US-BASED Overseas Private Investment Corporation (OPIC) yesterday signed a deal to provide a $5 million long-term loan to Thaneakea Phum (Cambodia) Ltd (TPC), a local microfinance institution (MFI), to support TPC’s expansion of its home improvement loans for low-income Cambodians.
Fernanda Lima, director of US-based socially responsible investment management company Developing World Markets (DWM) and chair of the TPC board of directors, said this investment will increase financial access for the under-served, low-income segment of the population, while directly improving the livelihoods of rural Cambodians. She said the seven-year-term of the OPIC loan would allow TPC to create home improvement products with a longer timeframe than standard working capital loans.
“Our partnership with OPIC is a perfect fit, as our organisations have the same goal of leveraging the private sector towards a more prosperous Cambodia.”
OPIC president and CEO Elizabeth Littlefield said through this microfinancing project, thousands of Cambodians in rural areas would be able to take advantage of business opportunities they might otherwise not have had the chance to.
She said “access to financing is vital in fostering Cambodia’s economic development”.
According to a press release, OPIC provides capital to microfinance institutions through investments in microfinance vehicles, targeted credit facilities to individual MFIs, risk-sharing agreements and guarantees supporting innovative industry efforts.
OPIC has committed over $700 million to microfinance projects, which have supported 125 MFIs in 35 countries.
As of the end of December, TPC has served 122,077 clients via its 39 branch offices in 17 provinces in Cambodia since its establishment in 1994.
The release stated that since the beginning of 2012 TPC has seen its gross-loan portfolio grow by 46 per cent to $48.4 million.