen since the end of the year which secures the liabilities of any 1. Mr. Chea Hang (Chairman) other person, or 2. Mr. Oum Sam Oeun (Member) 3. Dieter Trenker (Member) (b) any contingent liability in respect of PRASAC that has arisen since the end of the year other than in the ordinary course of All members are non executive board members. banking business.

PRASAC Annual Report 06 17 DIRECTOR’S INTERESTS RESPONSIBILITIES OF THE SB IN RESPECT OF THE FINANCIAL STATEMENTS The interests of directors in shares of PRASAC during the year and at the date of this report are as follow: The SB is responsible for ensuring that the fi nancial statements are properly drawn up so as to give a true and fair view of the fi nancial position of PRASAC as at 31 December 2006, and SHARE- REPRESENTED NUMBER of the results of its operations and its cash fl ows for the year HOLDING HOLDERS BY OF SHARES then ended. In preparing these fi nancial statements, the SB is of Riel required to: % 200,000 each i) adopt appropriate accounting policies which are supported Cambodia Rural Development Mr. by reasonable and prudent judgments and estimates and then 95 11,875 Foundations Chea Hang apply them consistently; (CRDF) ii) comply with guidelines issued by the National Bank of Cam- Prasac Staff Mr. Company Ltd. 5 625 bodia and Cambodian Accounting Standards or, if there has (PS Co., Ltd) Oum Sam Oeun been any departure in the interests of true and fair presentation, 100 12,500 ensure this has been appropriately disclosed, explained and quantifi ed in the fi nancial statements;

iii) maintain adequate accounting records and an effective DIRECTORS’ BENEFITS system of internal controls; During and at the end of the year, no arrangement existed, iv) prepare the fi nancial statements on a going concern basis to which PRASAC was a party, with the object of enabling unless it is inappropriate to assume that PRASAC will continue directors of PRASAC to acquire benefi ts by means of the operations in the foreseeable future; acquisition of shares in or debentures of PRASAC or any other body corporate; and v) set overall policies for PRASAC, ratify all decisions and actions by the SB that have a material effect on the opera- No director of PRASAC has received or become entitled to receive tions and performance of PRASAC, and ensure they have been any benefi t by reason of a contract made by PRASAC or with a properly refl ected in the fi nancial statements. fi rm which the director is a member, or with a company which the director has a material fi nancial interest. The SB confi rms that PRASAC has complied with these requirements in preparing the fi nancial statements.

On behalf of the SB,

Name: Chea Hang Position: Chairman Date: INDEPENDENT AUDITOR’S To the Shareholders of PRASAC REPORT Microﬁ nance Institition Ltd.

We have audited the accompanying fi nancial statements Auditor’s Responsibility of PRASAC Microfi nance Institution Ltd. (“PRASAC”) which Our responsibility is to express an opinion on these fi nancial comprise the balance sheet as of 31 December 2006 and statements based on our audit. We conducted our audit the income statement, statement of changes in shareholders’ in accordance with International Standards on Auditing. equity and cash fl ow statement for the year then ended Those Standards require that we comply with ethical and a summary of signifi cant accounting policies and other requirements and plan and perform the audit to obtain explanatory notes on pages 7 to 41. reasonable assurance wether the financial statements are free from material misstatement. Management’s Responsibility for the Financial Statements An audit involves performing procedures to obtain audit Management is responsible for the preparation and fair presen- evidence about the amounts and disclosure in the fi nancial tation of these fi nancial statements in accordance with guide- statements. The procedures selected depend on the auditor’s line issued by the National Bank of Cambodia and Cambodian judgment, including the assessment of the risks of material Accounting Standard. This responsibility includes: designing, misstatement of the fi nancial statements, wether due to fraud implementing and maintaining internal control relevant to the or error. In making those risk assessments, the auditor considers preperation and fair presentation of fi nancial statements that internal controls relevant to the entity’s preparation and fair are free from material misstatement, whether due to fraud or persentation of the fi nancial statements in order to design audit error; selecting and applying appropriate accounting policies; procedures that are appropriate in the circumstances, but not and making accounting estimates that are reasonable in the for the purpose of expressing an opinion on the effectiveness circumstances. of the entity’s internal control. An audit also includes evaluating the appopriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements.

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

PRASAC Annual Report 06 19

BALANCE SHEET AS AT 31 DECEMBER 2006

31 December 31 December 2006 2005 Note Riel ’000 Riel ’000

ASSETS Cash in hand 4 1,684,879 2,485,100 Balances with banks 5 8,427,747 2,361,573 Balances with Central Bank 6 1,299,284 100,883 Loans and advances to customers 7 87,888,912 44,548,983 Other assets 8 5,004,525 1,963,921 Deferred tax assets 9 130,679 136,680 Property and equipment 10 1,537,305 766,628

TOTAL ASSETS 105,973,331 52,363,768

LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Customers’ deposits 11 976,672 1,577,271 Borrowings 12 49,400,634 10,936,550 Provision for retirement and severance beneﬁ t obligation 13 877,536 270,450 Current income tax liabilities 14 551,083 631,999 Accruals and other liabilities 15 2,443,540 1,554,032 Share subscription received in advance 16 11,640,460 0 Total Liabilities 65,889,925 14,970,302

SHAREHOLDERS’ EQUITY Share capital 17 250,000 250,000 Subordinated debt 18 34,674,673 34,674,673 Retained earnings 5,158,733 2,468,793 Total Shareholders’ Equity 40,083,406 37,393,466

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 105,973,331 52,363,768

Name: SIM Senacheert Name: UTH Soeurng Position: General Manager Position: Finance Manager Date: 30 August 2007 Date: 30 August 2007

The accompanying notes on pages 11 to 41 form an integral part of these ﬁ nancial statements. PRASAC Annual Report 06 21 STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2006

Share Capital Subordinated Debt Retained Earning Total

Riel ‘000 Riel ’000 Riel ’000 Riel ‘000

Balance at 31 December 2005 –––– Issue Of share capital 250,000 250,000 during the year

Subordinated Debt – 34,674,673 34,674,673 Net income for the year – – 2,468,793 2,468,793

Balance at 31 December 2005 250,000 34,674,673 2,468,793 37,393,466

Balance at 1 January 2006 250,000 34,674,673 2,468,793 37,393,466 Net income for the year – – 2,714,940 2,714,940 Dividend – – (25,000) (25,000)

Balance at 31 December 2006 250,000 34,674,673 5,158,733 40,083,406

See recent developments for changes in registered and paid up share capital in note 17.

Date: 30 August 2007

Name: SIM Senacheert Name: UTH Soeurng Position: General Manager Position: Finance Manager

The accompanying notes on pages 11 to 41 form an integral part of these ﬁ nancial statements.

22 PRASAC Annual Report 06 INCOME STATEMENT FOR YEAR ENDED 31 DECEMBER 2006

31 December 31 December 2006 2005 Note Riel ’000 Riel ’000

Interest income 20 21,045,384 13,322,905 Interest and fee expense 21 (2,388,652) (351,715)

Net interest income 18,656,732 12,971,190

Fee and commission expense 22 (438,925) (142,603) Other operating income 23 335,024 100,169 (103,901) (42,434)

Operating income 18,552,831 12,928,756

Provision for bad and doubtful loans, net 24 190,757 68,627 Operating and other expenses 25 (15,380,073) (9,964,530) (15,189,316) (9,895,903)

Grant income 26 40,790 53,138

Income before income tax 3,404,305 3,085,991

Income tax expense 27 (689,365) (617,198)

NET INCOME FOR THE YEAR 2,714,940 2,468,793

Date: 30 August 2007

Name: SIM Senacheert Name: UTH Soeurng Position: General Manager Position: Finance Manager

The accompanying notes on pages 11 to 41 form an integral part of these ﬁ nancial statements.

PRASAC Annual Report 06 23 CASH FLOW STATEMENT FOR YEAR ENDED 31 DECEMBER 2006

31 December 31 December 2006 2005 Note Riel ’000 Riel ’000

Cash ﬂ ows from operating activities

Income before income tax 3,404,305 3,085,991 Adjustments for: Net movement in provision for retirement & severance pay beneﬁ t 607,086 136,452 Depreciation 10 352,113 216,280 Provision for bad and doubtful loans 7 231,891 158,733 Loss on disposal of property & Equipment 4,835 7,141 Operating income before changes in operating assets and liabilities 4,600,230 3,604,597 Changes in operating assets and liabilities: Loans and advances to customers (43,571,820) (13,258,226) Other assets (3,040,604) (276,349) Customers’ deposits (600,599) 785,238 Accruals and other liabilities 889,508 847,762 Net cash used in operations (41,723,285) (8,296,978)

Income taxes paid (764,281) (121,878) Net cash used in operating activities (42,487,566) (8,418,856)

Cash ﬂ ows from investing activities Purchase of property and equipment 10 (1,127,624) (733,142) Statutory deposit with Central Bank (462,810) (82,110) Net cash used in investing activities (1,590,434) (815,252)

Cash ﬂ ow from ﬁ nancing activities

Issue of share capital – 250,000 Dividends paid (25,000) – Proceeds from borrowings 38,464,084 10,936,550 Share subscription received in advance 11,640,460 – Net cash generated from ﬁ nancing activities 50,079,544 11,186,550

Net increase in cash and cash equivalents 6,001,544 1,952,442

Cash and cash equivalents at beginning of year 4,865,446 2,913,004

Cash and cash equivalents at end of Year 19 10,866,990 4,865,446

Name: SIM Senacheert Name: UTH Soeurng Position: General Manager Position: Finance Manager Date: 30 August 2007 Date: 30 August 2007

The accompanying notes on pages 11 to 41 form an integral part of these ﬁ nancial statements. 24 PRASAC Annual Report 06 NOTE TO THE FINANCIAL STATEMENT FOR YEAR ENDED 31 DECEMBER 2006

1. BACKGROUND INFORMATION required, therefore, the changes in share capital have not yet refl ected in the 2006 fi nancial statements.] (Note 16 and 17). PRASAC, a licensed micro-fi nance institution (“PRASAC”), was incorporated in Cambodia and registered with the Ministry of The headquarters is located at house #25, street 294, Sangkat Commerce as a private limited liability company under register Boeung Kengkang 1, Chamcarmorn, Phnom Penh, Cambodia. number Co-6931/04P dated 12 August 2004. Its activities are an offshoot of the PRASAC Credit Association (PCA), which As at 31 December 2006, the PRASAC employed 610 employees was managed by and funded by the European Union (EU). PCA (2005: 464 employees) was initially established in 1995 as a support program for the agriculture sector in Cambodia, covering six provinces around These fi nancial statements have been approved for issued by Phnom Penh. the Supervising Board on 30 August 2007.

