Less than a week since the government demanded that Acleda Bank change its logo to differentiate itself from state-run institutions, Prasac Microfinance has been ordered to do the same.
In a graduation speech delivered at the Phnom Penh International University yesterday, Prime Minister Hun Sen singled out and threatened the country’s largest microfinance institution (MFI) in terms of assets.
“I want to tell Prasac that they need to change their logo immediately,” he said. “[The central bank] will call Prasac to discuss this and we don’t need to take the time to give them a notice to force them to change.”
The premier threatened to withdraw the MFI’s licence if it did not comply.
Prasac is the second institution to be singled out for a logo change after the government launched a campaign aiming to raise public awareness to clarify that loans are indebted to private institutions.
Representatives of Acleda Bank previously told The Post that the bank would have to spend $3.5 million to replace its logo to differentiate from the Ministry of Economy and Finance.
“If people start believing that these institutions belong to the government, then they think they don’t need to pay back their debts, which is very detrimental to the industry,” explained Chea Serey, director-general of the National Bank of Cambodia (NBC)
While she said the NBC would further strengthen its campaign to educate the public about the responsibility of borrowers and lenders and legally binding contracts, she hoped the logo changes would help solve that.
“The logo changes may be confusing at first,” she admitted. “But that has only been compounded by some villains who take advantage of people’s innocence and cheat them into believing that they can get away from their legal obligations.”
Sim Senacheert, general manager of Prasac, said the logo change was a simple manoeuvre and that the redesign was already approved by the board of directors. He added that the MFI was only waiting for the Ministry of Commerce’s approval before changing the signage on 181 branch offices nationwide and replacing 80,000 bank cards and other documents. He estimated that the change would cost the company about $1 million.
“This doesn’t create any increased pressure on us because we were prepared for this in advance,” he said. Besides the $1 million the company has to spend on the logo change, the MFI will have to review its allocated advertising budget.
“Because we have to change our logo, we will need to advertise more to let people know about the new image,” he said.
While Prasac’s logo can be misconstrued as it uses the same Khmer script as the NBC and resembles the symbol for the national currency, questions linger over whether Sathapana Bank Plc, which uses an image of a lion as its logo and is similar to the National Police and General Department of Taxation (GDT), would be the next in line.
Lim Aun, acting CEO of Sathapana, said yesterday that the bank had yet to receive any order from the NBC to change its logo.Ngeth Chou, a senior consultant for Emerging Markets Consulting (EMC), said he did not believe the government’s claims over logo confusion, adding that rural Cambodians had little knowledge about the signage used by state-run institutions.
He said the government’s claims should be investigated to see if they represented the reality of the situation.
Nevertheless, these drastic steps demanded by the government could hurt the confidence of new and existing shareholders and investors, he said.
“If the government requires these changes, they should give companies a proper six months to one-year timeframe so that they can learn from customers about a new logo for it have quality and be effective,” he said.