MAGS Process Flow
Modern Agricultural Cooperative Guarantee Scheme
The Modern Agricultural Cooperative Guarantee Scheme (MAGS) is a government-supported initiative designed as a strategic policy instrument to facilitate the establishment and growth of modern agricultural cooperatives in Cambodia. Jointly implemented by the Ministry of Agriculture, Forestry and Fisheries (MAFF), the Participating Financial Institutions, and the Credit Guarantee Corporation of Cambodia (CGCC).
Benefits of MAGS
- Enhance financial inclusion and support agricultural productivity by facilitating access to formal credit for cooperatives.
- Provides financial support for working capital and business expansion to enhance the sustainability and competitiveness of the cooperatives.
MAGS Scheme Features
Eligible Borrower
Type of Borrower
- Individual/legal entity that meet the following criteria:
- Individual: must be Cambodian
- Legal entity: Cambodia-owned business (>50% shares by Cambodian or Cambodian Entity)
- Must be a modern agriculture cooperative - Having business plan approved by MAFF
Borrower as Legal Entity
- Require for personal guarantor (all shareholders owning at least 10% share must be personal guarantors)
Age of Borrower
- Individual: The main borrower or co-borrower must not be more than 70 (seventy) years old at the loan’s maturity date.
- Legal Entity: At least one shareholder owning at least 10% share and authorized representative must not be more than 70 years old at the loan’s maturity date.
Borrower’s Business Registration
- Required
Financially Viable
- All borrowers must be financially viable.
Disbursement Condition
- To be disbursed into Modern Agricultural Cooperative’s designated accounts.
Post-disbursement Conditions
- After loan disbursement:
- 1. PFIs must conduct site inspections and submit reports to CGCC every six months on:
- Loan utilization to ensure guaranteed loans are used for the intended purposes.
- Expense documents verification and assessment on business operation of the Modern AC.
- 2. MAFF shall continue to support Modern ACs to ensure strong governance, effective management, and clear business planning.
- 3. Modern AC shall:
- Seeking approval from MAFF’s representative for all expenses related to Modern AC’s operation.
- Properly keep or record all expense documents such as supplier invoice or receipt payment.
Other Requirements
- 1. Supporting letter from MAFF
- MAFF shall issue supporting letter for Modern AC confirming Modern AC profile and financial figures.
- 2. Business Plan (BP)
- A Business Plan of Modern AC shall be developed and approved by MAFF.