PRASAC was established based on the asset transfer document dated 31 December 2004, whereby the net assets of PCA was 2. SUMMARY OF SIGNIFICANT transferred to PRASAC as subordinated debt, as discussed in note ACCOUNTING POLICIES 18 to these fi nancial statements. The signifi cant accounting policies adopted in the preparation PRASAC obtained its license from the Central Bank to conduct of these fi nancial statements are set out below: business as a micro-fi nance institution in the Kingdom of Cambodia as set out in Central Bank’s register No. 10 dated 15 Basis of preparation November 2004. The license will expire on 1 December 2007. The fi nancial statements of PRASAC, which are expressed in The management planned to renew the license in 2007. PRASAC Cambodian Riel (“Riel”), are prepared under the historical cost is going to apply for the renewal of its indefi nite period of convention. PRASAC maintains its accounting records in Riel, license from National Bank of Cambodia. Management expected the functional currency in Cambodia. to obtain the renewal license in 2007. The fi nancial statements are not intended to present the PRASAC is engaged primarily in the provision of micro-fi nance financial position, results of operations and cash flows in services to the rural population of Cambodia through its accordance with accounting principles and practices generally headquarters in Phnom Penh and various provincial and accepted in countries and jurisdictions other that Cambodia. district offices in the Kingdom of Cambodia. The accounting principles and practices utilized in Cambodia may differ from those generally accepted in countries and PRASAC is currently in the process of amending the Memorandum jurisdictions other than Cambodia. and Articles of Association for the changes in shareholders

and is yet to be certifi ed by the Ministry of Commerce and Cen- The signifi cant accounting policies adopted in the preparation tral Bank. [Since the approval certifi cation of the authorities is of the fi nancial statements are set out below.

PRASAC Annual Report 06 25 Basis of aggregation Loans and advance to customers The financial statements include the financial statements Loans and advances to customers are stated in the balance of the PRASAC’s headquarters and its provincial branches sheet at the amount of principal outstanding less any amounts within Cambodia. On aggregation of balances, all signifi cant written off and impairment allowance for bad and doubtful interbranch transactions and balances are eliminated in full. loan and advances, including specifi c and/or general provisions, to refl ect the estimated recoverable amount. The principal Financial instruments is calculated on the effective interest rate method, which is PRASAC’s fi nancial assets and liabilities include cash and based on expected future cash fl ows of contractual installment cash equivalents, originated loans and receivables, deposits, payments discounted at prevailing market rates offered for investment in associate and other receivables and payables. The similar loans with similar risk profi les. accounting policies for the recognition and measurement of these items are disclosed in the respective accounting policies. Provision for bad and doubtful loans The adequacy of the provision for bad and doubtful loans is Segment information evaluated monthly by management. Factors considered in PRASAC is operating within one business segment, commercially evaluating the adequacy of the provision include the size of the oriented micro-fi nance services, and within one geographical portfolio, previous loss experience, current economic conditions segment, the Kingdom of Cambodia. and their effect on clients, the fi nancial and economic situation of clients, and the performance of loans in relation to contract Foreign currency translation terms. PRASAC transacts primarily in and maintains its accounting records in Cambodian Riel (“Riel”). Foreign currency transac- The provision for bad and doubtful loans charged to expense tions other than Riel are accounted for at the exchange rates is based on management’s judgment which consistent with the prevailing at the date of transactions. Gains and losses resulting Central Bank’s guidelines of the amount necessary to maintain from the settlement of such transactions and from the the provision at a level adequate to absorb losses. Presently, the translation of monetary assets and liabilities denominated in amount of provision is being determined by applying defi ned foreign currencies are recognized in the income statement. percentages to the respective category to which each of the Monetary assets and liabilities dominated in the currencies other loans belong, as set out below. than Riel at the balance sheet date are translated into Riel at the Loan status/classifi cation Percentage applied rates of exchange ruling at that date. (%) Loan of one year or less The principal rates used to translate monetary assets and Standard liabilities at the balance sheet date are: Sub standard loans (where repayments and/or interest are more than 30 days overdue) 10 Doubtful loans (where repayments and/or 31 December 31 December interest are more than 60 days overdue) 30 2006 2005 Loss (where repayments and/or interest are Riel/US Dollar 4,057 4,112 more than 90 days overdue) 100

Loan of more than one year Standard Cash and cash equivalents Sub standard loans (where repayments For the purposes of the cash fl ow statement, cash and cash are more than 30 days overdue) 10 equivalents comprise cash and bank balances, demand deposits Doubtful loans (where repayments are more than 180 days overdue) 30 and short -term highly liquid investments with maturities of or Loss (where repayments are more less than 90 days maturity from the date of acquisition and they than 360 days overdue) 100 are readily convertible to known amounts of cash and subject An additional general provision of bad and doubtful loans is set at the to an insignifi cants risk of changes in value. rate of 1.5% on loan outstanding as at year end, excluding loan to related party (Staff Loans). Loans are written off when it is considered as uncollec tible. Loans written off are taken out of the outstanding loan portfolio and deducted from the allowance for loan loss. 26 PRASAC Annual Report 06 Overdue loan The assets useful lives are reviewed, and adjusted if appropriate, In accordance with Prakas B 700-51K issued by the Central at each balance sheet date. Bank on 17 February 2000, overdue loans is defi ned as total outstanding principal where principal or interest past due unless Gains or losses on the sale of property and equipment are the payment terms on interest or principal have been adjusted. recognized upon the disposal of such assets.

The provision will be calculated as a percentage of the loan Fully depreciated property and equipment are retained in the amount outstanding at the time the loan is classifi ed, excluding fi nancial statement until disposal or written-off. accrued interest. The provision shall be recorded in the institution’s accounts and charged to the income statement for the month Impairment of assets during which the corresponding loan has been classifi ed below Assets that are subject to amortisation are reviewed for standard. The analysis of overdue loans is set out in the note 7. impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, An Recoveries on loans previously written off and reversal of impairment loss is recognized for the amount by which the previous provisions are disclosed as a deduction from the bad asset’s carrying amount exceeds its recoverable amount. The debts and doubtful accounts expense in the statement of income. recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of impairment, An uncollectible loan or portion of a loan classifi ed as bad is assets are grouped at the lowest levels for which there are written off after taking into consideration the realisable value of separately identifi able cash fl ows (cash generating units). the collateral, if any, when, in the judgment of the management with the approval of the supervising board, there is no prospect Intangible assets of recovery. Loan written off are reviewed on a quarterly basis. Computer software Acquired computer software licenses are capitalized on the Deposit with banks basis of the costs incurred to acquire and bring to use the Deposits and placements with banks are carried at cost. specifi c software. These costs are amortized over the period with compliance to computer and peripherals depreciation rate Other receivables and method. Other receivables are carried at estimated realisable value.

Costs associated with development or maintaining computer Property and equipment software programmers are recognized as expenses when incurred. Property and equipment are stated at historical cost less accumulated depreciation over the useful lives. Customer Deposits Deposits from customers are stated at placements value and adjusted for accrued interest. Building/Offi ce improvements 5%- straight line Motor vehicles 25% - declining balance Provisions Motorcycles 25% - declining balance A provision is recognized in the balance sheet when PRASAC Computer and Peripherals, software 50% - declining balance MFI has a legal or constructive obligation as a result of a past Communication Equipments 25% - declining balance event, and it is probable that an outfl ow of economic benefi ts Offi ce Furniture and Fixtures 25% - declining balance will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future Expenditure for maintenance and repairs that do not extend cash flows at a pre-tax rate that reflects current market the useful lives of assets are expensed to the income statement assessments of the time value of money and, where appropriate, in the year in which they are incurred. the risk specifi c to the liability.

An asset’s carrying amount is written down immediately to its Provision for Retirement and Severance pay recoverable amount if the asset’s carrying amount is greater One month-salary per year is accrued for the provision of than estimated recoverable amount. retirement and severance pay.

PRASAC Annual Report 06 27 An employee who reaches the age of retirement is entitled to Commission and fee incomes and expenses are recognized in full entitlement of one month current salary for each year of the income statement on accrual basis. service rendered. The age of retirement for male employees is 60 years old and 55 years for female employees. Operating leases Operating Leases in which a signifi cant portion of the risks and An employee who resigns before retirement date is entitled rewards of ownership are retained by the lesser are classifi ed as to following: operating leases. Payments made under operating leases (net of any incentives received from the lesser) are charged to the income statement on a straight-line basis over the period of Year of Service rendered Entitlement the lease. Less than 3 years 50% More than 3 years and Less than 6 year 80% Fund and grants More than 6 years and Less than 10 year 100% Revenue grants are released to the income statement over More than 10 years 120% the periods they are expected to be received as stipulated in their respective grant agreements. Grants received to fi nance operating expenses are recognized as income in the same The differences between provision for retirement and severance period as the related expenses is recorded. benefi ts and realized amount will be charged to income statement when incurred. Related parties Parties are considered to be related to PRASAC if one party has the ability, directly or indirectly, to control the other party or exercise Deferred income tax signifi cant infl uence over the other party in making fi nancial Deferred income tax is provided in full, using the liability method, and operating decisions, or where PRASAC and the other on temporary differences arising between the tax bases of party are subject to common control or signifi cant infl uence. assets and liabilities and their carrying amounts in the consoli- Related parties may be individuals or corporate entities and dated fi nancial statements. Deferred income tax is determined include close family members of any individual considered to using tax rates (and laws) that have been enacted or substantially be related party. enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the In accordance with the Law on Banking and Financial Institu- deferred income tax liability is settled. tions, related parties are defi ned as parties who hold, directly or indirectly, at least 10% of the capital of PRASAC or voting Deferred income tax assets are recognized to the extent that it rights and include any individual who participates in the ad- is probable that future taxable profi t will be available against ministration, direction, management or internal control of which the temporary differences can be utilised. PRASAC.

Deferred income taxes are calculated using a principal tax rate of 20%. 3. RISK MANAGEMENT Income and expense recognition Financial risk management and policies Interest income earned on loans is recognized on an accruals basis taking into consideration the principal amount of loans By its nature the PRASAC’s activities are principally related to the outstanding. Interest on loans is calculated using the declining use of ﬁ nancial instruments. The PRASAC accepts funds from balance method on monthly balances of the principal amount its shareholders and lenders and seeks to earn interest margins outstanding. When a loan becomes non-performing, the by lending at higher rates whilst maintaining sufﬁ cient liquidity recording of interest as income is suspended until it is realized to meet all claims that might fall due. on cash basis.

28 PRASAC Annual Report 06 PRASAC is exposed to risks from changes in market interest 4. CASH IN HAND rates and in currency exchange rates. The PRASAC manages and assumes such risks by monitoring the market movements 31 December 31 December of interest and currency exchange rates. There is no hedging 2006 2005 currently. The PRASAC does not hold or issue derivative RRieliel ’000’000 RRieliel ’’000000 HHeadead ofﬁofﬁ ccee 2207,25107,251 11,218,790,218,790 instruments. PPROVINCIALROVINCIAL BRANCHES:BRANCHES:

