Logo of Phnom Penh Post newspaper Phnom Penh Post - Sathapana Bank gets $35 million from Taiwan lenders

Sathapana Bank gets $35 million from Taiwan lenders

Sathapana Bank Plc CEO Bun Mony speaks at an event last year.
Sathapana Bank Plc CEO Bun Mony speaks at an event last year. Vireak Mai

Sathapana Bank gets $35 million from Taiwan lenders

Facilitated by Taiwan’s First Commercial Bank, seven foreign banks provided $35 million in a syndicated loan to Sathapana Bank Plc, a newly formed Cambodian commercial bank, to expand its existing microfinance operations and broaden its commercial lending portfolio.

Signed in Taipei last Wednesday, the loan brings together a host of Taiwanese lenders that previously had not financed banks in the Kingdom, signalling a shift that Asian lenders have become more confident in providing lines of credit to institutions that previously operated as microfinance institutions (MFIs), according to Sathapana’s CEO.

“The Taiwanese have confidence in Sathapana Bank Plc, and this loan will support the bank to expand its commercial operations to more clients and also fulfill its mission as a MFI,” said Bun Mony.

He added that while MFIs previously relied primarily on Western lenders to expand its operations, the Taiwanese banks loan paves the way for more Asian banks to build up Sathapana’s capital.

“First Commercial Bank has previously issued smaller loans, around $5 million, but this is the first time for such a large syndicated loan size to be given to a commercial bank,” he said.

Hout Ieng Tong, president of the Cambodian Microfinance Association and CEO of Hattha Kaksekar Limited, said the loan would allow Sathapana to expand its MFI operations.

“It is good that a former microfinance institution can get this loan,” he said. “With access to a syndicated loan they have enough capital to reach more customers.”

Stephen Higgins, managing partner of investment firm Mekong Strategic Partners, said that for First Commercial Bank, it is a positive sign that it could rally support from Taiwan.

“Being able to get a syndicated loan for a Cambodian MFI is a big deal, and it surprises me that more banks haven’t tried to do it. So far, we’ve really just seen the like of the IFC doing it,” he said, referring to the International Finance Cooperation, a member of World Bank Group.

Higgins added that while international lenders are increasingly reaching their country limits for MFI support, Cambodian institutions have had to diversify their funding.

“From the MFI perspective, a syndicated loan will be used to fund their loan growth just like any other type of loan, and the main benefit is being able to deal with just the lead arranger of the syndicate, rather than multiple banks,” he said.

When Maruhan Japan Bank Plc and Sathapana Ltd finalised their long-awaited merger to form a commercial bank in April, Sathapana Bank Plc had a registered paid-up capital of $120 million and total assets of $722 million. The total loan portfolio amounts to $533 million, while total deposits are $367 million.

MOST VIEWED

  • PM imposes nationwide Covid restrictions, curfew over Delta scare

    Prime Minister Hun Sen late on July 28 instructed the municipal and provincial authorities nationwide to strictly enforce Covid-19 measures including curfew for two weeks from July 29 midnight through August 12 to stem the new coronavirus Delta variant. The instruction came shortly after he issued a directive

  • Two luxury hotels latest quarantine options for inbound travellers

    The Inter-Ministerial Committee to Combat Covid-19 has designated two luxury hotels as alternative quarantine options for travellers who wish to enter Cambodia through Phnom Penh International Airport – Sokha Phnom Penh Hotel & Residence and the Courtyard by Marriott Phnom Penh. In a notice detailing guidelines issued

  • Visa A holders get to quarantine at Himawari Hotel

    The Ministry of Health has permitted foreign diplomats, UN and International NGO officials to undergo quarantine at Himawari Hotel in the capital in case they do not have a separate place suitable for this purpose, but the government would not be responsible for the expenses.

  • Provinces on Thai borders put in lockdown amid Delta fears

    The government has decided to place several border provinces in lockdown for two weeks in a bid to prevent the new coronavirus Delta variant spreading further into community. According a directive signed by Prime Minister Hun Sen late on July 28, the provinces include Koh Kong,

  • Jabs for kids bring hope for school reopenings

    Cambodia is tentatively planning to reopen schools – at least at the secondary level – when the vaccination of children aged 12-17 is completed, even though daily transmissions and deaths in other age groups remain high. Schools across the country have been suspended since March 20, one month

  • China denies Mekong hacking

    As the US and its allies joined hands last week to expose what they allege to be China’s Ministry of State Security’s malicious cyber activities around the world, the attention also turned to Cambodia with the US Department of Justice claiming that four