Cambodia microfinance association
Amid credit expansion, Riel loans minimal
Cambodia’s credit sector is expanding rapidly with the central bank saying now is the time to start infusing the market with riel and begin a process of de-dollarization in the country’s economy. But as the growth of dollarized loans outstrips those in riel, disbursing credit in the local currency will require a big rethink from both lenders, borrowers and the national bank, experts said this week.
At a conference earlier this month, the National Bank’s director of economic research said that more credit in riel would start to reduce the market’s dependence on the U.S. dollar. But the use of riel remains stagnant, and only a fraction of loans being disbursed are in the local currency. …
George Styllis and Kang Sothear
Big strides for savings in MFIs
Microfinance deposits are on the rise, a positive trend that the industry says is moving the country towards a reduced dependency on foreign funding and that will eventually lead to greater control over interest rates.
The seven microfinance institutions licensed to take deposits collected $209 million from January to June this year, a 35 per cent increase from $154 million in same period last year, according to a report from the Cambodia Microfinance Association (CMA) and obtained by the Post yesterday. …
ANZ, MFI partner to bridge financial sectors
ANZ Royal Bank and local microfinance institution Hattha Kaksekar Limited (HKL) on Monday entered into the first partnership of its kind in Cambodia in a bid to bring together clients from either side of the financial spectrum.
Following the signing of a Memorandum of Understanding at the Sofitel Phokeetra Hotel, ANZ Royal CEO Grant Knuckey said the partnership, between a commercial bank and microfinance institution, will facilitate transactions between clients and give ANZ a greater presence outside cities. …
New MFI in town, ‘more still needed’
ORO Financecorp Plc held its official launch on Friday, joining the growing ranks of microfinance institutions in the Kingdom.
ORO Financecorp started providing business, agricultural and tractor loans in January with a $4 million capital investment from Seng Enterprise Co Ltd of Cambodia and Creed Asia Investment Ltd of Japan. …
Foreign currency deposits see strong growth
Foreign currency deposits grew briskly during the first four months of the year, a sign that public confidence in Cambodia’s financial institutions is high despite the uncertainty after last year’s disputed national election, bankers said this week.
Cheam Teang, executive vice president of Acleda Bank Plc. said the bank’s foreign currency deposits increased more than 85 percent year-on-year—from $120 million in the first four months of 2013 to $225 million during the same period this year. The main currencies being deposited are U.S. dollars and Thai baht. …
At Malaysian-owned CIMB Cambodia Bank, foreign currency deposits grew from $153 million in the first four months of 2013 to $221 million in the first four months of this year, according to Heng Vuthy, the bank’s head of strategy and finance. …
Bun Than, CFO of Sathapana Limited, a member of the Cambodia Microfinance Association and one of the seven microfinance institutions that accept deposits, said foreign currency deposits are flowing in at a faster pace.
The MFI saw a 27.5 percent increase in the first four months from $80 million in 2013 to $102 million in 2014.
Jayant Menon, lead economist at the Asia Development Bank’s regional economic integration office, said an increase in foreign currency deposits can be beneficial for the economy if properly monitored.
“An increase in the money supply can spur demand and spending, which can boost growth, but can also lead to inflationary pressures if left unchecked,” he said. …
Staff poaching spurs bank action
Cambodia’s banking sector is looking to establish a collective fund to help recoup staff training expenses lost from competitors poaching employees off one another, Grant Knuckey, CEO of ANZ Royal said yesterday.
Speaking at the launch of ANZ Royal’s business confidence index in Phnom Penh yesterday, Knuckey, who is also the chairman of the education working group at the Association of Banks in Cambodia (ABC), said to mitigate the losses of newly trained employees, the industry was proposing a joint fund in which poachers would have to contribute a percentage of the lost employees’ salaries. …
Eddie Morton and Daniel de Carteret
Housing loans up in 2013, growth expected to continue in ’14
Last year across Cambodia’s cities, more and more people decided to take the plunge and invest in housing.
This should be obvious to anyone who lived in Cambodia last year. The sounds of construction or renovation were more noticeable than before in cities across the Kingdom.
Data from Cambodia’s largest commercial bank backs up this anecdotal evidence. The total amount of loans provided by ACLEDA Bank for housing purchases in 2013 was up nearly 15 per cent year-on-year, breaking the $100 million mark for the first time.
ACLEDA Bank senior vice-president and credit division director Inn Siphann told the Post that housing loans in 2013 totaled $107.3 million, up 14.6 per cent over 2012’s $93 million.