Since the majority of the fi nancial assets are short-term and the TTbongbong khmumkhmum 1115,95615,956 1173,58373,583 interest rates are subject to be changed with the market rate, KKienien svaysvay 1110,65510,655 113,7973,797 CCheungheung preyprey 996,9386,938 1113,84813,848 the PRASAC does not use derivative fi nancial instruments to BBanteayanteay measmeas 889,9639,963 119,1699,169 hedge such risk. SSvayvay riengrieng 887,3637,363 226,1606,160 KKg.chamg.cham 885,4825,482 1126,37126,371 Interest rate risk PPreyrey vengveng 778,3438,343 1183,75983,759 TThehe iinterestnterest rrateate rriskisk iiss tthehe rriskisk tthathat ffutureuture mmovementsovements iinn mmarketarket KKandalandal steungsteung 771,7531,753 — iinterestnterest rratesates wwillill aaffectffect tthehe rresultsesults ooff tthehe PPRASAC’sRASAC’s ooperationsperations BBaekaek chanchan 770,0250,025 — aandnd iitsts ccashash fl oows.ws. IItsts eexposurexposure ttoo iinterestnterest rrateate rriskisk rrelateselates PPreyrey krykry 669,5409,540 — pprimarilyrimarily ttoo iitsts lloansoans aandnd bbankank ddeposits.eposits. KKampongampong ChreyChrey 554,5114,511 555,2015,201 SSreysanthorreysanthor 554,4774,477 — Foreign currency risk KKampongampong PopilPopil 447,4587,458 229,0149,014 KKoahoah thomthom 444,4654,465 — TThehe PPRASACRASAC iiss eexposedxposed ttoo fforeignoreign eexchangexchange rriskisk aarisingrising ffromrom KKampongampong ChhnangChhnang 443,1843,184 88,054,054 vvariousarious ccurrencyurrency eexposures,xposures, pprimarilyrimarily wwithith rrespectespect ttoo tthehe UUSS KKampongampong ThmarThmar 336,6206,620 — ddollars.ollars. FForeignoreign eexchangexchange rriskisk aarisesrises ffromrom ffutureuture ccommercialommercial PPreyrey kabaskabas 334,1144,114 447,5427,542 ttransactionsransactions aandnd rrecognizedecognized aassetsssets aandnd lliabilities.iabilities. IInn aaccordanceccordance BBatiati 333,5533,553 — wwithith CCentralentral BBank’sank’s gguidelines,uidelines, PPRASACRASAC iiss llimitedimited iinn fforeignoreign NNeakeak loeungloeung 229,9939,993 660,3030,303 ccurrencyurrency eexposurexposure ttoo a rratioatio nnotot ttoo eexceedxceed 55%% pperer iindividualndividual MMukuk kampulkampul 228,3788,378 — ccurrencyurrency aandnd 115%5% ooff iitsts aaggregateggregate nnetet wworth.orth. TTherehere iiss nnoo rreserveeserve BBaphnomaphnom 226,4206,420 — fforor ccurrencyurrency rriskisk ooff uunhedgednhedged bborrowingsorrowings wwhichhich aarere ddenominat-enominat- CChamkarleuhamkarleu 222,4512,451 — eedd iinn UUnitednited SStatetate DDollarsollars ((USD).USD). IInn oorderrder ttoo mmitigateitigate ccurrencyurrency KKampongampong TralachTralach 118,2288,228 884,5914,591 TTakeoakeo 116,4116,411 337,8487,848 rrisk,isk, PPRASACRASAC uusese tthehe ccashash ffromrom bborrowingorrowing iinn UUSDSD ttoo pproviderovide KKamchaymearamchaymear 115,0775,077 — lloanoan iinn UUSD.SD. PPursatursat 112,1792,179 — KKampongampong SpeuSpeu 111,4631,463 1148,35948,359 Credit risk TTaa kkhmaohmao 111,3071,307 — TThehe PPRASACRASAC iiss eexposedxposed ttoo ccreditredit rriskisk pprimarilyrimarily wwithith rrespectespect ttoo KKongong piseypisey 111,2131,213 777,6187,618 lloans.oans. SSuchuch rrisksisks aarere mmonitoredonitored oonn a rrevolvingevolving bbasisasis aandnd ssubjectubject PPreakreak kdamkdam 99,819,819 — ttoo a rregularegular ffollowollow uupp vvisits.isits. EExposurexposure ttoo ccreditredit rriskisk iiss mmanagedanaged CChhlonghhlong 99,731,731 — tthroughhrough rregularegular aanalysisnalysis ooff tthehe aabilitybility ooff bborrowersorrowers aandnd ppotentialotential KKirivongirivong 88,653,653 — bborrowersorrowers ttoo mmeeteet iinterestnterest aandnd ccapitalapital rrepaymentepayment oobligationsbligations KKrakorrakor 55,128,128 — KKampongampong ThomThom 44,973,973 — aandnd bbyy changingchanging tthesehese llendingending llimitsimits where appropriate. SSaa angang 44,474,474 447,2337,233 Management believes that the PRASAC’s maximum exposure BBoribooribo 33,826,826 110,5260,526 to credit risk is limited to the carrying amount of loans less OOdongdong 22,408,408 — provisions for doubtful loans. Loans are also provided to those PPonheaonhea krekkrek 11,010,010 — borrowers that are deemed profi table. RRuesseiuessei kaevkaev 8866 — SSithorithor kandalkandal — 33,054,054 Fair value CChantreahantrea — 228080 Since the majority of fi nancial assets are short-term (maturities TTotalotal 11,684,879,684,879 22,485,100,485,100 of less than one year) with interest close to current market rates, the management believes the fair value of the PRASAC’s fi nancial assets do not materially differ from their carrying values.

PRASAC Annual Report 06 29 5. BALANCES WITH BANKS Type Interest Repayment Tenure of loan rates terms 31 December 31 December Individual 24% p.a. to • Monthly interest and 4 to 2006 2005 Loan 42% p.a. principal 24 months Riel ’000 Riel ’000 • Monthly interest and every 2 or 3 months for Current accounts, without interest principal and interest Foreign Trade Bank of Cambodia 6,088,563 2,361,573 monthly • End of term Acleda Bank Plc. 7,913 — for principal and interest Savings Group 36% p.a. • Monthly interest and 4 to Acleda Bank Plc. 2,318,427 — Loan and 42% principal 12 months Etimos 12,844 — p.a. • Monthly interest and every 2 or 3 months 8,427,747 2,361,573 for principal • End of term for principal and interest 6. BALANCES WITH CENTRAL BANK

31 December 31 December The borrowers can borrow in USD currency or KHR. The 2006 2005 principal can be repaid at any time without any penalty Riel ’000 Riel ’000 except for bigger (>Riels 8,000,000) loans which require at least Fixed deposit with central bank 4 months of schedule interest to be paid. Capital guarantee deposit 500,000 12,500 Reserve requirement 44,920 669,6109,610 b) Analysis by performing and non-performing loans Current account 754,364 18,773

1,299,284 100,883 31 December 31 December 2006 2005 Riel ’000 Riel ’000 Following the Central Bank’s Prakas No. B700-006 on the Standard loans Licensing of Micro-Finance Institutions, PRASAC maintains an • secured 12,209,755 34,427,236 amount equal to 5% of its planned capital of Riel 10,000,000,000 • unsecured 76,994,843 11,181,971 as at 31 December 2006 (2005: Riel 250,000,000) in a interest Substandard loans earning account with Central Bank (3% per annum following • secured — 62,940 Central Bank’s Prakas No. 06.210). • unsecured 7,132 1,200 Doubtful loans • secured 9,937 26,170 • unsecured — 862 7. LOANS AND ADVANCES TO Losses CUSTOMERS • secured — 95,296 • unsecured 194,580 48,752 a) Analysis by type of loan products 89,416,247 45,844,427

31 December 31 December 2006 2005 Riel ’000 Riel ’000 Group loan 9,821,806 11,232,784 Individual loan 79,594,441 34,611,643 89,416,247 445,844,4275,844,427 Provision for bad and doubtful loans (See h) (1,527,335) ((1,295,444)1,295,444) 87,888,912 44,548,983

30 PRASAC Annual Report 06 c) Analysis by relationship f) Analysis of gross loans by provinces

31 December 31 December 31 December 31 December 2006 2005 2006 2005 Riel ’000 Riel ’000 Riel ’000 Riel ’000 Non related parties 88,603,593 45,431,539 Head ofﬁ ce 125,702 4,064 Related parties Kampong Chrey 6,362,057 4,334,892 Management 1193,93293,932 59,751 Banteay Meas 4,365,989 1,870,346 Staff 618,722 353,137 Svay Rieng 4,298,311 1,297,355 89,416,247 45,844,427 Kampong Cham 4,177,798 3,511,118 Takeo 3,385,930 1,728,526 All staff members have access to one loan from PRASAC Neak Loeung 3,259,277 3,571,662 with loan conditions as follows: Koah Thum 3,210,477 — Loans to purchase motor cycles: Tbong Khmum 3,124,670 2,684,358 • Loan amount up to KHR 4.4 million or USD1,100 Kampong Speu 3,120,519 3,563,359 • Interest rate: 0% Kampong Popil 3,066,639 1,753,631 • Term: 24 months Kong Pisey 2,744,405 2,950,223 • Repayment: Monthly installment Kampong Chhnang 2,714,339 2,166,961 General purposes: Baphnom 2,695,579 — • Loan amount is equal to up-to six-month-salary • Interest rate: 14% p.a. Kirivong 2,664,745 — • Term: 24 months Cheung Prey 2,352,379 3,767,371 • Repayment: Monthly installment Prey Kabas 2,352,290 1,838,688 Odong 2,324,785 — Sa Ang 2,316,082 1,972,173 d) Analysis by maturity Kien Svay 2,228,547 765,549 Kampong Thmar 2,224,622 — 31 December 31 December 2006 2005 Srey Santhor 2,092,366 — Riel ’000 Riel ’000 Baek Chan 1,951,628 — Less than 1 month 195,337 155,526 Pursat 1,931,825 — From 1 month to 3 months 5,936,767 5,770,350 Praek Kdam 1,896,133 — From 3 months to 1 year 56,046,614 31,453,622 Kampong Tralach 1,889,655 3,261,685 Prey Veng 1,840,656 2,701,559 Over 1 year 27,237,529 8,464,929 Kandal Stoeung 1,777,787 — 89,416,247 45,844,427 Ponhea Kraek 1,724,509 — Bati 1,699,137 — Chamkar Leu 1,680,576 — Chhlong 1,643,198 — Prey Kri 1,260,079 — Boribo 1,217,797 1,846,743 Krakor 1,063,232 — Mukh Kampul 1,040,713 — Kamchaymear 1,015,737 — Kampong Thom 350,403 — TaKhmao 215,358 — Kampot 9,028 — Sithor Kandal 1,288 254,164

Total 89,416,247 45,844,427

PRASAC Annual Report 06 31 g) Analysis of gross loans by currencies 8. OTHER ASSETS

31 December 31 December 31 December 31 December 2006 2005 2006 2005 Riel ’000 Riel ’000 Riel ’000 Riel ’000 Accrued interest income-Net 2,258,881 1,764,047 Khmer Riel 47,476,974 41,158,160 Prepaid expenses 150,423 136,048 US Dollar 41,939,273 44,686,267,686,267 Advances to staff 25,637 119,0019,001 89,416,247 45,844,427 Others 2,569,584 444,8254,825 5,004,525 11,963,921,963,921 h) Loan loss reserves for bad and doubtful loans

31 December 31 December 2006 2005 9. DEFERRED TAX ASSETS Riel ’000 Riel ’000 Deferred income tax assets and liabilities are offset when there Specifi c provision in accordance is a legally enforceable right to offset current tax assets against with Central Bank’s guidelines 198,274 158,571 current tax liabilities and when deferred income taxes relate to General provision 1,329,061 11,136,873,136,873 the same fi scal authority. The offset amounts are as follows: Balance at end of the year 1,527,335 1,295,444 31 December 31 December 2006 2005 The movements in provision for bad and doubtful loans are Riel ’000 Riel ’000 as follows: Deferred tax assets 185,632 136,680 Deferred tax liabilities (54,953) — Specifi c General Provision Provision Total 130,679 1136,68036,680 Riel ’000 Riel ’000 Riel ’000 2005 The gross movement on the deferred income tax account is as Balance at beginning 1,581,462 961,550 2,543,012 of the year follows: Provision for the year (16,590) 1175,32375,323 158,733 Written off (1,406,301) — (1,406,301) 31 December 31 December 2006 2005 Balance at end Riel ’000 Riel ’000 of the year 158,571 1,136,873 1,295,444 At beginning of year 136,680 — 2006 (Charged)/credited to the income (6,001) 1136,68036,680 statement (Note 27) Balance at beginning 158,571 11,136,873,136,873 1,295,444 of the year At end of year 130,679 1136,68036,680 Provision for the year 39,703 1192,18892,188 231,891 Written off — — — The movement of deferred tax assets and liabilities during Balance at end the year, without taking into consideration the offsetting of of the year 198,274 1,329,061 1,527,335 balances within the same jurisdiction, is as follows:

