Japan's 1st microfinance fund to be set up to assist loans in Cambodia

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TOKYO, Aug. 22 Kyodo -
A Japanese music production and fund management company plans to create a
microfinance investment fund worth up to 50 million yen, the first of its kind
in Japan, to support farmers and businesses in Cambodia, company officials said
Saturday.
Music Securities Inc., based in Tokyo, will start accepting money for the fund
from individual investors mainly via the Internet by the end of this month, the
officials said. Investments will be made in increments of 30,000 yen.
The fund will then invest in Cambodia's CHC Ltd., a Phnom Penh-based
microfinance institution, which will extend loans to domestic farmers and
businesses, the officials said. CHC will rename itself SAMIC in November.
The new fund was initially organized by Living In Peace, a nonprofit
organization established in 2007 to help promote international development
assistance, and the NPO asked Music Securities to manage the fund because an
NPO is not allowed to deal with financial products.
Such a fund ''is not a donation but an investment. We want investors to
maintain an interest in how their investments will be used for poverty
eradication,'' said Akiko Sugiyama, an official at Music Securities'
securitization division.
Investors in the fund will receive returns after three years, the officials said.
If the earnings performance of CHC remains at the current level over the next
three years, the new fund will have an annual return of 2.8 percent before tax,
the officials said. But investments could fall below initial value depending on
CHC's performance and foreign exchange rate fluctuations, they said.
Microfinance is the brainchild of Bangladeshi economist Muhammad Yunus, who won
the 2006 Nobel Peace Prize for his efforts to eradicate poverty with the
lending method. Many borrowers use their loans to start up small businesses,
find ways to secure sources of income and escape poverty.
==Kyodo
2009-08-22 23:25:26