Some 120,000 Amret Microfinance Institution group loan borrowers affected financially by the Covid-19 crisis recently received a three to six-month grace period on loan restructures, it said in an announcement on Sunday.
The move makes it the first microfinance institution (MFI) to publicly announce financial relief for its customers.
Group loan customers are predominantly rural-based, smallholding farmers who often depend on the income of family members’ working in garment factories, which have seen widespread closures because of the pandemic, said Amret.
Noting that group loan customers are among the most vulnerable to economic hardships during the pandemic, it said it will offer to immediately defer their interest and principal repayments for three months upon request.
Its CEO Dos Dinn said its sound financial standing allowed it to make this offer to its customers as an essential part of its business mission.
Despite the challenges posed by Covid-19 to many of Amret’s customers, many other customers are still operating their businesses successfully, he said.
“Amret hopes that the implementation of this grace period will support our clients and their families during this difficult economic situation brought on by the Covid-19 global crisis,” said Dinn.
The announcement comes just two days after Cambodia Microfinance Association (CMA) issued a joint statement saying that its members will try their best to support customers facing difficulties during the pandemic.
The statement adhered to guidelines set by the National Bank of Cambodia (NBC) on March 27 calling for all banks and financial institutions to assist with credit restructuring for loans in four priority sectors – tourism, garments, construction, and transport and logistics.
Dinn said Amret will offer individual clients solutions based on case-by-case assessments, including partial or full deferred payments from three to six months, to ease their financial burdens.
Amret will pay particular attention to individual borrowers in the business sectors identified by the NBC as most vulnerable to the pandemic, as well as the agricultural sector he said.
“We value their [customers’] support and we thank them for their continued commitment to fulfil their financial obligations, which in turn will help support Amret’s efforts to provide financial assistance to those most impacted during this pandemic,” said Dinn.
Amret serves more than 500,000 clients ranging from low-income farmers to small and medium-sized enterprises for both lending and deposit products.
The institution has assets of over $1 billion and deposits exceeding $500 million.