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Microfinance institution Sathapana increases maximum loan limit

Microfinance institution Sathapana increases maximum loan limit

Microfinance institution Sathapana has increased its maximum loan size to US$200,000, a 300 per cent increase from the previous level of $50,000.

The upgrade in loan size is a result of Cambodia’s good economic climate and the expectation that there will be demand among customers for bigger loans as they begin to expand their businesses, the company said.

Bun Mony, CEO of Sathapana, told the Post that the Sathapana committee approved the upgrade of the maximum loan value despite a lack of requests from customers for higher amounts.

The new maximum will be effective from this month.

“Our marketing research has found that customers need capital of more that $50,000,” said Bun Mony.

“However, I expect that we haven’t yet had customers who need loans of $200,000 but next year our customers will need loans of more than $100,000,” he added.  

Both the size of the loan and the interest rate are variable. Bun Mony gave an example of a $50,000 loan Sathapana gave previously with a rate of 1.5 per cent per month or 18 per cent per year interest rate for a period of 36 months.

Comparitavely, Bun Mony said a $200,000 loan would have an interest rate of 1.2 per cent per month or a 14 to 15 per cent annual rate over 48 months.

According to Bun Mony, the average loan 10 years ago was $50 and now the average loan is $1,700. Sathapana had loaned more than $114 million to more than 67,000 customers by the end of October: deposits for 2012 so far have totalled nearly $60 million from more than 45,000 customers.

Chea Phalarin, board member and CEO of Amret micro-finance institution, said his institution decided to not offer larger loans because the demand from customers is still low. Amret’s loan limit is $30,000 with an average loan of $600.

Nguon Soka, director general of the National Bank of Cambodia (NBC), said there are seven microfinance institutions which are authorised by the NBC to receive deposits from among the 30 microfinance institutions operating in Cambodia.

She noted that institutions offer products based on their customer’s needs and the goal of the financial institution itself, “There are a variety of goals; customers use different loans with different goals,” she said.

To contact the reporter on this story: Rann Reuy at [email protected]

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