Logo of Phnom Penh Post newspaper Phnom Penh Post - Microfinance lenders see the amount of borrowers decrease in Q3

Microfinance lenders see the amount of borrowers decrease in Q3

A woman conducts business at Prasac Microfinance Institution, the country’s largest MFI, in Phnom Penh.
A woman conducts business at Prasac Microfinance Institution, the country’s largest MFI, in Phnom Penh. Pha Lina

Microfinance lenders see the amount of borrowers decrease in Q3

The number of borrowers from microfinance institutions (MFIs) decreased by 5 percent during the third quarter of this year compared to the same period last year, a trend that industry insiders claim is due to operators attempting to strengthen the quality of their loans and to the impact of the 18 percent interest rate cap.

According to data from Cambodia Microfinance Association (CMA), the number of borrowers from 66 local MFIs reached a total of 1.84 million clients by the end of September this year, down from 1.94 million clients compared to the same period in 2016.

CMA data showed that portfolio at risk (PAR), the indicator for non-performing loans, amounted to $76 million by the end of September, equal to 1.9 percent of the sector's total outstanding loan portfolio. By the end of September last year, PAR was valued at $39 million, or 1.38 percent, of the total outstanding loan portfolio.

Sok Voeun, CEO of LOLC (Cambodia), said that the decrease of borrowers could be caused by three main factors including a lower demand of loans from clients, operators strengthening loan quality and reducing the amount of small loans disbursed to activate the 18 percent interest rate cap.

Updates to follow.

MOST VIEWED

  • ‘Support of CNRP return online will lead to arrest’

    Anyone posting messages supporting the return of Sam Rainsy, the “acting president” of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), on social media will be arrested, the Ministry of Interior announced on Tuesday. Ministry spokesman Khieu Sopheak told The Post on Monday that authorities

  • CNRP activists arrested for ‘plotting insecurity’

    Three activists for the Supreme Court-dissolved Cambodia National Rescue Party (CNRP) have been sent to Phnom Penh Municipal Court after they were arrested for their alleged involvement in an overseas-organised plot to mobilise demonstrations and cause insecurity. National Police spokesman Chhay Kim Khoeun said the

  • Rainsy charged with ‘insulting the King’

    Ministries and state institutions have condemned Sam Rainsy, the “acting president” of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), for allegedly insulting His Majesty King Norodom Sihamoni. The condemnation came in the wake of Rainsy’s claim on Thursday during an interview with Radio

  • Negotiations to continue for next year’s minimum wage

    Negotiations for next year’s minimum wage will continue this week as the parties work to reach an agreement that will impact about 800,000 workers in the textile, garment and footwear industries, the Ministry of Labour and Vocational Training said on Thursday. Representatives for workers have