Thaneakea Phum Microfinance Institution has signed a US$2.71 million loan guarantee agreement with the US Agency for International Development to provide further assistance to the agriculture sector, officials said.

Under the four-year agreement, USAID will guarantee loans for up to 50 per cent of the original amount in the case of default, said Sok Voeun, TPMI’s chief operation officer.

“They will support us in providing more loans to the agriculture sectors in the four provinces [Kampong Thom, Pursat, Battambang and Siem Reap]. If a loan within $2.71 million runs into a problem, they will help us by guaranteeing to pay 50 per cent,” he said.

US Embassy Chargé d’Affaires Jeff Daigle in a statement said: “The American people are proud to encourage private-sector lending in Cambodia to support rural agriculture. This is vital to fostering economic development and strengthening rural livelihoods in the country.”

TPM’s loan portfolio increased about 40 per cent this past year, going from $22 million in 2010 to $33.15 million by December 2011, according to Sok Voeun.