32 PRASAC Annual Report 06 Deferred tax assets

Provision for Accrued retirement and Commission to severance pay Accrued loan’s Group beneﬁ t staff beneﬁ t Leader Total Riel’000 Riel’000 Riel’000 Riel’000

As at 1 January 2005 ———— Credited to income statement 54,090 63,454 19,136 136,680

As at 31 December 2005 54,090 63,454 19,136 136,680 Credit/(charged) to income statement 121,417 (63,454) (9,011) 48,952 As at 31 December 2006 175,507 — 10,125 185,632

Deferred tax liabilities

Accelerated depreciation Riel’000

As at 1 January 2005 — Charged to income statement —

As at 31 December 2005 — Charged to income statement (54,953) As at 31 December 2006 (54,953)

PRASAC Annual Report 06 33 10. PROPERTY AND EQUIPMENT

Ofﬁ ce Computer & Communication furniture Vihicles Motorcycles peripherals Equipment Total Riel’ 000 Riel’ 000 Riel’ 000 Riel’ 000 Riel’ 000 Riel’ 000

2006 Cost

As at 31 December 2005 413,401 733,641 417,316 432,734 79,416 2,076,508 Additions 265,193 574,657 14,936 272,838 — 1,127624 Disposals (21,406) — — (65,394) (5,581) (92,381)

As at 31 December 2006 657,188 1,308,298 432,252 640,178 73,835 3,111,751

Accumulated Depreciation As at 31 December 2005 291,070 282,284 390,131 297,620 48,774 1,309,879 Charge for the year 59,946 145,532 7,265 132,070 7,300 352,113 Disposals (18,132) — — (64,309) (5,105) (87,546)

As at 31 December 2006 332,884 427,816 397,396 365,381 50,969 1,574,446

Net book value As at 31 December 2006 324,304 880,482 34,856 274,797 22,866 1,537,305

As at 31 December 2005 122,332 451,356 27,185 135,114 30,641 766,628

11. CUSTOMERS’ DEPOSITS

31 December 31 December 2006 2005 Riel ’000 Riel ’000

Certiﬁ cate of deposits 68,772 211,986 Voluntary savings 907,900 11,365,285,365,285 976,672 1,577,271

Type of Deposits Tenure Interest rates Khmer Riel Savings for Staff unlimited 8% perannum Savings for Customers unlimited 2.5% perannum Fixed Deposit 3 months 3% perannum 6 months 5.5% per annum 12 months 8% perannum US Dollar Savings for Staff unlimited 6% perannum Savings for Customers unlimited 2% perannum Fixed Deposit 3 months 2.5% per annum 6 months 5% perannum 12 months 6.5% perannum

34 PRASAC Annual Report 06 12. BORROWINGS

31 December 31 December 2006 2005 Note Riel ’000 Riel ’000

Dexia Micro-Credit Fund/ Sub Fund Blue Orchard Debt 1 13,384,800 4,127,000 Oikocredit, Ecumenical Development Cooperative 2 9,839,334 2,063,500 Global Commercial Microfi nance Consortium 3 8,112,000 — The Netherlands-Finance Development Company 4 6,100,500 — Credit Suisse Microfi nance Fund Management Company 5 6,084,000 — Consorzio Etimos S.C 6 2,028,000 — Impulse/Incofi n Microfi nance Investment Fund 7 2,028,000 4,127,000 Prasac Staff Company 8 810,000 — Appui au Development Autonome 9 608,400 619,050 Calvert Social Investment Foundation 10 405,600 — 49,400,634 10,936,550

1) Dexia Micro-Credit Fund/Sub Fund Blue Orchard Debt

Credit limit in original currency US$3,300,000 Equivalent in Riel Riel 13,384,800,000 Effective date 1st Loan of US$ 750,000: 18 April 2006 2nd Loan of US$ 750,000: 17 July 2006 3rd Loan of US$ 1,800,000: 3 October 2006 Maturity date 1st Loan of US$ 750,000: 18 April 2008 2nd Loan of US$ 750,000: 17 July 2009 3rd Loan of US$ 1,800,000: 3 October 2008 Interest rate 1st Loan : Libor USD (6 months) + 6.15% p.a. 2nd Loan : Libor USD (6 months) + 6.00% p.a. 3rd Loan : Libor USD (6 months) + 5.00% p.a. Repayment terms Principal and interest on semi-annually basis Guarantee mechanism None

PRASAC Annual Report 06 35 2) Oikocredit, Ecumenical Development Cooperative

Credit limit in original currency US$2,425,871 Equivalent in Riel Riel 9,839,334,000 Effective date 1st Loan of US$2,000,000 on 1 November 2006 2nd Loan of US$ 425,871 on 22 December 2006 Maturity date 1st Loan of US$2,000,000 on 1 November 2011 2nd Loan of US$ 425,871 on 28 June 2008 Interest rate 1st Loan : 9.00% p.a. 2nd Loan : 9.50% p.a. Repayment terms 1st Loan : Principal repayment of 4 equal instatement starting from 1 May 2008 on semi

Guarantee mechanism

3) Global Commercial Microﬁ nance Consortium

Credit limit in original currenc Equivalent in Riel Effective date

Maturity date

Interest rate

Repayment terms

Guarantee mechanism

4) The Netherlands-Finance Development Company

Credit limit in original currency Effective date Maturity date Interest rate Repayment terms Guarantee mechanism

5) Credit Suisse Microﬁ nance Fund Management Company

Credit limit in original currenc Equivalent in Riel Effective date

Maturity date

Interest rate

Repayment terms

Guarantee mechanism

36 PRASAC Annual Report 06 6) Consorzio Etimos S.C

Credit limit in original currency US$500,000 Equivalent in Riel Riel 2,028,000,000 Effective date 1st Loan of US$400,000: 6 April 2006 2nd Loan of US$100,000: 23 October 2006 Maturity date 1st Loan of US$400,000: 6 April 2009 2nd Loan of US$100,000: 4 June 2009 Interest rate Libor USD (6 months) + 4.5% p.a. Repayment terms Principal and interest repayment on semi-annually basis

7) Impulse/Incoﬁ n Microﬁ nance Investment Fund

00 on 21 December maturity and interest on % up front fee of

8) Prasac Staff Company

convertible

nd interest on quarterly basis.

9) Appui Au Development Autonome- Ada

nd interest on quarterly basis.

PRASAC Annual Report 06 37 10) Calvert Social Investment Foundation

Credit limit in original currency US$100,000 Equivalent in Riel Riel 405,600,000 Effective date 31 July 2006 Maturity date 31 July 2009 Interest rate 7% p.a. Repayment terms Principal at maturity and interest on quarterly basis. Guarantee mechanism None

13. PROVISION FOR RETIREMENT AND 16. SHARE SUBSCRIPTION RECEIVED SEVERANCE BENEFIT OBLIGATION IN ADVANCE

31 December 31 December According to Subscription and Shareholder Agreement dated 2006 2005 on 14 December 2006, ﬁ ve new shareholders have invested Riel ’000 Riel ’000 with PRASAC. All 395,000 new ordinary shares issued were subscribed by the new shareholders. The new shareholders have Balance at beginning of the year 270,450 133,996 paid in full for share subscription amounted to Riel 11,640,460,000 Additions during the year 617,228 1138,80438,804 of ordinary shares, at par value plus premium. Payments during the year (10,142) ((2,350)2,350)

Balance at the end of the year 877,536 270,450 In accordance with the NBC letter dated 06 July 2007, it was recommended and agreed that the new shares should be sold at fair value, and all share restructuring and capitalization were 14. CURRENT INCOME TAX LIABILITIES reversed, so as to restate PRASAC’s situation to that reported before the disputed transactions were performed. The trans- 31 December 31 December 2006 2005 actions are also required an approval from NBC, which the Riel ’000 Riel ’000 approval has not been ﬁ nalized from NBC yet. The NBC also advised the recommended framework for recapitalization to Balance at the beginning of the year 631,999 — calculate the sales of PRASAC shares and it is yet to be applied Current ﬁ nancial year income for 2007 transactions. tax expenses for 2005 and 2006 683,365 7753,87853,878

Income tax liability payment (556,106) — As at 31 December 2006, the proceeds from the new share- Prepayment of Proﬁ t tax 1% (208,175) ((121,879)121,879) holders, therefore, were presented as “Share subscription Balance at end of the year 551,083 631,999 received in advance” under liability, since the transactions have not been valid and PRASAC may has an obligation to return such proceeds to the new shareholders. 15. ACCRUALS AND OTHER LIABILITIES The details of share subscription received in advance are as follows: 31 December 31 December 2006 2005 Total Riel’00 Riel ’000 Riel ’000 BIO 2,328,092 Accrued expenses DCG 2,328,092 Commission 50,625 95,680 Bonus/incentives 769,890 606,482 FMO 2,328,092 Interest 702,013 184,963 LOLC 2,328,092 Accrued taxes Withholding on others 2264,20864,208 331,8471,847 Oikocredit 2,328,092 Withholding on Salary 447,7557,755 229,0149,014 11,640,460 Other payables 5525,33125,331 5567,81767,817 Provision for withholding tax — — BIO : Belgium Investment Company for Developing Counties SA Others 883,7183,718 338,2298,229 DCG : Dragon Capital Group FMO : The Netherlands Finance Development Company 2,443,540 1,554,032 LOLC : Lanka Orix Leasing Company Ltd Oikocredit: Oikocredit Ecumenical Development Cooperative Society UA

38 PRASAC Annual Report 06 17. SHARE CAPITAL

The details of shareholding are as follows:

31 December 2006 31 December 2005

%(Percent) of %(Percent) of Amount %(Percent) of Number of Amount ownership shares Riel’ 000 ownership shares Riel’ 000

CRDF 95% 11,875 237,500 95% 11,875 237,500 PSCO 5% 625 12,500 5% 625 12,500 100% 12,500 250,000 100% 12,500 250,000

CRDF : Cambodia Rural Development Foundation PSCO : PRASAC Staff Company Each registered share has a par value of Riel 20,000.

