Chinese-sponsored Asian Infrastructure and Investment Bank’s (AIIB) $100 million loan to locally public-listed ACLEDA Bank Plc will fund the latter’s domestic expansion and increase investor confidence in the Phnom Penh-based lender, according to the head of the Cambodia Securities Exchange (CSX).
The loan will have a five-year term, with a variable interest rate from 8.8-11 per cent – presumably per-annum – and anticipated first disbursement date in December.
“This facility will provide new loans to micro, small and medium enterprises [MSME]. The long term facility is to support strategic growth and diversification of funding sources in line with the bank’s plan,” ACLEDA said in a filing to the CSX.
CSX CEO Hong Sok Hour commented to The Post on July 5 that the expansion strategy of any company should comprise a variety of funding sources to support their growth, including the capital market. However, appropriate debt management is necessary to minimise risks, he stressed.
“Listing on the CSX gives them [companies] much credibility, allowing them to easily obtain loans or credit, particularly from foreign lenders who might offer them low interest rates. The debt will help firms to growth more as they become better positioned to expand their business.
“Companies must, however, make sure that their debt loads are manageable and won’t expose them to excessive risk – businesses can achieve their growth objectives by using debt effectively,” he cautioned.
“As investors from the general public pay them more attention, listed companies will enjoy very good reputations,” Sok Hour said.
ACLEDA has four subsidiaries, namely the ACLEDA Institute of Business, ACLEDA Securities Plc, ACLEDA Bank Lao Ltd, and ACLEDA MFI Myanmar Co Ltd as well as representative offices in Myanmar.
As of end-March, ACLEDA had $9.44 billion in total assets, $6.58 billion in total credit balances, and $6.79 billion in total savings deposits with over 4.07 million customers.
For comparison, all four figures marked quarter-on-quarter increases from the numbers that the local lender posted for end-2022: $8.92 billion in total assets, $6.25 billion in total credit balances, $6.22 billion in total savings deposits, and 3.98 million customers.
As of end-April, ACLEDA Mobile had 2.76 million subscribers and 240,000 merchants, according to the bank.