There was also a considerable increase in lending by ACLEDA for home improvements, Siphann said. In 2013 the lender provided $57.7 million in home improvement loans, compared with $45 million the previous year, translating into an increase of 28.2 per cent, he added. …
Micro-insurance needs revamp: UN
The UN urged government and financial organisations to stimulate Cambodia’s flailing micro-insurance industry yesterday, after a study found the country’s poor are vulnerable to indebtedness during a crisis.
The United Nations Development Business (UNDB) hosted a working group yesterday at Phnom Penh’s Sunway Hotel launching the study, which highlighted Cambodia’s need for a more comprehensive micro-insurance industry.
Of the 302 responses from people in Kandal, Kampong Cham and Kampong Thom provinces considered in the study, 97 per cent said they often faced risks including illness, drought, flood, death of a household member and crop damage.
Nearly 90 per cent reported illness as the most common risk they face, while 49 per cent named crop failure resulting from drought or flood as the most common.
Just 17 per cent were current micro-insurance clients while 70 per cent said they were former micro-insurance customers but discontinued their policy due to inflexible payment options and complicated policy documents.
According to the findings, 78 per cent of the respondents said they were willing to pay premiums “to a third party” of up to $15 per year in order to curb the financial risks they face on a daily basis. …
Cambodians owed almost $1.2 billion to the country’s 35 microfinance institutions at the end of September, according the Cambodia Microfinance Association, with about 30 per cent for agricultural production. …
Debtors need mercy: CNRP
The opposition party has called on microfinance institutions to renegotiate payment terms with flood-affected loan holders.
This year’s floods have affected 20 provinces and more than 1.7 million people, with 31,314 households evacuated, according to the Humanitarian Response Forum.
The Cambodia National Rescue Party has asked that institutions lower interest rates to 1 per cent for a year, and waive repayments and land and asset foreclosures for six months.
In a party report on post-flood indebtedness due to be released today, the CNRP says those seriously affected by floods should be allowed to rebuild their livelihoods without the burden of loan repayments. …
CNRP public affairs head Mu Sochua said the opposition was not proposing “writing a blank cheque” to all families, but just to those most at risk, such as the estimated 20 per cent who live below the poverty line. …
Cambodia’s micro-lenders report 33 pct loan growth in 9 months
Cambodia’s 35 microfinance institutions had lent $1.18 billion to their customers by the end of September this year, a 33 percent rise from $890 million at the end of last year, a report of the Cambodia Microfinance Association (CMA) said Friday.
On the deposit side, the customers’ deposits at microfinance
institutions had reached $365 million at the end of September this year, up 30 percent from $280 million at the end of last year, the report said. …
Some 1.49 million people have borrowed money from the microfinance institutions as 880,000 have deposited their money in the institutions, it added. …
Global Times News Staff
MFI loans, deposits continue to increase
Both outstanding loans and savings deposits in 35 microfinance institutions (MFIs) continued to grow from January through to June this year, according to the latest report from the Cambodia Microfinance Association (CMA).
By the end of the first half of this year, total loans from MFIs reached $1.08 billion, up from $808 million at the end of 2012. Deposits in the seven microfinance institutions licensed to take them grew to $377.7 million, up from $224.7 million at the end of the last year. …
Out of the total $1.08 billion in outstanding loans, the report shows that the microfinance institution Prasac provided $301 million, Amret microfinance $174 million and $139 million came from Sathapana Limited. Hathakasekar Limited lent $113 million of the total, and AMK, the fifth largest institution, put out $69 million. …
Informal lending still thriving
The expanding banking sector and the spread of microfinance institutions (MFIs) in rural areas have failed to elbow informal, unlicensed money lending out of the market, industry experts say.
Fast and easy access to money – as well as the fear of “losing face” by borrowing in public – are contributing factors keeping the sector afloat, especially in rural areas. …
Loan portfolios of the 35 registered MFIs and four NGOs that are members of the Cambodia Microfinance Association reached $1 billion at the end of the first quarter, a 41 per cent increase from the same period last year. …
But even with banks and microfinance giving informal lending a run for its money, five out of 10 Cambodian households that have at some stage borrowed money still access informal sources of credit, according to a study of rural and urban consumers conducted in June by Indochina Research. …
Chandararot from the Cambodia Institute of Development Study scoffs at the idea of going after the sector.
It poses “no risk to the economy and can make a financial system more flexible to demand,” he says. “Informal money lending is still filling a gap that formal institutions have not reached.” …
Instalment payments for goods gaining purchase
AEON Microfinance (Cambodia) Co, part of Japan-based AEON Group, said sales by instalment for electrical appliances and motorbikes increased by 715 per cent in the first quarter of 2013 year on year, a trend industry experts say will grow further with increasing demand for electronics.