18. SUBORDINATED DEBT 19. CASH AND CASH EQUIVALENTS

The subordinated debt consisting of the net assets and micro- 31 December 31 December lending operation of PCA was transferred by European Commission 2006 2005 (“EC”) to Royal Government of Cambodia (“RGC”) and transferred Riel ’000 Riel ’000 by RGC to PRASAC MFI on 31 December 2004 with the terms and conditions of the agreement as following: Cash on hand 1,684,879 2,485,100

• The fund is to be recorded as “Subordinated Debt” in the Balance with Banks 8,427,747 2,361,573 accounting records of PRASAC MFI Current account with NBC 754,364 118,7738,773 • PRASAC MFI shall repay the total value of the Subordinated 10,866,990 4,865,446 Debt to RGC on the following terms and conditions: a) The Subordinated Debt will not be repayable to the RGC unless PRASAC MFI ceases to provide credit to rural 20. INTEREST INCOME communities and micro enterprises in Cambodia or unless PRASAC elects at its own discretion to repay all or part 31 December 31 December of the Subordinated Debt to RGC; 2006 2005 b) The Subordinated Debt is a non-distributable fund; Riel ’000 Riel ’000

c) The Subordinated Debt is considered as “Tier II Capital” Group loan 3,579,765 3,908,852 in the context of Article 15 of Prakas No.B700-006 on Individual loan 17,465,345 9,414,053 the licensing of Micro-Finance Institutions dated 11 Balances with banks 274 — January 2000 and shall be included when calculating the 21,045,384 13,322,905 Capital Adequacy Ratio of PRASAC MFI. Subsequently, this was superseded by the NBC letter dated 22 May 2007 recommended that PRASAC should request for permission from NBC to include Subordinated Debt as 21. INTEREST AND FEE EXPENSE Tier II Capital in Capital Adequacy Ratio calculation.” On 14 August 2007, PRASAC wrote a letter to NBC 31 December 31 December requesting for including Subordinated Debt in calculation 2006 2005 of net worth. As at to date, there is no response from Riel ’000 Riel ’000 NBC. Borrowings 2,333,436 276,300 • The Subordinated Debt bears no interest. Customers’ deposits 55,216 75,415 2,388,652 351,715

PRASAC Annual Report 06 39 22. FEE AND COMMISSION EXPENSE 25. OPERATING AND OTHER EXPENSES

31 December 31 December 31 December 31 December 2006 2005 2006 2005 Riel ’000 Riel ’000 Riel ’000 Riel ’000

Fee on Group Loan 65,651 142,603 Salaries and staff beneﬁ ts 9,292,721 5,911,151 Fee on Borrowing Funds 373,274 — Occupancy 846,791 568,055 438,925 142,603 Fuel for cars and generators 844,714 623,701 Management advisor fee 668,585 672,016 Training 519,239 299,316

As compensation and to facilitate the collection of interest and Ofﬁ ce supplies 459,879 358,603 principal amount for group loans, PRASAC pays group loan Depreciation 352,113 216,280 leader, chief village, and chief commune: Per diem and incident travel 346,149 143,505 Marketing and promotion 330,803 302,061

Commission 2006 2005 Printing and stationary 329,294 196,256 Transportation 261,890 179,644 Group loan 4% 4%~8% Professional fees 209,456 170,066 Maintenance 159,545 69,243 This commission includes withholding tax and is paid based on Communication 123,516 89,694 interest collection. Based on Executive Management resolution Other operating expense 635,378 164,939 on 15 June 2006, Group Loan disbursed after 15 June 2006 is 15,380,073 9,964,530 not entitled to commission.

23. OTHER OPERATING INCOME 26. GRANT INCOME

31 December 31 December 31 December 31 December 2006 2005 2006 2005 Riel ’000 Riel ’000 Riel ’000 Riel ’000

Penalty Income on late CGAP Financial Transparency payments 51,349 92,681 Award 40,790 20,425 Foreign exchange gain, net 126,933 1,382 CGAP Rating Fund — 32,713 Loss on disposal (4,835) (7,141) 40,790 53,138 Other Income 161,577 13,247 335,024 100,169 27. INCOME TAX EXPENSE

24. PROVISION FOR BAD AND a) Tax on proﬁ t expenses DOUBTFUL LOANS - NET 31 December 31 December 2006 2005 31 December 31 December 2006 2005 Riel ’000 Riel ’000 Riel ’000 Riel ’000 Current tax 683,364 753,878 Provision for the period (Note 7) 231,891 158,733 Deferred tax (Note 9) 6,001 (136,680) Recovery of written-off 689,365 617,198 previous year (422,648) (227,360) (190,757) (68,627)

40 PRASAC Annual Report 06 b) Accounting proﬁ t reconciliation c) Other tax matters

The Company’s tax returns are subject to periodic examination 31 December 31 December 2006 2005 by the tax authorities. Because the application of tax laws and Riel ’000 Riel ’000 regulations to many types of transactions is susceptible to varying interpretations, amounts reported in the fi nancial statements Profi t before tax 3,404,305 3,085,991 could be changed at a later date upon fi nal determination by Profi t tax at 20% 680,861 617,198 the tax authorities. Expenses not deductible for tax purposes 2,192 — Additional income tax for 2005 6,312 — 28. DIVIDENDS PER SHARE 689,365 617,198 On 4 April 2006, dividends of Riel 25,000,000 (Riel 2,000 per share) were proposed and declared by SB. The dividends paid are related to net profi t for year ended 2005. This represents 10% of opening capital for the year ended 31 December 2006.

29. CURRENCY ANALYSIS (RIEL’000)

An analysis of PRASAC’s assets and liabilities by currency is as follows:

USD (Riel’000 Riel Riel equivalent) Riel ‘000 Riel ‘000

ASSETS Cash in hand 1,099,918 584,961 1,684,879 Balances with banks 6,105,623 2,322,124 8,427,747 Balances with Central Bank — 1,299,284 1,299,284 Loans and advances to customers 41,320,980 46,567,932 87,888,912 Other assets 1,087,040 3,917,485 5,004,525 Deferred tax assets — 130,679 130,679 Property and equipment 1,537,305 — 1,537,305

Total Assets 51,150,866 54,822,465 105,973,331 LIABILITIES Customers’ deposits 775,243 201,429 976,672 Borrowings 42,490,134 6,910,500 49,400,634 Provision for retirement and severance beneﬁ t obligation 744,621 132,915 877,536 Current income tax liabilities — 551,083 551,083 Accruals and other liabilities 1,945,893 497,647 2,443,540 Share subscription received in advance — 11,640,460 11,640,460

Total Liabilities 45,955,891 19,934,034 65,889,925

Net asset/(liability) position 5,194,975 34,888,431 40,083,406

PRASAC Annual Report 06 41 30. MATURITY PROFILE

The maturity proﬁ le of assets and liabilities (in Riel’ 000) are as follows:

From 1 From From No ﬁ xed Less than month to 3 months 1 year to Over maturity 31 December 2006 Total 1 month 3 months to 1 year 5 years 5 years date

ASSETS Cash in hand 1,684,879 1,684,879 — — — Balances with banks 8,427,747 8,427,747 — — — — — Balances with Central Bank 1,299,284 754,364 — — — — 544,920 Loans and advances to customers 87,888,912 195,337 5,823,937 — — — — Other assets 5,004,525 5,004,525 — 55,057,630 26,812,008 — — Deferred tax assets 130,679 — — — — — 130,679 Property and equipment 1,537,305 101,399 12,542 41,765 1,381,599 — —

TOTAL ASSETS 105,973,331 16,168,251 5,836,479 55,099,395 28,193,607 — 675,599

LIABILITIES Customers’ deposits 976,672 907,900 52,730 16,042 — — — Borrowings 49,400,634 — 1,014,000 10,055,977 37,520,657 810,000 — Provision for retirement and serverance beneﬁ t obligation 877,536 — — — — — 877,536 Current income tax liabilities 551,083 — 551,083 — — — — Accruals and other liabilities 2,443,540 2,139,888 303,652 — — — — Share subscription received in advance 11,640,460 — — 11,640,460 — — — TOTAL LIABILITIES 65,889,925 3,047,788 1,921,465 21,712,479 37,520,657 810,000 877,536

Net liquidity surplus/(gap) 40,083,406 13,120,463 3,915,014 33,386,916 (9,327,050) (810,000) (201,937)

31 December 2005 Total Assets 52,363,768 6,833,505 5,629,811 30,887,083 8,794,579 — 218,790 Total Liabilities 14,970,302 2,506,368 624,935 8,885,999 2,682,550 — 270,450

Net liquidity surplus/(gap) 37,393,466 4,327,137 5,004,876 22,001,084 6,112,029 — (51,660)

42 PRASAC Annual Report 06 31. INTEREST RATE RISK

The interest rate risk exposure of ﬁ nancial assets and ﬁ nancial liabilities (in Riel’ 000) are as follows:

From 1 From From Non- Less than month to 3 months 1 year to Over interest 31 December 2006 Total 1 month 3 months to 1 year 5 years 5 years bearing

ASSETS Cash in hand 1,684,879 — — — — — 1,684,879 Balances with banks 8,427,747 — — — — — 8,427,747 Balances with Central Bank 1,299,284 — — — — 544,920 754,364 Loans and advances to customers 87,888,912 195,337 5,823,937 55,057,630 26,812,008 — — Other assets 5,004,525 — — — — — 5,004,525 Deferred tax assets 130,679 — — — — — 130,679 Property and equipment 1,537,305 — — — — — 1,537,305

TOTAL RATE-SENSITIVE ASSETS 105,973,331 195,337 5,823,937 55,057,630 26,812,008 544,920 17,539,499

LIABILITIES Customers’ deposits 976,672 907,900 52,730 16,042 — — — Borrowings 49,400,634 — 1,014,000 10,055,977 37,520,657 810,000 — Provision for retirement and serverance beneﬁ t obligation 877,536 — — — — — 877,536 Current income tax liabilities 551,083 — — — — — 551,083 Accruals and other liabilities 2,443,540 — — — — — 2,443,540 Share subscription received in advance 11,640,460 — — — — — 11,640,460

TOTAL RATE-SENSITIVE LIABILITIES 65,889,925 907,900 1,066,730 10,072,019 37,520,657 810,000 15,512,619

Total interest sensitive Gap 40,083,406 (712,563) 4,757,207 44,985,611 (10,708,649) (265,080) 2,026,880

31 December 2005 Total Rate sensitive Assets 52,363,768 22,911 5,611,038 30,661,647 8,253,387 — 7,814,785 Total Rate sensitive Liabilities 14,970,302 1,365,285 211,986 8,254,000 2,682,550 — 2,456,481

TOTAL INTEREST SENSITIVE GAP 37,393,466 (1,342,374) 5,399,052 22,407,647 5,570,837 — 5,358,304

32. LEASE COMMITMENTS

PRASAC has lease commitments for the lease of its headquarters and provincial ofﬁ ces as follows:

31 December 31 December 2006 2005 Riel ’000 Riel ’000

Not more than one year 513,486 453,535 More than 1 year and not more than 5 years 710,086 11,018,305,018,305 1,223,572 1,471,840

