Cambodia's largest bank is ready to launch its first micro-finance institution (MFI) in Myanmar, but one final barrier remains: an operating licence from Myanmar’s government.

Acleda Bank’s chief executive, In Channy, expects the licence to be granted by the end of this month.

Once that is done, Acleda MFI Myanmar, located in Yangon, will begin disbursing loans to individuals and groups by early February.

Channy expects Acleda to open five additional branches – two more in Yangon and three in Bago – by the end of 2013.

Meanwhile, its staff in Myanmar is already collecting details of potential customers, as well as conducting market research before the first branch begins operating.

About 30 people had already called to inquire about loans, Acleda MFI Myanmar managing director Kim Bunsocheat said.

Twenty-five employees returned to Myanmar on January 5 after a six-week training program in Cambodia, Channy said.

Meanwhile, Acleda is training a second group of eleven employees who will return next month to Myanmar, which recently removed restrictions on wholly foreign-owned direct investments.

Acleda MFI Myanmar has an initial paid-up capital of $10 million. Channy expects business to be brisk and to become profitable in about three years.

“The loan-to-GDP ratio in Myanmar is five per cent. There is a high demand for loans in Myanmar but low supply,” he said.

The rules and regulations in Myanmar remained “a major challenge” to doing business there, Channy admitted.

“If there are any difficulties, we will work with the regulators to improve the situation,” he said.

Meanwhile, Cambodia remains the focus for the parent company, he said.

Cambodia currently has a loan-to-GDP ratio of about 37 per cent, and Channy aims to make it 100 per cent in the long run by working with other financial institutions and with the government.

Acleda is also upgrading its core banking system for its operations in Cambodia.

The latest version of its current system, built by Temenos, is expected to go live by the first quarter of this year.

Switzerland-based Temenos provides banking software systems to customers in more than 125 countries, and Acleda’s system upgrade will increase the efficiency of its services.

For example, money transfers from Cambodia to the US now take as long as two days, but with the upgrade, funds would be received the same day, Channy said.

The upgraded T24 R12 system would also lower the cost of providing basic banking services, Temenos Chief Executive David Arnott said.

To contact the reporter on this story: Low Wei Xiang at [email protected]