Logo of Phnom Penh Post newspaper Phnom Penh Post - MFIs still seeing significant growth

MFIs still seeing significant growth

MFIs still seeing significant growth

Outstanding loans and deposits in 28 of Cambodia’s microfinance institutions rose between 30 and 40 per cent year-on-year in 2011, official data from the Cambodian Microfinance Association indicated.

The CMA’s data showed outstanding loans rose 41.5 per cent from US$916.3 million with 1.3 million borrowers in 2011, compared to $647.8 million with 1.22 million borrowers a year earlier.

Deposits grew by 32 per cent to $1.26 billion with 1.1 million depositors, compared to $952.2 million with 36,776 borrowers in 2010. MFIs in the Kingdom first began to take deposits in early 2010.

Non-performing loans (NPL) declined from 1.3 per cent of the loan total to 0.4 per cent. Officials and insiders said a strong macro-economy performance and clear regulations were responsible for the shift.

National Bank of Cambodia director general and spokeswoman Ngoun Sokha recognised the favourable direction the economy was heading, especially in the agricultural sector, which she believed was responsible for the rising demand for loans.

“The government supports the agricultural sector, especially the export of milled rice. So we promoted the adoption of MFI loans for agriculture and actually received a lot of growth in that area, adding up to more than 50 per cent of all loans,” she said.

Bun Mony, director of CMA and chairman of Sathapana Microfinance, told the Post that loan portfolios at Sathapana rose about 65 per cent to $94.6 million compared to $57 million in 2010. The number of borrowers grew from from 43,565 to 55,001.

“There was a high demand for loans as business activities continue to grow, and we don’t even seem to have any problems with repayment,” he said, adding that the NPL rate declined to from 0.93 per cent to 0.22 last year.

Sathapana provides loans to all sectors, with 40 per cent going to retail and small businesses, and more than 20 per cent to the agricultural sector.

The country’s biggest MFI, Prassac Microfinance, reported that by December 2011 its gross loan portfolio was $151 million, an increase of 43.6 per cent, with active borrowers increasing 10.9 per cent to 125,127.

“In general, I think that the industry performed well last year because all MFIs grew their portfolios while the NPL rate decreased,” Sim Senacheert, president and CEO of Prassac, said.

Prassac loans to the agricultural sector accounted for 33 per cent of its total portfolio, with trading and service making up 47 per cent.

Hout Ieng Tong, general director of Hattha Kaksekar Microfinance, reported that loan portfolios rose 70 per cent to $75 million with 62,703 borrowers, from $44 million with 47,952 borrowers the year pior.

He added that NPL declined from 0.9 to 0.07 per cent, and that agricultural loans accounted for 35 per cent of total stocks at his compay. Sathapana Microfinance’s total deposits rose 129.4 per cent from $39 million to $17 million, while Hattha Kaksekar’s total deposits grew more than 160 percent to reach $15.78 million compared with only $5 million the year before. Prassac reported smaller increases, as its operations just began in mid-2011.

The successes are tempered, however, by the uncertain economical fates of the EU and US, where much of the industry gets its primary funding. “We are a bit worried,” said Bun Mony.

“We see the EU in a crisis, and think there could be some slight impact on us, specifically regarding investments.”

Ngoun Sokha suggested a solution, saying, “We try to teach MFIs good governance, and to strengthen their internal capacity for infrastructure, so that they will be able to easily seek a source of funds domestically rather than just looking abroad.”

MOST VIEWED

  • Prince injured, wife dies after accident

    THE wife of former First Prime Minister Prince Norodom Ranariddh, Ouk Phalla, 39, died while the prince was “severely” injured following a road accident in Preah Sihanouk province’s Prey Nub district on Sunday morning, officials said. Rananriddh, who is also the president of the Funcinpec

  • Guards protest dismissals, reject claims of sharing naked photos of child

    Some 20 former security guards at the US Embassy in Phnom Penh protested on Tuesday against their dismissal. They accused their employers of falsely claiming they had viewed and shared child pornography from their mobile phones as grounds for their termination. In total, 32 personnel were dismissed

  • Bun Heang mocks US, threatens its citizens in scathing open letter

    After being hit with sanctions from the US Department of Treasury, Cambodian General Hing Bun Heang said he would retaliate against any US national who does not respect his country’s sovereignty, has ambitions to invade Cambodia or incites “traitors” in the Kingdom to do

  • Funcinpec urges probe into deadly Preah Sihanouk accident

    THE Funcinpec party has urged the government, especially the Ministry of Interior, to investigate the traffic accident in Preah Sihanouk province which left Prince Norodom Ranariddh badly injured and his wife Ouk Phalla dead. Funcinpec Vice President You Hokry told reporters at Botum Votey pagoda,