PRASAC Annual Report 06 43 PRASAC MFI OFFICE NETWORK

kariyal½ykNþal³ HEAD OFFICE: Nº 25, St 294& 57, Boeung Kengkang1, pÞHelx 25/ pøÚv 294 EkgpøÚv57/ sgáat;bwgekgkg1/ Chamkarmon, x½NÐcMkarmn/ PñMeBj Phnom Penh, Cambodia. RbGb;sMbuRt³ 2412 P.O.Box: 2412 TUrs½BÞ³ ¬855¦ 23 220 102¼ 213 642 Tel: (855) 23 220 102/ 213 642 TUrsar³ ¬855¦ 23 216 362 Fax: (855) 23 216 362 Email: [email protected] Email: [email protected] Website: www.prasac.com.kh Website: www.prasac.com.kh

saxakMBg;cam Kampong Cham Branch PUmi7 XMukMBg;cam RsukkMBg;cam extþkMBg;cam Prampir village, Kampong Cham commune, sUmTak;Tgelak ³ Ém sMga: Kampong Cham district, Kampong Cham province Contact Person: Em Samnga TUrs½BÞTMnak;TMng ³ 012 777 611 ¼ 042 941 537 Contact Phone: 012 777 611 / 042 941 537 Email:[email protected] Email: [email protected] GnusaxakMBg;esom Sub branch kg. Siem PUmi7 XMukMBg;cam RsukkMBg;cam extþkMBg;cam Address: Prampir village, Kampong Cham commune, sUmTak;Tgelak ³ pat ept Kampong Cham district, Kampong Cham province Contact Person: Phat Pheth TUrs½BÞTMnak;TMng ³ 012 951 971 Contact Phone: 012 951 971 GnusaxacMkarelI Sub branch Chamkaleu PUmifñl;Ebk XMusaVyTab RsukcMkarelI extþkMBg;cam Address: Thnal Beak village, Svay Teap commune, sUmTak;Tgelak ³ Lay sufa Chamkarleu district, Kampong Cham province Contact Person: Lay Sotha TUrs½BÞTMnak;TMng ³ 042 390 017 rW 012 239 458 Contact Phone: 012 239 458 / 042 390 017 Email:[email protected] Email: [email protected] kariyal½yTMnak;TMngsÞwgRtg; Service Ofﬁ ce Stoeung Trang PUmibwgEdg XMuERBkk; RsuksÞwgRtg; extþkMBg;cam Boeng Deang Village, Prek Kak commune, sUmTak;Tgelak ³ DINa BNÑrkS Stoeung Trang district, Kampong Cham province Contact Person: Dyna Ponnarak TUrs½BÞTMnak;TMng ³ 012 350 646 Contact Phone: 012 350 646 GnusaxaéRBQr Sub branch Prey Chhor PUmiEsøg XMuéRCevon RsukéRBQr extþkMBg;cam Slaeng village, Chey Vien Commune, sUmTak;Tgelak ³ Xut suPa Prey Chhor district, Kg. Cham province Contact Person: Khut Sophea TUrs½BÞTMnak;TMng ³ 012 568 298 Contact Phone: 012 568 298 GnusaxaekaHsUTin Sub branch Koh Sotin PUmiedImesþA XuMBRg RsukekaHsUTin extþkMBg;cam Daeum Sdau village, Pongro commune, sUmTak;Tgelak ³ )a:t rsµI Koh Soutin district, Kg. Cham province Contact Person: Path Reasmey TUrs½BÞTMnak;TMng ³ 012 519 152 Contact Phone: 012 519 152 kariyal½yTMnak;TMngsIuFrkNaþl Service Ofﬁ ce Sithorkandal PUmiERBksENþk XMuERBkcRgáan RsuksIuFrkNaþl extþéRBEvg Prek Sandek village, Prek Changkran Commune, sUmTak;Tgelak ³ ra:n; vNÑ³ Sithorkandal district, Prey Veng. Contact Person: Rann Vannak TUrs½BÞTMnak;TMng ³ 012 448 667 Contact Phone: 012 448 667 GnusaxaeCIgéRB Sub branch Cheung Prey Skon Village, Soutip Commune, Cheung Prey District, PUmisÁn; XMusUTiB RsukeCIgéRB extþkMBg;cam Kampong Cham Province sUmTak;Tgelak ³ G‘av suPin Contact Person: Eav Sopin TUrs½BÞTMnak;TMng ³ 042 393 334 rW 011 901 186 Contact Phone: 011 901 186 / 042 393 334 Email:[email protected] Email: [email protected]

44 PRASAC Annual Report 06 GnusaxaRsIsn§r Sub branch Srey Santhor PUmisénÞ XMuERBkeBaF× RsukRsIsn§r extþkMBg;cam Santey Village, Prek Pou Commune, Srey Santhor District, Kampong Cham Province sUmTak;Tgelak ³ sux FavI Contact Person: Sok Theavy TUrs½BÞTMnak;TMng ³ 042 390 016 rW 012 441 973 Contact Phone: 012 441 973 / 042 390 016 GIuEml³ [email protected] Email: [email protected] Gnusaxa)aFay Sub branch Batheay Phaav Village, Phaav Commune, Batheay District, PUmip¥av XuMpa¥v Rsuk)aFay extþkMBg;cam Kampong Cham Province sUmTak;Tgelak ³ G‘av suPin Contact Person: Eav Sophin TUrs½BÞTMnak;TMng ³ 011 901 186 Contact Phone: 011 901 186 kariyal½yTMnak;TMngéRBRKI Service Ofﬁ ce Prey Kry PUmiéRBRKI XMuéRBRKIeCIg RsukClKIrI extþkMBg;qñaMg Prey Kry Village, Prey Kry Cheung Commune, Chol Kiri District, Kampong Chhnang Province sUmTak;Tgelak ³ em:A pløI Contact Person: Meou Pholly TUrs½BÞTMnak;TMng ³ 012 262 624¼ 026 393 902 Contact Phone: 012 262 624/ 026 393 902 Email: [email protected] Email: [email protected] saxat,ÚgXµúM Tbong Kmum branch PUmieCIgLg XMusYg Rsukt,ÚgXµúM extþkMBg;cam Cheung Lorng Village, Suong Commune, sUmTak;Tgelak ³ jwk b:UlI Tbong Khmum, Kampong Cham Province Contact Person: Nhek Poly TUrs½BÞTMnak;TMng ³ 042 390 013 rW 012 766 846 Contact Phone: 042 390 013/012 766 846 Email: [email protected] Email: [email protected] Gnusaxat,ÚgXµúM Sub branch Tbong Khmum PUmieCIgLg XMusYg Rsukt,ÚgXµúM extþkMBg;cam Cheung Lorng Village, Suong Commune, sUmTak;Tgelak ³ biul taMgeGg Thong Khmum distict, Kampong Cham Province Contact Person: Bel Taing Eng TUrs½BÞTMnak;TMng ³ 012 661 636 Contact Phone: 012 661 636 kariyal½yTMnak;TMngRtBaMgb£sSI Service Ofﬁ ce Tra Peng Reusey PUmiRtBaMgb£sSI XMurkarBR)aM Rsukt,ÚgXµúM extþkMBg;cam Trapeang Reusey Village, Roka Popram Commune, sUmTak;Tgelak ³ qy va:n;edt Tbong Khmum District, Kampong Cham Province Contact Person: Chhoy Vandet TUrs½BÞTMnak;TMng ³ 012 781 861 Contact Phone: 012 781 861 GnusaxaGUraMg« Sub branch Oraing Ov PUmielx3 XMuGMBiltaBk RsukGUraMg« extþkMBg;cam Lekh Bei village, Ampil Tapok Commune, sUmTak;Tgelak ³ Pin sarI Ouraing Ov District, Kampong Cham Province Contact Person: Phin Sary TUrs½BÞTMnak;TMng ³ 011 741 299 Contact Phone: 011 741 299 GnusaxaqøÚg Sub branch Chhloung PUmiekaHkNþþúr XMuuqøÚg RsukqøÚg extþRkecH Koh Kandaor Village, Chhloung Commune, sUmTak;Tgelak ³ XYn vNÑ³ Chhloung District, Kratie Province. Contact Person: Khuon Vannak TUrs½BÞTMnak;TMng ³ 011 754 503 Contact Phone: 011 754 503 GnusaxaBBaJaERkk Sub branch Ponheakraek PUmieBaF×Rsuk XuMekagkag RsukBjaERkk extþkMBg;cam Pou village, Kaong Kang commune, sUmTak;Tgelak ³ G‘ag éqlI Ponhea Kraek district, Kampong Cham province. Contact Person: Eang Chhaly TUrs½BÞTMnak;TMng ³ 012 597 784 Contact Phone: 012 597 784 saxaéRBEvg Prey Veng Branch

PUmi7 XMukMBg;lav RsukkMBg;lav extþéRBEvg Prampir village, Kampong Leav Commune, sUmTak;Tgelak ³ epg c½nÞTiva Kampong Leav District, Prey Veng Province TUrs½BÞTMnak;TMng ³ 043 944 508 rW 012 869 492 Contact Person: Pheng Chantivea Email:[email protected] Contact Phone: 012 869 492 / 043 944 508 Email: [email protected]

PRASAC Annual Report 06 45 GnusaxasaVyGnÞr Sub branch Svay Antor PUmieBaF×cinaþM XMusaVyGnÞr RsukéRBEvg extþéRBEvg Address: Pou Chendam Village, Svay Antor Commune, Prey Veng District, Prey Veng Province sUmTak;Tgelak ³ sux ful Contact Person: Sok Thol TUrs½BÞTMnak;TMng ³ 012 578 306 Contact Phone: 012 578 306 GnusaxakMcaymar Sub branch Kam Chay Mea Chou Ti Muoy Village, Kranhung Commune, PUmieCar¾TI1 XMuRkjÚg RsukkMcaymar extþéRBEvg Kam Chay Mear District, Prey Veng Provice sUmTak;Tgelak ³ rs; CIm Contact Person: Ros Chim TUrs½BÞTMnak;TMng ³ 043 399 055 rW 012 970 048 Contact Phone: 012 970 048 / 043 399 055 Email: [email protected] Email: [email protected] Service Offi ce Kanhchriech kariyal½yTMnak;TMngkeRBa¢óc Prongeuy Muoy Village, Thma Pun Commune, PUmiRBegIy1 XMufµBUn RsukkeBa¢óc extþéRBEvg Kanhchriech District, Prey Veng Province sUmTak;Tgelak ³ ehg eTOn Contact Person: Heng Toeurn TUrs½BÞTMnak;TMng ³ 012 677 186 Contact Phone: 012 677 186 Sub branch Neak Loeung GnusaxaGñkelOg Timuoy village, Prek Khsay Kha Commune, PUmimYy XMuERBkxSayx RsukBamrk¾ extþéRBEvg Peam Ro District, Prey Veng Province sUmTak;Tgelak ³ XI eson Contact Person: Khy Sean TUrs½BÞTMnak;TMng ³ 012 649 503 rW 043 393 952 Contact Phone: 012 649 503 / 043 393 952 Email: [email protected] Email:[email protected] Sub branch Baphnum Gnusaxa)aPñM Chheu Kach village, Chheu Kach Commune, PUmieQIkac; XMueQIkac; Rsuk)aPñM extþéRBEvg Baphnom, Prey Veng Province sUmTak;Tgelak ³ sux éh Contact Person: Sok Hay TUrs½BÞTMnak;TMng ³ 016 957 308 rW042 399 056 Contact Phone: 016 957 308 / 042 399 056 Email: [email protected] Email: [email protected] Service Offi ce Mesang kariyal½yTMnak;TMngemsag Vaing Village, Chithoch Commune, PUmivaMg XMuCIfuc Rsukemsag extþéRBEvg Mesang district, Prey veng Province sUmTak;Tgelak ³ sux suP½RK Contact Person: Sok Sopheak TUrs½BÞTMnak;TMng ³ 012 835 259 rW 042 399 056 Contact Phone: 012 835 259 or 042 399 056 Service Offi ce Preah Sdach kariyal½yTMnak;TMngRBHesþc Prey Meas Village, Angkor Reach Commune, PUmiéRBmas XMuGgÁrraCü RsukRBHesþc extþéRBEvg Preah Sdach district, Prey Veng Province sUmTak;Tgelak ³ swum mgÁl Contact Person: Sim Mongkul TUrs½BÞTMnak;TMng ³ 016 752 192 Contact Phone: 016 752 192 Sub branch Kampong Trabaek GnusaxakMBg;RtEbk Chambok Village, Prasat Commune, PUmicMbk; XMuR)asaT RsukkMBg;RtEbk extþéRBEvg Kampong Trabaek District, Prey Veng Province sUmTak;Tgelak ³ G‘u¿ GUn Contact Person: Um Aun TUrs½BÞTMnak;TMng ³ 016 741 041 Contact Phone: 016 741 041 saxakMBg;FM Kampong Thom Branch PUmiGacarülak; XMuGacarülak; RsuksÞwgEsn extþkMBg;FM Achar Leak Village, Achar Leak Commune, sUmTak;Tgelak ³ CUUUU suuxcMerIIn Stueng Sen district, Kampong Thom Province Contact Person: Chou Sok Chamroeun TUrs½BÞTMnak;TMng ³ 012 951 866 Contact Phone: 012 951 866 prasac091 @cammintel.com GIuEml ³ Email ³ prasac091 @cammintel.com

