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MFIs defy typically slow first quarter

MFIs defy typically slow first quarter

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Nguy Ratha, who was the recipient of a microloan, tends to his pigs at his farm near Poipet, in Banteay Meanchey province. The MFI industry grew to US$708 million in loans outstanding in the first quarter. Photograph: Will Baxter/Phnom Penh Post

Total loans and deposits at the Kingdom’s microfinance institutions jumped in the first quarter of 2012 despite what is typically a slow season for the industry, insiders said yesterday.

Loans outstanding reached US$708 million for the period ending on March 31, climbing 9.8 per cent from the last quarter of 2011, according to the Cambodia Microfinance Association (CMA).

At the same time, deposits jumped to $141.4 million, up 23.4 per cent quarter on quarter.

The sector-wide nonperforming loan rate fell to 0.1 per cent from 0.4 per cent.

“Our economy is growing as we see all the sectors are improving. People need more money to do and to expand their businesses,” Amret CEO and president Chea Phallarin said.

While noting some effect from the debt crises in Europe, Chea Phallarin said outstanding loans and total deposits at Amret jumped 15 per cent and 19 per cent, respectively, between the fourth quarter of 2011 and the first quarter of this year.

Nonperforming loans, meanwhile, dipped to 0.5 per cent from 0.7 per cent.

Hout Ieng Tong, general manager at Hattha Kaksekar Microfinance, pointed to a similarly strong performance.

“Our loans and deposits reached our growth targets. With this trend, we hope to grow around 30 per cent by the end of the year as our economy keeps growing,” he said.

The increases came despite what is widely recognised as a slower period for the industry, as many crops are harvested in the year’s first quarter.

“The portfolio growth during the first quarter is usually slow, and the number of borrowers drops because it’s the peak repayment period for agriculture loans,” PRASAC Microfinance CEO and president Sim Senacheert said, adding also that fewer loans are issued during the period.

“But it is still increasing,” he said.

PRASAC’s loan portfolio in the first quarter increased 3.5 per cent year-on-year, according to Sim Senacheert, and 33.5 per cent from the fourth quarter.

However, the number of borrowers slipped 6 per cent from the fourth quarter while rising 4.7 per cent year-on-year.

He put PRASAC’s total deposits at $8.8 million, a gain of 46 per cent from the previous quarter and 3,000 per cent year-on-year.

“It was siginificant growth because we launched deposit products last April, and the product’s conditions are good for depositors,” he said.

Sim Senacheert predicted the MFI industry would see faster growth from the end of the second quarter, rising as much as 30 per cent to 40 per cent for the year.

To contact the reporter on this story: May Kunmakara at [email protected]

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