The Issue
Cashew farms in Cambodia usually face difficulty in accessing the market and getting good prices for their produce. Due to limited bargaining power, lack of capital, and weak market linkages, many farmers rely on informal traders who offer fluctuating and often low prices. As a result, farmers struggle to secure sustainable incomes despite the growing demand for cashew nuts in domestic and international markets.
The Project
The proposed project aims at strengthening agricultural cooperatives (ACs) so that they can play a more active role in supporting their members, particularly smallholder cashew farmers.
Through improved access to capital from banks or microfinance and enhancing cooperative management capacity in cashew trading, cooperatives would be able to engage directly in cashew nut aggregation and trading, improving market access and pricing for farmers.
To pilot a sustainable financing model for agricultural cooperatives, the project will apply a blended finance mechanism that combines donor grant support as collateral to guarantee commercial lending from AMK Bank Plc.
Under this approach, DCA will provide a seed grant to our implementing partner Action for Development (AFD), who will then use this grant as collateral with the bank to unlock commercial loans for two ACs: Sakream Rung Roeurng AC and Sakream Amatak AC. The ACs will be guided on how to conduct quality checks and bookeeping.
Loan funds will be used for purchasing raw cashew nuts from farmers and then selling it to Olam company. It will also support local shipping and logistics in the community. To ensure sound financial management, the cooperatives will prepare clear operational and financial plans for loan utilization. Based on these plans, they will withdraw funds from their bank accounts only when necessary, reducing financial risk and minimizing interest payments.
The Change
Through an improved access to finance of agricultural cooperatives, the project will create employment and secure a better market for cashew farmers.
The Result
- Two agricultural cooperatives received loan from AMK Bank Plc. to start cashew nut trading
- At least 150 farmers directly benefit from collective cashew trading in the pilot phase
- Two ACs have increased capacity in business and strengthened market lingkages with trusted private actor partners and buyers
About the project
Full title: Blended Finance for AgriCoop (BFAC)
Period: March 2025 to December 2026
Partner: Action for Development
Funding: USD 25,527
People reached: 150 farmers
Main Donors: DANIDA
