Khmer Capital Microfinance Plc became the most recent microfinance institution (MFI) to become operational in Cambodia’s crowded market yesterday, when it celebrated its official opening after obtaining its licence from the central bank in July.
Kim Heang, co-founder of Khmer Capital Microfinance, said yesterday that his new MFI will provide a range of credit options to Cambodians, including loans for small- and medium-size enterprises (SMEs) as well as personal consumer loans for the purchase of vehicles, smart phones and home improvements.
“This institution has been created to provide financial services in the market as well [to serve] Cambodian people, especially the lower-middle class,” he said.
Heang is also the president of the Cambodian Valuers and Estate Agents Association (CVEA).
According to data released by the National Bank of Cambodia (NBC), by the end of June this year, Cambodia had 66 MFIs and seven microfinance deposit-taking institutions (MDIs).
Yun Sovanna, General Secretary of Cambodia Microfinance Association (CMA), said yesterday that while Khmer Capital is joining a crowed financial market, increased competition is a positive thing.
“More competition is good for consumers, as operators will need to create more products and provide more services to satisfy their clients,” he said. “Operators will have to invest more in new technologies to strengthen the quality of their services.”
While the central bank’s decision in April to cap annual interest rates at 18 percent had many concerned about future negative impacts on MFIs, Sovanna said newcomers to the sector like Khmer Capital would have time to adjust operational strategies and strengthen policies to avoid risk.