CAC News

Phnom Penh—The Cashew Nut Association of Cambodia (CAC) has signed a Memorandum of Understanding (MoU) with AMK Microfinance Institution to expand access to financing for farmers, agricultural cooperatives, and processors across the country’s cashew sector.

Signed in late 2023, the agreement aims to provide preferential loans covering cashew cultivation, trade, and processing. The initiative is designed to ease long-standing capital constraints in the sector and strengthen linkages between farmers, cooperatives, and processors.

Following recent field visits to 16 agricultural cooperatives, AMK reaffirmed its commitment to providing working capital to cooperatives to purchase cashews for supply to processors. Under the arrangement, processors may also access financing directly to buy raw cashews from cooperatives and individual farmers.

Notably, AMK does not impose a minimum loan amount, instead tailoring credit to the actual needs of borrowers. In a significant departure from traditional lending practices, the loans do not require land titles or property as collateral.

Flexible Financing Model

Under the financing mechanism, credit is released based on real transactions and inventory movement. For example, if a processor plans to stockpile 1,000 tons of cashews but lacks sufficient liquidity, AMK can finance purchases through partner cooperatives. Once the processor submits invoices confirming that cashews have entered its warehouse, AMK disburses payments directly to the cooperatives on the processor’s behalf. Funding is released incrementally as stock accumulates, until the full target volume is reached.

The processor’s repayment schedule is then calculated based on subsequent processing and sales to buyers.

Support for Cooperatives During Harvest Season

Agricultural cooperatives can also apply for collateral-free loans during the harvest season, which runs from February to May, to purchase raw cashew nuts for resale to warehouses. To qualify, cooperatives must have a guaranteed buyer or clear purchase contract, demonstrate prior experience in the cashew trade, and ensure that board members or representatives possess sufficient expertise in purchasing and quality assessment to reduce risk.

Encouraging Message to Processors

The CAC and AMK say the partnership opens new opportunities for cashew processors who previously struggled with limited capital. According to the institutions, processors with as little as USD 100,000 in initial capital may now be able to stockpile 1,000 tons of cashews or more through the new financing structure.

AMK has already begun working with several agricultural cooperatives and is calling on others in the sector to prepare for the upcoming cashew season and take advantage of the new financing opportunities.