GnusaxasÞwgEsn Sub-branch Steung Sen PUmiGacarülak; XMuGacarülak; RsuksÞwgEsn extþkMBg;FM Address: Achar Leak Village, Achar Leak Commune, sUmTak;Tgelak ³ Ehm suxehOn Stueng Sen district, Kampong Thom Province TUrs½BÞTMnak;TMng ³ 012 406 486 Contact Person: Hem Sok Hoeun Contact Phone: 012 406 486 GnusaxakMBg;fµ Sub branch Kampong Thmor PUmiéRBtaRtav XMubl½gÁ Rsuk)arayN_ extþkMBg;FM Prey Tatrav Village, Ballangk Commune, sUmTak;Tgelak ³ Cwm esrI Baray district, Kampong Thom Province TUrs½BÞTMnak;TMng ³ 012 497 550 ¼062 399 081 Contact Person: Chim Serey Email: [email protected] Contact Phone: 012 497 550 / 062 399 081 Email:[email protected]

46 PRASAC Annual Report 06 kariyal½yTMnak;TMngrMlg Service Ofﬁ ce Rom Long salakhom village, Salakhom commune, PUmisalaXMu XMueRTól Rsuk)arayN_ extþkMBg;FM Baray district, Kampong Thom province. sUmTak;Tgelak ³ s‘¿u lwmeGOn Contact Person: Sum Lim Oeurn TUrs½BÞTMnak;TMng ³ 012 482 398 Contact Phone: 012 482 398 kMBg;qñaMg Kampong Chhnang Branch PUmiTYlRkLaj; XuMkMBg;qñaMg RsukkMBg;qñaMg extþkMBg;qñaMg Tuol Kralanh Village, Kampong Chhnang Commune, sUmTak;Tgelak ³ yI sUtara: Kampong Chhnang District, Kg. Chhang province Contact Person: Yi Sotara TUrs½BÞTMnak;TMng ³ 012 426 272 rW026 988 719 Contact Phone: 012 426 272 / 026 988 719 Email:[email protected] Email: [email protected]

Gnusaxarlaeb¥ór Sub Branch Roleaphie PUmiTYlRkLaj; XuMkMBg;qñaMg RsukkMBg;qñaMg extþkMBg;qñaMg Toul Kralanh Village, Kampong Chhnang Commune, sUmTak;Tgelak ³ G‘uk rI Kampong Chhnang District, Kampong Chhnang province TUrs½BÞTMnak;TMng ³ 012 993 387 Contact Person: Ouk Ry Contact Phone: 012 993 387

GnusaxabribUN¾ Sub branch Boribo PUmiBénø XMuBénø RsukbribUrN¾ extþkMBg;qñaMg Ponley Village, Ponley Commune, Baribo District, sUmTak;Tgelak ³ ELm sIuNa Kampong Chhnang province TUrs½BÞTMnak;TMng ³ 012 887 433 rW 052 399 023 Contact Person: Lem Sina Email: [email protected] Contact Phone: 012 887 433 / 052 399 023 Email:[email protected]

GnusaxakMBg;Elg Sub branch Kampong Leng PUmikMBg;bwg XMukMBg;hav RsukkMBg;Elg extþkMBg;qñaMg Kampong Boeng Village, Kampong Hav Commune, sUmTak;Tgelak ³ Gwug ecovKg; Kampong Leng District, Kampong Chhnang Province TUrs½BÞTMnak;TMng ³ 012 558 660 Contact Person: Ung Cheav Kong Contact Phone: 012 558 660

GnusaxakMBg;Rtlac Sub branch Kampong Tralach PUmitaGk XMuBanI RsukkMBg;Rtlac extþkMBg;qñaMg Ta Ak Village,Peani Commune, sUmTak;Tgelak ³ KuC tara Kampong Tralach District, Kampong Chhnang Province TUrs½BÞTMnak;TMng ³ 012 385 065 rW 026 393 922 Contact Person: Kuch Dara Email: [email protected] Contact Phone: 012 385 065 / 026 393 922 Email:[email protected] saxataEkv Takeo branch

PUmi2 XMurkakñúg RsukdUnEkv extþtaEkv Pir village, Rorkaknong Commune, sUmTak;Tgelak ³ Rss; PkþI Daunkeo District, Takeo Province TUrs½BÞTMnak;TMng ³ 012 472 455 rW 032 931 279 Contact Person: Sras Pheakdey Email: [email protected] Contact Phone: 012 472 455 / 032 931 279 GnusaxadUnEkv Email: [email protected] PUmi2 XMurkakñúg RsukdUnEkv extþtaEkv Sub branch Daun Keo Phum Pir village, Rokaknong Commune, sUmTak;Tgelak ³ Ém epg Daun Keo District, Takeo Province TUrs½BÞTMnak;TMng ³ 012 890 939 Contact Person: Em Peng GnusaxaKIrIvgS Contact Phone: 012 890 939 PUmikMBg; XMuRBH)aTCan;CMu RsukKIrIvg; extþtaEkv Sub branch Kirivong sUmTak;Tgelak ³ R)ak; ln; Kampong Village, Preah Bat Chan Chum Commune, Kirivong District, Takeo Province TUrs½BÞTMnak;TMng ³ 012 525 903 rW 032 399 036 Contact Person: Prak Lon Email: [email protected] Contact Phone: 012 525 903 / 032 399 036 GnusaxakMBg;éRC Email: [email protected] PUmikMBg;éRC XuMesaµg RsukRTaMg extþtaEkv Sub branch Kampong Chrey sUmTak;Tgelak ³ CYg sMeGOn Address: Kampong Chrey Village, Smaong Commune, Treang District, Takeo Province TUrs½BÞTMnak;TMng ³ 012 602 526 rW 032 399 033 Contact Person: Chuong Sam Oeun Email: [email protected] Contact Phone: 012 602 526 / 032 399 033 Email: [email protected]

PRASAC Annual Report 06 47 GnusaxaéRBkb,as Sub branch Prey Kabas PUmiéRBlaVekIt XMuéRBlaV RsukéRBkb,as extþtaEkv Prey Lvea Kaeut village, Prey Lvea Commune, Prey Kabbas District, Takeo Province sUmTak;Tgelak ³ GIu eyOn Contact Person: Y Yoeun TUrs½BÞTMnak;TMng ³ 012 500 823 rW 032 393 932 Contact Phone: 012 500 823 / 032 393 932 Email: [email protected] Email: [email protected] GnusaxaGgÁrburI Sub branch Angkor Borey Kampong Luong Village, Angkor Borey Commune, PUmikMBg;lYg XMuGgÁrburI RsukGgÁrburI extþtaEkv Angkor Borey District, Takeo Province sUmTak;Tgelak ³ GIu eyOn Contact Person: Y Yoeun TUrs½BÞTMnak;TMng ³ 012 500 823 Contact Phone: 012 500 823 Gnusaxa)aTI Sub branch Baty PUmisIha XMucMbk; Rsuk)aTI extþtaEkv Seiha Village, Chambak Commune, Baty District, Takeo Province sUmTak;Tgelak ³ Qun bu‘NaÑ Contact Person: Chhun Bunna TUrs½BÞTMnak;TMng ³ 012 931 908 rW 024 393 025 Contact Phone: 012 931 908 / 024 393 025 Email: [email protected] Email: [email protected] kariyal½yGgÁtaesam Service Ofﬁ ce Ang Tasom Ang Tasom Village, Ang Tasom Commune, PUmiGgÁtaesam XMuGgÁtaesam RsukRtaMkk; extþtaEkv Tramkak district, Takeo Province sUmTak;Tgelak ³ sYn yn; Contact Person: Suon Yon TUrs½BÞTMnak;TMng ³ 012 268 126 Contact Phone: 012 268 126 saxakNþal1 Kandal 1 Branch PUmiRkeBIha XMuERBkb¤sSI RsuktaexµA extþkNþal Krapeu Ha village, Prek Ruessey commune, sUmTak;Tgelak ³ s sari Takhmau, Kandal province Contact Person: Sar Sarik TUrs½BÞTMnak;TMng ³ 012 341 368 Contact Phone: 012 341 368

GnusaxaekaHFM Sub branch Koh Thom PUmiERBkfµI XuMERBkfµI RsukekaHFM extþkNaþl Prek Thmey Village, Prek Thmey Commune, sUmTak;Tgelak ³ Tin eRsOn Koh Thom District, Kandal Province TUrs½BÞTMnak;TMng³ 012 668 553 rW 024 399 036 Contact Person: Tin Sroeun Email: [email protected] Contact Phone: 012 668 553 / 024 399 036 Email: [email protected]

Gnusaxas¥ag Sub branch Saang PUmiERBkrun XMuERBkKy Rsuks¥ag extþkNaþl Prek Run Village, Prek Koy Commune, sUmTak;Tgelak ³ lwm lkçN¾ Saang District, Kandal Province TUrs½BÞTMnak;TMng ³ 012 622 398 rW 024 399 034 Contact Person: Lim Lakg Email: [email protected] Contact Phone: 012 622 398 / 024 399 034 Email: [email protected] GnusaxakNþalswÞg Sub branch Kandal Steung PUmisaVymIg XMu)arKU RsukkNaþlswÞg extþkNaþl Svay Ming village, Baku commune, sUmTak;Tgelak ³ Kg; TI Kandal Stueng, Kandal TUrs½BÞTMnak;TMng ³ 012 536 053 Contact Person: Kong Ty Contact Phone: 012 536 053

GnusaxaekonsVay Sub branch Kien Svay PUmiTYletñat XMuKKIr RsukekonsaVy extþkNaþl Tuol Tnaot village, Kokir commune, sUmTak;Tgelak ³ va: riT§I Kien Svay district, Kandal TUrs½BÞTMnak;TMng ³ 016 961 061 rW 024 399 054 Contact Person: Va Rithy Email:[email protected] Contact Phone: 016 961 061 / 024 399 054 Email: [email protected]

saxakNþal2 Kandal 2 Branch

pøÚvCatielx 5 PUmiTImYYy sgáat;RcaMcMerH x½NÐb£sSIEkv RkugPñMeBj National Road Nº 5, Timuoy village Chrang Chamras, sUmTak;Tgelak ³ QMu Rsug Reusey Keo district, Phnom Penh TUrs½BÞTMnak;TMng ³ 012 507 092 rW 011 887 894 Contact Person: Chhoum Srong Contact Phone: 012 507 092 or 011 887 894

48 PRASAC Annual Report 06 Sub branch Bekchan GnusaxaEbkcan Chong Bangkoul village, Baek Chan commune, PUmicugbegÁal XMuEbkcan RsukGgÁsñÜl extþkNþal Angk Snuol district, Kandal sUmTak;Tgelak ³ CYb vasna Contact Person: Chuob Veasna TUrs½BÞTMnak;TMng ³ 012 675 513 rW 023 355 044 Contact Phone: 012 675 513 / 023 355 044 Email: [email protected] Email: [email protected]

