Prince Microfinance Plc held its official opening yesterday, becoming the 49th registered microlender to operate in Cambodia’s rapidly expanding microfinance market.
Hon Sorachana, CEO of Prince Microfinance Plc, said the new financial institution will focus on providing a range of credit options to Cambodians and foreigners, including home loans and debt refinancing.
The lending period ranges from one year to 20 years, with “favourable” interest rates.
Backed by local investors, the microfinance institution (MFI) has already provided nearly $3 million in loans to its clients since receiving a lending licence from the National Bank of Cambodia (NBC) in August, according to Sorachana.
“Generally, [our clients] borrow more than 40 million riel [$10,000] because their businesses are not too small, mostly mid-sized enterprises,” he added.
Yesterday’s launch ceremony was held at Prince’s head office on Mao Tse Tung Boulevard. The MFI plans to open two more branches in the capital early next year.
The new microlender has entered one of Cambodia’s fastest-growing market segments.
According to Kim Vada, director-general of the NBC’s banking supervision department, total lending by licensed MFIs increased 55 per cent year-on-year during the first nine months of 2015. The lenders distributed more than 11 billion riel ($2.75 million) to nearly 2 million clients during this period.
The International Monetary Fund (IMF) warned this week that Cambodia’s credit growth, which has surged about 30 per cent annually for each of the last three years, could pose a significant risk to the country’s economy and financial stability. The IMF urged Cambodia to implement measures including raising the reserve requirements for microfinance institutions.
However, Bun Mony, chairman of the Cambodia Microfinance Association, welcomed the addition of Prince to the Kingdom’s increasingly crowded MFI sector, saying competition was good for everyone.
“We wish to have more MFIs so that there is more competition,” Mony said, “Both newcomers and the existing MFIs must try to improve the quality of their services in order to gain support from the market, and to attract clients for profits and their own survival.”