Started in December 2011, loan disbursement reached $2.5 million with 5,000 new customers in the first quarter of this year, compared to $343,000 in the same period of 2012, managing director Daisuke Maeda told the Post yesterday.
“Smartphones and PCs are the most popular, followed by motorbikes,” he said. …
The total loan portfolio of AEON Microfinance (Cambodia) at the end of the first quarter this year was about $4 million, with 6,500 customers, Daisuke Maeda said. …
New MFI To Launch Operations
A new microfinance institution (MFI), ORO Financecorp Plc, is set to open in Cambodia, according to the director-general of the National Bank of Cambodia (NBC). …
Cambodia already has 35 registered MFIs, according to a recent report by the Cambodia Microfinance Association (CMA). …
Last week, the Post reported that the loan portfolios of the 35 registered MFIs and four NGOs that are members of the CMA reached $1 billion at the end of March, a 41 per cent increase from the same time last year. …
Anne Renzenbrink and Low Wei Xiang
Cambodia’s micro-lenders record 24 pct lending growth in Q1
Cambodia’s 35 microfinance institutions had lent 1 billion U.S. dollars to customers by the end of March this year, up 24 percent from 808 million U.S. dollars it lent at the end of last year, the data of Cambodia Microfinance Association (CMA) showed Wednesday.
On the deposit side, the customers’ deposits at microfinance institutions had amounted to 346 million U.S. dollars at the end of March this year, up 54 percent from 225 million U.S. dollars at the end of last year, the data said. …
Asean-China-Center News Staff
Huge Increase in MFI Loans, Deposits
More economic activity and a better understanding of using formal financial services among rural residents are leading to good loan performance rates and increases in savings deposits in Cambodia’s microfinance industry, according to industry sources.
The loan portfolios of the 35 registered microfinance institutions (MFI) and four NGOs that are members of the Cambodia Microfinance Association (CMA) reached $1 billion at the end of March, a 41 per cent increase from a year earlier, according to recent figures from the CMA.
Deposits made at seven microfinance institutions that are licensed to take deposits (MDIs) reached $346 million, a 145 per cent increase over the past 12 months. …
Loans and deposits climb
Loans and deposits at Cambodia’s 32 micro-finance institutions and four NGOs, as well as small loans from Acleda Bank, rose sharply last year compared with a year earlier.
Industry players say this is a result of the Kingdom’s rapid economic improvement and political stability.
Official data from the Cambodia Microfinance Association (CMA) shows the value of loans outstanding rose about 38 per cent to $890 million in 2012, compared with $644.6 million in 2011. …
In early January, the International Monetary Fund highlighted Cambodia’s high domestic credit growth, which the IMF considered a risk, but officials and industry insiders raised no concerns about it last week. …
Microfinance: an insider’s view
The story of Cambodia’s microfinance sector has been one of successful evolution, evidenced by the growing number of lenders and their continual development. Many microfinance institutions (MFIs) started as NGO-like entities, but the industry has come a long way. Today, there are 32 MFIs licensed by the National Bank of Cambodia (NBC). Their operations cover 24 provinces and cities and as of June, the total outstanding loan portfolios was US$733 million. …
Tim Vutha, P. 23
Credit Bureau Begins Operations in Cambodia
The long-awaited Cambodian Credit Bureau (CBC) launched yesterday, a move that is expected to increase the amount of information banks retain on the history of borrowers in the banking system.
Despite loan disbursals in the banking sector growing by 25 percent last year, banks have so far struggled to gain reliable information on individuals and businesses looking for credit.
But the credit bureau could help change that by recording the information on all current and future borrowers and making it available to banks.
Steve Vaile, a consultant with the CBC, said that the bureau would allow banks and microfinance institutions to benefit from reduced credit risk. “As of today, we are already taking requests in our systems, and people are running credit reports,” he said. …
The CBC, a joint venture between the Association of Banks in Cambodia, the Cambodia Microfinance Association and Veda Advantage, an information technology firm based in New Zealand, officially registered with the government in December. Under a government proclamation, all banks and MFIs must provide the CBC with information about all of their borrowers. …
Philip Heijmans, P.21
MFI survey claims debtor success
A survey by Cambodian microfinancers showed debtors were better off in several respects than those who didn’t borrow from the institutions, MFI officials claimed.
Responding to recent concerns over the role of microfinance institutions in creating poverty and loss of property in the Kingdom, the Cambodia Microfinance Association on Friday released a study that showed positive outcomes for borrowers in changes in income, assets and the empowerment of women, among others.
The Cambodia Institute of Development Study, an independent institution, surveyed 1,876 MFI clients, 568 non-clients, and 533 former clients in 15 provinces during the first nine months of 2011…Source: www.opendevelopmentcambodia.net
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