Sub branch Prek Kdam GnusaxaERBkkþþþam Tuol Ngouk village, Kampong Luong commune, PUmiTYlegak XMukMBg;lYg RsukBjaB¤ extþkNaþl Pongea Lueu ditrict, Kandal sUmTak;Tgelak ³ san suvuDÆI Contact Person: San Sovuthy TUrs½BÞTMnak;TMng ³ 012 253 971 rW 024 399 024 Contact Phone: 012 253 971 / 024 399 024 Email: [email protected] Email: [email protected] GnusaxamuxkMBUl Sub branch Prek Anchanh PUmieRkam XMuERBkGBaa©j RsukmuxkMBUl extþkNaþl Kraom village, Prek Anchanh commune, Mukh Kampul district, Kandal Province sUmTak;Tgelak ³ ehg Kn§I Contact Person: Heng Khunthy TUrs½BÞTMnak;TMng ³ 012 507 092 Contact Phone: 012 507 092 GnusaxakMBg;BBil Sub branch Kampong Popil PUmikMBg;BBil XMukMBg;BBil RsukBaraMg extþéRBEvg Kampong Popil village, Kampong Popil commune, sUmTak;Tgelak ³ Ém supl Pea Reang district, Prey Veng. Contact Person: Em Sophol TUrs½BÞTMnak;TMng ³ 012 773 285 rW 032 399 053 Contact Phone: 012 773 285 / 032 399 053 Email: [email protected] Email: [email protected] kariyal½yTMnak;TMngBaraMg Service Ofﬁ ce Pea Reang PUmisañyBl; XMurkar RsukBaraMg extþéRBEvg Snay Pol Village, Roka Commune, sUmTak;Tgelak ³ san PkþI Pea Reang District, Prey Veng Province TUrs½BÞTMnak;TMng ³ 012 643 634 Contact Person: San Pheakdey Contact Phone: 012 643 634 saxakMBg;sW< Kamopong Speu branch

PUmisMNg; XMurkarFM Rsukc,armn extþkMBg;sChbar Mon District, Kg Speu Province TUrs½BÞTMnak;TMng ³ 012 992 006 rW 025 987 399 Contact Person: Tea Vanna Email: [email protected] Contact Phone: 012 992 006 / 025 987 399 Email: [email protected]

Gnusaxac,armn Sub branch Chbar Morn PUmisMNg; XMurkarFM Rsukc,armn extþkMBg;sKampong Speu Province TUrs½BÞTMnak;TMng ³ 016 707 104 Contact Person: Im Buntha Contact Phone: 016 707 104 Gnusaxa]dugÁ Sub branch Oudong PUmi)at;dwg XMuekSmkSanþ Rsuk]dugÁ extþkMBg;sThpong district, Kampong speu province TUrs½BÞTMnak;TMng ³ 012 400 412 Contact Person: Ten Eath Contact Phone: 012 400 412 GnusaxaKgBisI Sub branch Kong Pisey PUmiRtaMxñar/XMusñMRkeBIr/RsukKgBisI/extþkMBg;s

PRASAC Annual Report 06 49 saVyerog Svay Reing Branch PUmieKonsaMg XMusVayerog RsuksaVyerog extþsaVyerog Kien Sang Village, Svay Rieng Commune, sUmTak;Tgelak ³ RBab eha Svay Rieng District, Svay Rieng Province Contact Person: Preap Hor TUrs½BÞTMnak;TMng ³ 012 739 716 044 715 051 Contact Phone: 012 739 716 / 044 715 051 Email: [email protected] Email: [email protected]

GnusaxasaVyRCM Sub branch Svay Chrum PUmitab: XMutasYs RsuksaVyRCM extþsaVyerog Ta Pa Village, Tasuos Commune, Svay Chrum District, Svay Rieng Province sUmTak;Tgelak ³ Ekv suKna§ Contact Person: Keo Sokunthea TUrs½BÞTMnak;TMng ³ 016 732 077 Contact Phone: 016 732 077

GnusaxasVayTab Sub branch Svay Teap PUmiTYlGMBil XMuRckemÞs RsuksaVyTab extþsaVyerog Toul Ampil Village, Chrak Mtes Commune, Svay Teab District, Svay Rieng Province sUmTak;Tgelak ³ esam sutßa Contact Person: Som Sotha TUrs½BÞTMnak;TMng ³ 011 633 145 Contact Phone: 011 633 145

kariyal½yTMnak;TMngRbsUt Service Ofﬁ ce Bror Sout PUmiRtEdt XMuRBHBnøa RsukkMBg;eraT× extþsaVyerog Tradaet Village, Preah Ponlea Commune, Kampong Rou District, Svay Rieng Province sUmTak;Tgelak ³ san; TItU Contact Person: Sann Tito TUrs½BÞTMnak;TMng ³ 012 736 772 Contact Phone: 012 736 772 GnusaxarmasEhk Sub branch Romeas Hek PUmikMBg;Rtac XMukMBg;Rtac RsukrmasEhk extþsaVyerog Kampong Trach Village, Kampong Trach Commune, Ro- meas Haek District, Svay Rieng Provice sUmTak;Tgelak ³ Eb:n suKn§a Contact Person: Pen Sokunthea TUrs½BÞTMnak;TMng ³ 012 424 838 Contact Phone: 012 424 838 kariyal½yTMnak;TMngcRnþIy_ Service Ofﬁ ce Chann Trey Chann Trey Village, Chann Trey Commune, PUmicRnþIy_ XMucRnþIy_ RsukrmasEhk extþsaVyerog Romeas Heak District, Svay Rieng Province sUmTak;Tgelak ³ CMu suxa Contact Person: Chhoum Sokha TUrs½BÞTMnak;TMng ³ 012 322 080 Contact Phone: 012 322 080 saxakMBt Kampot Branch PUmiéRBRklaxaglic XMuTUkmasxaglic RsukbnaÞymas extþkMBt Prey Krala Khang Lech Village, Touk Meas Khang Lech sUmTak;Tgelak ³ Ej:t riT§ Commune, Banteay Meas District, Kampot Province Contact Person: Nhet Rith TUrs½BÞTMnak;TMng ³ 012 423 125 rW 033 393 971 Contact Phone: 012 423 125 / 033 393 971 Email: [email protected] Email: [email protected]

GnusaxabnÞaymas Sub branch Banteay Meas PUmiéRBRklaxaglic XMuTUkmasxaglic RsukbnaÞymas extþkMBt Prey Krala Khang Lech Village, Touk Meas Khang Lech Commune, Banteay Meas District, Kampot Province sUmTak;Tgelak ³ sM RTI Contact Person: Sam Try TUrs½BÞTMnak;TMng ³ 012 299 406 rW 033 393 971 Contact Phone: 012 299 406 or 033 393 971 GnusaxaQUk Sub branch Chhouk Krasang Village, Chhuk Commune, Chhuk District, PUmiRksaMg XMuQUk RsukQUk extþkMBt Kampot Province sUmTak;Tgelak ³ Kun suxnbBØaa Contact Person: Kun Sokhornpagna TUrs½BÞTMnak;TMng ³ 012 562 420 Contact Phone: 012 562 420

Sub branch Kampong Trach GnusaxakMBg;Rtac Kampong Trach Ti Mouy village, PUmikMBg;RtacTI1 XMukMBg;RtacxagekIt RsukkMBg;Rtac extþkMBt Kampong Trach Khang Khoeut commune, sUmTak;Tgelak ³ suT§ sMNag Kampong Trach district, Kampot province. TUrs½BÞTMnak;TMng ³ 011 654 529 Contact Person: Suth Samnang Contact Phone: 011 654 529

GnusaxaGgÁrC½y Sub Branch Angkor Chey PUmieBaF× XMuPñMkug RsukGgÁrC½y extþkMBt Pou Village, Phnumkong Commune, Angkor Chey District, Kampot Province sUmTak;Tgelak ³ Tit suxCa Contact Person: Tith SokChea TUrs½BÞTMnak;TMng ³ 012 607 942 Contact Phone: 012 607 942

50 PRASAC Annual Report 06 eBaFisat; Pursat Branch PUmiman;Ec XMuéRBjI RsuksMeBAmas extþeBaFisat; Moan Chae Village, Prey Nhi Commune, Sampov Meas District, Pursat Province sUmTak;Tgelak ³ nag sIuNar:an; Contact Person: Neang Sinarann TUrs½BÞTMnak;TMng ³ 012 867 602 rW 052 951 081 Contact Phone: 012 867 602 / 052 951 081 Email:[email protected] Email: [email protected] GnusaxaeBaFisat; Sub branch Pursat Moan Che Village, Prey Nhi Commune, PUmiman;Ec XMuéRBjI RsuksMeBAmas extþeBaFisat; Sampov Meas District, Pursat Province sUmTak;Tgelak ³ Duc suvNÑriT§ Contact Person: Duch Sovanrith TUrs½BÞTMnak;TMng ³ 012 400 561 Contact Phone: 012 400 561 GnusaxaRkKr Sub branch Krakor Phsar Village, Phsar Commune, PUmipSar XMupSar RsukRkKr extþeBaFisat; Krakor District, Pursat Province. sUmTak;Tgelak ³ sux Bisidæ Contact Person: Sok Pisith TUrs½BÞTMnak;TMng ³ 012 200 072 rW 052 399 082 Contact Phone: 012 200 072 / 052 399 082 Email: [email protected] Email: [email protected]

Gnusaxa)akan Sub branch Bakan PUmibwgxñar XMubwgxñar Rsuk)akan extþeBaF×sat; Boeng Khnar Village, Boeng Khnar Commune, Krakor District, Pursat Province. sUmTak;Tgelak ³ ehg suvNÑa Contact Person: Heng Sovanna TUrs½BÞTMnak;TMng ³ 092 576 474 Contact Phone: 092 576 474

LAOS THAILAND

Oddor Meanchey

Preah Vihear Banteay Stung Treng Ratanak Kiri Meanchey Siem Reap

To n le S a Battambang p

La Pailin k e Kampong Kratie Thom Modul Kiri

Pursat Kampong Chhnang Kampong Cham PHNOMPHNOM PENHPENH Prey Veng Koh Kong Kampong Speu Kandal VIETNAM Svay Reing Takeo Kampot Sihanouk Ville Gulf of Thailand Prospective Operational Area Operating Area

Highlight Operations Area: Branch offi ce: 12 Province: 12 Communes: 826 Sub branch offi ce: 44 District: 89 Villages: 5,363 Service offi ce: 14

PRASAC Annual Report 06 51 THE HIGHLIGHTS OF THE TRANSFORMATION FROM PRASAC PROJECT TO PRASAC MFI 2006 The commercialization process by seeking equity investment participation from commercial and social investor. 2005 The credit fund was transferred from EC to the government and fi nally to PRASAC MFI as Subordinated Debts with interest free, valid from December. 04. 2004 Registered with MoC as limited liability Company and received license from the NBC in November 2004 to operate as a licensed MFI. 2003 A Trust Fund called CRDF and PRASAC Staff Company were created to facilitate the transformation as temporary owners. 2002 Creation of PRASAC Credit Association (PCA), registered with the NBC as Rural Credit Operator in March 2002 with separate accounts, separate HO and fi eld offi ces, own Supervising Committee and Management. 2000 Combined to one in PRASAC II with one management. Early strategic decision to create a sustainable institution beyond closure of project. Mrs. Sum Sokhourn, PRASAC client at the National Submitted on the Microfi nance of Cambodia 2006 1995~1999 Was Credit Component of PRASAC Project with three Different managements during PRASAC I. 52 PRASAC Annual Report 06 It’s the small things that grow into the big ones. PRASAC. PRASAC MICROFINANCE INSTITUTION Head Offi ce: 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] www.prasac.com.kh