Loans at MFIs Grow to Surpass US$1 Billion

The pool of outstanding loans held by Cambodia’s microfinance institutions grew to more than $1.17 billion in 2013, marking a 44 per cent industry-wide increase from 2012, when the figure stood at $813 million, according to new data from the National Bank of Cambodia.

The industry statistics, which take into account the books of all 38 microfinance providers in the country, were detailed in the bank’s annual report for 2013.

Consumer deposits grew more than 61 per cent to reach $364 million last year, up from $226 million in 2012. Non-performing loans – loans that are either in or close to being in default – remained steady, accounting for less than one per cent.

Bun Mony, president of the Cambodia Microfinance Association, said the results were not surprising, reflecting an average year-on-year growth range of 40 to 50 per cent for the industry.

“Increasing loan size for existing customers and access to microfinance products in rural areas would be some reasons for the year-on-year growth.”

The CMA president added that while customers engaged in agricultural businesses remained the main market for microfinance companies, small shops and street vendors are also emerging as a larger market.

Source: Phnom Penh Post | February 10, 2014 | By: Eddie Morton & Hor Kimsay

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.

Total deposits reached $280 million, a rise of 144 per cent.

Bun Mony, the general manager and chairman of Sathapana Ltd and chairman of CMA, told the Post last week the rapid growth of credit had mainly resulted from an increase in the number of new businesses and economic activity generally.

“We have political stability, which pushes the improvement of the economy; that’s why there was a huge demand for business loans,” Mony said.

“We also enjoy the trust of depositors — that’s why our deposits rose sharply.”

Mony said the value of CMA’s outstanding loans had risen 30 per cent to $122 million and deposits had increased by 72 per cent to $67 million from $38.9 million in 2011.

Sim Senacheert, president and chief executive of PRASAC Microfinance Institution, said its loan portfolio had increased 42 per cent from $151 million to more than $214 million between December, 2011 and December, 2012.

There had also been an increase in personal loans and in the SME sector, he said.

PRASAC’s deposits had increased by 850 per cent, from $5.9 million to $56.7 million, during the 12 months to the end of 2012, Senacheert said.

“We offer our clients competitive terms and rates,” he said. “Our clients can deposit and withdraw at more than 100 offices nation-wide, particularly through our new ATM services.”

Amret Limited general manager Chea Phalarin said the value of loans outstanding had risen 48 per cent to $148 million, and deposits had almost doubled to $83 million.

“Given the improvement in the economy, we still have a lot of room for growth with our loans,” Phalarin said.

Loans had risen sharply during the fourth quarter of last year because of demand from farmers who had held off borrowing money in the third quarter because they were worried about flooding, he said.

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.

The rate of non-performing loans last year was 0.28 per cent, a small rise from 0.2 per cent a year earlier, according to CMA data.

“Although the ratio of non-performing loans increased slightly, it’s not a concern yet,” Sinacheert said.

“It is expected the portfolio will remain sound because clients’ businesses are good and the implementation of the Credit Bureau will prevent over-indebtedness by clients.”

Ngoun Sokha, director-general of the National Bank of Cambodia, said the NBC had taken action against the rapid growth of credit by raising  the reserve requirement last year and opening the Credit Bureau.

Source: Phnom Penh Post (February 4, 2013)